Today we’re going to talk about the things a buyer agent would do when you engage them.  They actually are quite helpful, especially given that it’s technically free for the buyer.  But therein lies the deception, because the costs are all born by the seller of the apartment who pays the full 6% commission, which is typically split half and half between buyer and seller agent.  This raises the cost of property for everyone including the buyer, even though the buyer is not directly paying for the commission.  However, it is too tempting for a buyer usually to not accept the services of a buyer’s agent.  The buyer agent is promising to do property searches, negotiation, coordination and handling of all matters of your real estate search, in addition the buyer agent coordinates your weekend open houses in such a manner that you can see the most properties in the shortest amount of time.  It is really a service that is very hard to turn down, especially as it’s someone that you can call on a daily basis or even hourly basis and they have to take your call.  For that kind of concierge service, and the fact that it is nominally free, makes it way too hard to turn down for most buyers.  What else do they do you ask?  Will that really depends on the state you’re in.  In a state like California, where forms for closing are very standardized, the real estate agent typically does the role of the transaction attorney as well.  There really isn’t an attorney necessary in a state like California because the forms are just so standard that the realtor can typically shepherd the buyer or seller through the transaction and the standard forms.  However, in a state like New York and especially NYC itself, having a transaction attorney is crucial to being able to close a deal.  In NYC, brokers are like prima donnas, they hand the ball off to the attorney as soon as a handshake is agreed upon on price between buyer and seller.  They really don’t do anything besides match a buyer and seller, which is almost a joke considering that the internet really facilitates this.  But you can never underestimate the amount of therapy and comfort of being able to speak to a buyer’s agent to complain and say bad things about a property to try to guide the price lower, to your buyer agent instead of directly to the seller.  It’s someone to stand in between you in negotiating.  And really can be quite useful so I don’t want to give them too bad of a rap!

Hey guys today we’re going to talk about buyer agents: why you should consider working with them.  If they’re not all that to begin with, some are actually very useful in helping you find a home.  My first home purchase, I asked a buddy who happened to have a real estate agent license to help me.  He actually was quite useful, primarily because he helped organize my open houses on the weekend after work.  It’s really not that bad a thing if you think about it, it’s like having a free secretary.  Needless to say, our friendship became strained after the first purchase because buying a home can be quite emotional.  I definitely remember shouting at him quite a few times over the purchase price, and over how unreasonable I thought the price and the square footage was.  So I suppose in a sense even though they earn egregiously it too much, 3% of the purchase price that is, they did do a lot of therapy I suppose.  Most people are surprised that buyer’s agents really do control such a large percentage of the buyer market.  People are always surprised that agents still exist in this day and age, but the reality is there are thousands and thousands of real estate agents and they are all out there talking in your face to buyers.  So it really shouldn’t come as a surprise to all the Internet people that agents have not gone extinct.  How can you expect agents as a class to go extinct if there are literally hundreds of thousands of them, and they are all salespeople, and they are all out there with a large dollar amount incentive to go after buyers.  And the service they are offering is free, customized and by a human.  That by itself is extremely tough to beat even if you had a Zillow that captured 100% of buyers.  It’s so hard to beat 100,000 plus people that are willing to work for “free” and provide a personalized human touch and services to buyers.  That is way too hard to beat.  Since we’ve established that buyer’s agents aren’t going away anytime soon, the question is how to take advantage of it as an investor.  First of all don’t ever pay a buyer’s agents directly but that doesn’t mean you can’t get some money from the money that they earn.  The following articles are going to talk about how buyer rebate works so stay tuned.