Why is it important to use a Professional Buyer’s Agent for the purchase of Real Estate?
Purchasing a home is probably the most expensive expenditure you will make in your lifetime. For this reason, you need to have as much information as possible regarding that purchase, as much knowledge about that home and the best representation you can get for yourself, your rights and your investment. First let’s consider the most important reason for a Buyer’s Agent to represent you, The Realtor who has listed the house for sale, that you are considering, already has a boss. He has a signed contractual agreement and fiduciary duty to protect the Seller’s rights, privacy and causes and a duty to get the highest price possible for the sale of his client’s property.
There are a great many questions you may have that he is not legally allowed to answer. If he has knowledge of his clients finances, an illness, family strife or any other reason as to why this property is for sale, he cannot disclose that to you as it would be a betrayal of the trust his client has contractually obligated him to. He may very well know what his client’s “bottom line” is as far as a sales price, but again, he cannot disclose that to you.
What is Dual Agency?
Dual Agency is when the Agent, or their Brokerage, represents both sides in a sale. In some jurisdictions this is no longer allowed, but here in Mexico it is, as long as it is disclosed in writing to both sides. Again, you fall victim to the same issues as described above, the Agent has a contractual obligation to the Seller and not to you. As hard as this is for a Realtor to tell you, the last person you want to call is the Realtor whose name is on the sign in front of the house you want to see. You should always have your own representation in order to protect your rights and to negotiate on your behalf.
What does a Buyer’s Agent do for you?
A buyer’s agent is someone who represents a buyer’s interests when buying a home. A buyer is considered a “client” of the real estate agent, not a customer. They become a fiduciary to the buyer in all aspects of the transaction. In a buyer’s agency relationship, the agent provides the client with undivided loyalty, reasonable care, obedience to lawful instruction, disclosure, confidentiality, and accountability. A real estate agent is required to put the buyer’s interest first and attempt to negotiate the best possible terms for their client.
You may be quite familiar with buying homes, or you may be brand new to the process. But even if you have done this seven different times, you are still going to benefit from having a professional guide you through the contract process, especially if this is your first time buying in Mexico, where everything is a little bit different.
The agent can also write a proper contract on your behalf, which will make you look like a desirable buyer to sellers and their agents.
Real estate contracts can be confusing and difficult to understand, which is why having a representative looking out for your best interests—who is not going to be baffled or overwhelmed with the contract process—is ideal. Your agent will know about the various possible contingencies that can show up in a real estate contract—both those the seller might try to include and those you might want to have based on your circumstances. There are a variety of professionals that may be needed to complete your transaction. Instead of having to spend your time tracking these people down—like Home Inspectors, Real Estate Attorneys and/or Closing Coordinators, and of course the Notaries—you can leave the task to your agent.
He or she should have a list of trusted professionals known to be excellent to work with and can connect you with them immediately.
You only have so much time to spend looking at homes. Coordinating showings with sellers and their agents can be a juggling act, one that may become frustrating when inventory is tight and homes are selling fast. A professional Buyer’s Agent will be flexible with getting showings coordinated. They will work around your busy schedule as best they can. Your agent will figure out how to get you to the showings you want most when you want them. There are times this will be difficult, like when the seller insists the listing agent attend, such is the case here in Mexico, where we do not use “lock-boxes”. A significant role of a Buyer’s Agent is to perform due diligence on the house you’re interested in. They are there to protect you. A real Buyer’s Agent’s role isn’t to be a glorified taxi cab driver. If this is the kind of agent you are working with, FIRE them!
One very important thing that very much needs to be pointed out, is that all of our professional AMPI Realtors have access to the very same database of homes though our MLS system. Hopping from one Realtor to another will, for the most part, not get you anything different to look at and you are, for the most part, wasting a great deal of your time. Yes, there are such things as “Pocket Listings”, properties which a Seller does want to sell but does not want to list with any Realtor for whatever reason. Sometimes this can be a “Red Flag” and something to take care with. Again, a Buyer’s Agent will know where and how to look in order to make sure all of the proper documentation is in order. A good Agent will also know where to look for other properties that are sold outside of our MLS system and/or on other platforms.
Local Knowledge
Are you familiar with Puerto Vallarta and all of the local neighbourhoods? Do you know where all of the closest amenities are and how to get to them? What if you found the home of your dreams, but after you move in, discover that it is the neighbourhood of your nightmares. Again, your Buyer’s Agent will have local area knowledge to help you to navigate away from bad areas and into a neighbourhood that better suits your own wants and needs.
The real estate market is in constant flux. Unless you are a professional real estate agent, it isn’t easy to be fully aware of everything going on in your local market. That is why you hire a buyer’s agent—because he or she will have the market knowledge you need to get the best results from your purchase.
Negotiations
The agent can advise you on what kind of offer is likely to get you the home you want. Your agent can give you an informed opinion on where they see the local real estate marketed headed. Are prices rising or dropping? Are the inventory levels for homes going up or down?
Are you likely to be involved in a multiple offer situation or a bidding war because there are so few homes on the market? If that’s the case, how can you put yourself in the best position to win? An AMPI Realtor has access to the most current sales statistics and market trends. By performing a computerized CMA on a property you are interested, he will be able to know within a couple of percentage points exactly what that property should close at, and by using this knowledge, should be able to get the home for you and the correct current market value.
In most jurisdictions, homeowners will fill out what’s known as a seller’s disclosure statement. In this document, the seller will tell buyers what they know and don’t know about the property.
An outstanding Buyer’s Agent will review this form with you. They will advise on anything that may need further clarification or possibly investigation. For example, some Sellers are notorious for not getting required building permits for remodeling work they have done in their homes. This is a big no-no that could cause problems for a buyer once it’s time for them to sell. A Buyer’s agent will research at the local Municipal building department when there are suspicions that permits have not been properly pulled and any additions have not been properly manifested.
What will a Buyer’s Agent cost you?
In most cases, hiring a Buyer’s agent won’t cost you anything. No, Buyer’s agents don’t work for free. But they also don’t get paid by the Buyer. They get paid by the Seller, based upon the Listing Agreement between the Seller and his Agent. Typically, the Buyer’s agent and the Seller’s agent will split the commission on a home sale.
As previously mentioned, the only situation where you might be expected to pay the Buyer’s Agent is if the property is FSBO—For Sale by Owner—and the owner refuses to pay the fee for the agent.
You can generally avoid such situations, though, just by verifying that any FSBO home you look at is being sold by an owner who has agreed to pay the Buyer’s Agent.
Your agent should explain how commissions work in instances like this one. Keep in mind there might be a great for sale by the owner out there that fits your needs perfectly. Part of your buyer agent’s job is to find one of these properties for you, should they become available.
If a for sale by owner won’t pay a commission, you can always deduct that amount from what you offer the seller or pay your agent. This is one of the many reasons why for sale by owners rarely save money.
The fact you won’t be paying any money out of your own pocket should be a significant reason for having a buyer’s agent.
In the end, you have every reason to hire a buyer’s agent and no reason not to. Take the time to interview a few agents and take your pick. You will be happy you did.