If you haven’t bought a home in a while, you may notice a few changes in
the way some real estate agents do business these days.
Oh, sure, they’ll still show you all the properties you want to see and
some you didn’t know you wanted to see. Your agent will write up your offer
and go to the closing and probably pop for a congratulatory pothos or a bottle
of chardonnay. But if you get the feeling that this time your agent is really
on your side of the bargaining table, well, it’s true: If the agent is a
“buyer’s agent.”
It’s a reversal of the old arrangement. Before the “Brokerage Relationships
in Real Estate Transactions Law” went into effect Jan. 1, 1995, real estate
agents were working for the sellers. That’s where their loyalties were. If you
made a bad deal, they legally could not stop you or even advise against it
without jeopardizing their licenses.
Under the new law, buyers’ agents are bound to represent the best interests
of the party they are working with. Buyers, who were not previously
represented, can now expect from their agents a variety of services that
enhance their purchasing power:
- Your agent will arm you with a wealth of market information and
scuttlebutt. Under the old rules of subagency, agents could give you sales
figures for similar homes in the area you were considering only if you asked.
Personal information about the seller, which might influence your decision or
offering price, was withheld. Not anymore.
“I’m now going to sit down with you as my client and tell you everything
that sold in the neighborhood and tell you everything I know about the seller
that we may or may not use to negotiate an offer,” says Carole O’Neill of
Prudential Burnet Realty in Arlington Heights. “I can say, `Guess what? If you
pay $350,000 for this house, you’ll be the highest price in the neighborhood.’
I was stopped from doing that before.”
“If the seller mentions, `I’m being transferred, and I need a contract next
week,’ that information improves my buyer’s bargaining position and I have a
responsibility to tell him,” says Bill Alston, president of ERA Callero &Catino Realty in Niles. “As a subagent, I had a responsibility not to tell the
buyer.”
- Your agent will interpret market information. It’s one thing to have a
set of comparables in front of you. It’s another to use those numbers and
abbreviations to make an intelligent offer. Buyers are no longer on their
own.
“We could give comps but we couldn’t comment,” says Cam Benson, co-owner of
Wildwood Caravan Realty in Chicago. “Or we could say, `According to public
records, these houses sold.’ Now we can say, `This house sold for this price
but I showed it a number of times and it was on the market four months, and it
needed all kinds of work.”
Undeciphered comps are meaningless, says Pam Cirignani of Beliard, Gordon &Partners in Chicago. “Let’s say you’re looking at a building where there were
10 sales of the same type unit. The buyer may not know that one unit faces
north and another faces south. That can make a $10,000 difference in price.”
- Your agent can help you determine your offer. In the past, he or she left
it up to you. If pressed, they hedged. “Instead of asking, `What do you want
to offer?’ we can say, `The last unit sold for XYZ. Let’s come in at A,'”
says Cirignani. “You can also offer insight into the listing agent’s modus
operandi. Does she price close to her selling prices? How easy is she to deal
with or do you have to play the game? You can use all the cards available to
you.”
- Your agent will keep personal information confidential. Maybe you’re in a
crunch to buy. Maybe your ailing mother lives nearby. Maybe you’re rich and
don’t want to be gouged on the selling price. Your agent won’t tell.
- Your agent will negotiate to get you the lowest possible price. Maybe you
think that’s the way it always was, but it wasn’t.
“If the buyer paid $10,000 too much, nobody told the buyer,” says O’Neill.
“Buyers didn’t realize there was such a thing as comparables and that they
could look at them.”
Agents today can do more strategizing to get a better price, says Benson.
“If they are the only offer, we can say, `You can start a little lower,’ ” she
says. “Or if it’s a hot property or there are multiple offers we can tell
buyers they might want to change their price.”
- You may be asked for an exclusive buyer representation agreement. Sellers
have long signed agreements with listing agents to market their properties.
The same is a growing custom between buyers and their agents. Usually in
effect for a specific time period, the agreement not only protects agents from
window shoppers but also commits them to vigorously pursuing their clients’
housing needs.
“In the past, a lot of agents tried to work with every buyer,” says Alston.
“An agent might meet 15 buyers at an open house and try to work with every
one. They ended up giving mediocre service to all of them. Now the agent knows
if I concentrate my efforts on this client, they will buy from me.”
