What a Buyer Agent Can and Cannot Do

J Philip Faranda November 11, 2009

Here in New York just about every buyer north of New York City working with brokerage uses a buyer agent. It just makes sense; the seller has an advocate in the listing agent looking out for them, so buyers should have the same advantage in the largest transaction of their life. Moreover, it almost never costs the buyer anything out of pocket beyond their purchase. A good buyer agent can help with many things, but there are some things we can’t do.

Let’s start with what a good agent can do. 

 

  • Due diligence on the property background, sales history, and condition. I’m the guy that advises you to test that oil tank, septic system, and presence of radon. I check with the municipality to ensure that the taxes are correct, the square footage is accurate, and everything represented by the listing agent is true. 
  • Market activity- Is the house overpriced? Underpriced? Competitive for the area? Listed previously with another broker? I can tell you what houses like it are selling for, and in many cases I know the other sales in the area very well. I may have personally made some of those sales!
  • Negotiate– I can sniff out a divorce. I know what questions to ask. I probe for weaknesses. I know exactly how to handle the listing agent, certainly far better than an unlicensed, first-timer. I have seen listing agents hang buyers out to dry in cases where the buyer thought themselves wise to deal directly with the lister. 
  • Advise– I can tell you if the time is right to raise your offer, stay put, how to handle a counter offer, and tons of other things you may not have even thought of. I do it all the time. 
  • Refer you to competent lawyers, mortgage sources, inspectors, and other specialists you need to make sure you have proper representation and assistance. Need an estimate on a new deck? I’ll get you 2 contractors. Need to know if a roof is going to need a replacement? I’ll get you 2 honest roofers who’ll tell you the truth, not shake you down for a job. 
  • Serendipity– I have verified estimated fuel and utility costs, listened for train noise of a nearby line, timed a commute, and hundreds of other things you may not be able to do yourself. 
  • Is there more? I could probably write for hours. But you get the point. 
What are things a buyer agent cannot do? GOOD QUESTION! Here’s a hint: We aren’t pirates. We cannot:
  • Predict the future. I have NO IDEA what a seller will take. Don’t ask me to ask their agent. They are ethically bound to represent the asking price, period. I have NO IDEA what the house will sell for in 5 years. There is no way to tell. I have NO IDEA when the roof or furnace will go.   
  • Steal a house. Well, in most cases. Yes, it is a buyer’s market. No, that doesn’t mean that you can insult the seller and presume they are desperate and will take anything. Have we gotten some fantastic deals done well below asking price? I have. But once that lowball offer is rejected or countered at full price, you need to understand that the odds of a steal are remote. 
  • Hypnotize the seller and their agent into taking your 80c on the dollar offer. This is especially the case with highly desirable properties with recent price reductions and plenty of interested people looking. People are all about the money. If you are in a competitive bidding situation, they take best and highest.  
  • Manipulate reality. This is somewhat like hypnosis. If you are making a low offer with a low downpayment and a pre approval from some Internet lender, you are not giving me the sufficient tools to make you look good in the eyes of the seller or their agent. 
  • Beat the other side into submission. Being adversarial doesn’t work. Sellers aren’t bad people for wanting to maximize what they net for their property, so getting insulted when they counter offer or don’t accept all of your terms the first go around doesn’t make them unreasonable. It makes them people with their own wants and needs which should be respected and considered. Advocacy is not pillaging. 
Buyer Agents Seldom Steal Houses
A few other observations to keep in mind, especially in this environment where the buyer has the upper hand:
  • Not every seller is desperate.
  • A win/win outcome, or even the appearance of one, is superior to a win/lose outcome. I have seen sellers who felt like they were held over a barrel by a smug buyer replace large appliances with cheaper ones and do other things the buyer didn’t like but couldn’t fight because of ill feelings over how they were treated. 
  • Never underestimate the importance of psychology and perception. If you are going to offer $395,000 on an opening bid consider 400k instead. 
  • Nobody likes a bully. Sellers bullied buyers back in the hot market. It wasn’t wise. It isn’t wise to demand that a 75 year old vacate their home of 40 years in 30 days instead of 60 just because it works for you. Think win/win again. 
  • Don’t overplay your hand. A 10-year old kitchen with corian counters and black appliances instead of chrome isn’t outdated or 3rd world.  
  • If you adore a fantastically priced, spectacularly appointed property you probably aren’t alone. Don’t be shocked if such a home has competitive bidding. 
Here’s the bottom line: if it sounds like I am defending sellers I am not. I am trying to portray that there are people on the other side just like you. Empathy makes you a better negotiator, and better negotiators get better deals. 

 

Join The Conversation

This site uses Akismet to reduce spam. Learn how your comment data is processed.