FAQ's regarding Buyers Agents

Q. How do Buyers Agents get paid?

Having a Buyer's Agent represent the Buyer does not generally add any cost to the transaction.  The Buyer's Agent and the Seller's Agent divide up the work and split the fee which is already included in the sales price.  This way, both agents are properly compensated, and their respective clients each receive fair representation, without conflict of interest. 

Q. Is it possible for a Buyer to purchase a listed home without an agent of their own?

If the Buyer does not have an agent of their own, then they automatically enter into a relationship with the Seller's Agent instead.  The exception to this rule would be the scenario where the buyer is a licensed individual themselves.  Working directly with the Seller's Agent is called "Dual Agency" and it creates a conflict of interest for the Agent that can backfire on the client who is naive about such matters.  For that reason, most Seller's Agents try to avoid Dual Agency.  Since a good percentage of "Dual Agency" transactions become problematical,  it just isn't worth it for anybody (principal or agent) to get involved in this scenario.   

Q. Isn't it cheaper for the Buyer to purchase a home through the Seller's Agent, provided the Seller's Agent agrees?

Generally, Seller's Agents do not want the extra liability and conflict of interest involved in a dual agency transaction (where they represent both seller and buyer for the same home).  Those that are willing to take it on are usually not willing to compromise their own fees because there is twice the work and more than twice the liability (since a higher percentage of dual agency transactions go wrong).  Also, most sellers prefer that their agents not represent buyers so the possibility of representing both buyer and seller for the same home may not even be an option to begin with.  Nonetheless, some low-integrity Seller's Agents do try to encourage buyers to enter into a Dual Agency relationship without explaining the legal ramifications.  Be warned against this scenario, because lack of good representation can end up costing the Buyer a great deal of money.

Q. If I find a home by myself, do I still need a Buyer's Agent?

It is highly advisable.  That's when the Buyer's Agent's most valuable contribution begins.     

Q. Do I save any money by looking for homes by myself without the assistance of a Realtor?

No, there is no cost-savings.  Remember, it doesn't cost the Buyer anything to have their own Realtor.  Buyers who are not working with a Realtor during the initial stages of their search are at a disadvantage.  Remember, the only person who can give you straight answers to all your questions about the market, about what's available, and about specific homes, is your own Buyer's Agent.  And your agent can point out good opportunities and steer you away from homes that spell trouble.  Having a Buyer's Agent on board from the very beginning, preferably one who has years of experience and has seen thousands of homes, is an advantage.  The other reason to establish your Buyer Agent relationship early on is so that you won't be scrambling later, when you find the right home and need to move quickly in order to secure it.  You will handicap your search and hurt your credibility if you are without a Buyer's Agent, and it is never too early to start that relationship.

Q. If I work with a Buyer's Agent but find a For-Sale-By-Owner, will my realtor be involved?

In most cases, yes.  FSBO's in San Francisco normally cooperate with Realtors from the very beginning by offering a commission equal to what other Broker-represented Sellers are paying.   FSBO's know that Buyers want independent advice about the home they buy, and that the best advice comes from the Buyer's Agent, whom the buyer already knows and trusts.  FSBO's are often overpriced because owners may have an inaccurate and inflated opinion of the value of their own homes.  Savvy buyers expect some degree of overpricing when dealing with FSBO's and seek out the help of their agent to determine just what the fair value of the home might be.  Knowing that buyers value their Realtors' opinion, most FSBO's do not pressure buyers to purchase without their Realtor's assistance, and are quite open to paying the Realtor a fee for the role in the transaction.  However, historically, less than 2% of sales in San Francisco are offered as FSBO's, so this needn't be a major concern. 

Q. Can the Buyer choose to be represented by their attorney instead of by a Buyers Agent?

Yes, some real estate attorneys may be available by the hour for this purpose.   However, remember that while the real estate attorney may have good knowledge of contract law, he or she will not be able to offer the same type of experience as an experienced Buyers Agent.  Attorneys generally sit behind a desk and do not tour thousands of homes every year, and don't have the same ability to assess what is going on with a particular property, nor the networking relationships with other agents that can be so helpful to Buyers.   Also, remember that anybody who is paid by the hour has a built-in incentive to run up the number of billable hours, and that person will have to be paid, usually in advance, whether the transaction goes through or not.  Some transactions will require a great many hours, and if you are paying your representative by the hour, it may end up being extremely costly for you.  However, in some cases, where specific issues arise that require the opinion of an attorney, for example with tenant-occupied properties,    

Q. Can I work with two Realtors in San Francisco at the same time?

There's nothing to be gained from trying to do this, in fact it complicates your task as a Buyer and can backfire by causing Seller's Agents to have a negative view about you when it comes time to present an offer.   Most experienced Buyers Agents will not work with you if you are working with other agents at the same time.  

Q. What about using a Realtor in San Francisco and a Realtor outside the city at the same time?

It's better to focus on one geographical area at a time, rather than divide your efforts and fail to catch all the opportunities in either field.  However, if you are genuinely torn between staying in the city and moving out, please talk to me.  There may be some advice,  information or options I can provide to you.

Q. How easy is it to change Realtors if I am dissatisfied?

It depends on your agreement with the Realtor.  I generally work on a flexible basis, without a binding written agreement.  This means that my clients are free to switch to another Realtor at any time.   If I am doing my job properly, there ought to be no reason to switch, and I have never experienced the problem of "losing" a client that I felt I could work with.  If I don't feel that I can take you seriously as a client, you'll be the first to know.

Q. How can you be acting in your client's best interests when you are working on a commission basis?

It is true that certain less ethical Buyer's Agents think mainly of the commission they will earn, which is normally based upon the sales price, and allow that factor to color the advice they provide to their clients.  That is why you need to select your Realtor carefully.  In my case, the fee I earn today is not my chief motivating factor.  It is the fee that I will earn tomorrow, by delivering you great service today, that is of value.  I am in this business to cultivate long-lasting relationships with clients and a strong word-of-mouth referral business, and that is only possible by putting my clients' interests first.  In my experience, integrity really pays off.

Q. What about online "discount brokerages" which offer a rebate to the Buyer?  Is this a good thing?

Any realtor or brokerage company willing to rebate part of their commission is probably unable to provide a high-quality service.  It might help if you compare real estate brokerage to other professions.  The best, the brightest and the most experienced professionals naturally go where the highest fees can be earned, not to firms which discount their fees.  This is true in medicine, law, software design, and just about any field you can imagine, including real estate brokerage.  In general, it can be observed that most service firms which advertise discounted fees are struggling to attract new business.  Such firms are plagued by high staff turnover, and have trouble holding on to experienced, competent professionals, who know they can earn more money elsewhere as soon as they get a year or two of experience in the business.  More experienced Realtors, whose advice is worth more to buyers, always work for full-commission brokerage firms.  You should not begrudge your Realtor the fee he receives because a good Realtor's service is always worth more than the fee.

Q. Where can I get free MLS info?

Check out sfarmls.com.  This is the public version of the official database that all realtors use.   To begin with, it may be helpful to browse through this website to get a sense for what is available. 

However, if you are serious about looking, there is a better option than sfarmls.com.  When I work with buyers, I give them free access to the industry's best proprietary web-based search engine, which allows them to set up automated searches.  Unlike most other search engines, it also allows them to save properties of interest and receive updates when those saved properties undergo price changes, go into contract, or close escrow.  It is a city-wide company-neutral search-tool that does not favor any particular brokerage firm's listings but gives the buyer total control over how the search is structured. 

My clients have given me rave reviews about how easy it is to conduct their search using this technology.  "We feel empowered and know that we have an advantage over other buyers who do not have this inside-track information" is a typical comment offered by my clients.  It allows them to bypass what are often quite misleading remarks contained in advertising media that appear on the web, in magazines and in the newspaper.  Instead, my buyers get the "real scoop" on what's available.

Meanwhile, for those of my clients who are seeking more support from me, I run a parallel search where I screen through the available properties, taking into account what I know of my clients' wishes and preferences, and provide my own notes and analysis about what's on the market.  In some cases I have already seen the home, or am able to quickly make a phone call on behalf of my clients to clarify something that they would want to know before making a special trip to see the home.  This sort of guidance saves my clients a great of time and enables them to focus on what's most suitable for them.  Working collaboratively in this way, we make sure that nothing gets past us.  And, my clients are saved the headache of trying to guess what a home looks like, based on misleading information contained in traditional advertising media.

Once we find a home of interest, then begins the most important stage of the search: evaluation of the property's true value, investigation into any issues that might affect the resale value in the future, and discussions about strategy for getting the home for a fair price. 

If you are just getting started and would like a no-obligation taste of what this process looks like, please email me and I will provide you with access to our searchable citywide MLS database of available properties.