Listen Up: The Value of Buyer Agency Representation
November 26, 2023
As a real estate agent with more than 40 years of transactional experience, each year I represent as many buyers as I do sellers, and I’ve been extolling the benefits of buyer agency representation my entire career. It’s never made sense to me when buyers choose to be unrepresented — the financial and emotional stakes are just too high. The recent Sitzer | Burnett class action suit and October verdict provides reason once more to opine on the significant value buyer side agents bring to real estate transactions.
For most purchasers, buying a home is not only an acquisition representing a significant portion of net worth; more often than not, the process is high on life’s stress meter and can be fraught with anxiety. Although New York State permits dual agency, I’m not a fan, as in my view it’s impossible to represent two masters and provide undivided loyalty, allegiance and confidentiality to each side simultaneously. When a direct buyer comes to one of my exclusive listings, I make it clear from the outset that I represent the seller in the transaction, but that I'd be happy to assist with the mechanics of preparing the board package because by then, once we are in contract, our objectives are aligned. Experienced agents actually prefer to do business with other experienced dealmakers and not directly with unrepresented buyers; they agree that when each side has its own representation, the likelihood is greater that the deal will proceed smoothly and with fewer hiccups to a successful close.
Here are 10 compelling reasons for buyers to collaborate with a professional agent:
Experienced agents provide the necessary perspective to evaluate and interpret online housing history.
They offer insights about choices and resale possibilities.
They lend the distance required for the give and take of bargaining during negotiations. Without the buffer of a third party, ego can get in the way.
Experienced agents understand the importance of timing in negotiations and know when to step up or slow down the process and how to prioritize and identify areas for flexibility and compromise.
Armed with discretion and diplomacy, they are well-versed in the psychology of buying and can ease stress and provide emotional support.
It takes a seasoned professional to address the complexities of a co-op board review.
As the transaction’s point person, the buyer’s agent not only brings the players together but holds together the deal details to keep everything on track.
They can call in favors as needed because of strong working relationships with lenders, contractors, attorneys, architects and movers.
They are adept at anticipating and overcoming obstacles.
They pay close attention to dates, including when a mortgage commitment is due to expire, or when a contract might be canceled because a co-op interview has not occurred 30 days after the contract’s expressed close date.
At the heart of the recent class action suit and verdict in Kansas City which is being appealed, was NAR’s "cooperative compensation rule" which mandated that listing agents compensate buyer brokers. In an effort to promote greater transparency in New York City, beginning January 1, 2024, commissions to buyer brokers and seller brokers will be decoupled; that is, after the new year, offers of compensation to buy side agents will originate with the seller, and as we speak, brokerages across the city are drafting Exclusive Buyer Representation Agreements.
Like the sellers who interview agents to choose who will best represent their interests, buyers should do the same. Without the advocacy of professional agency representation, pressures can mount, negotiations can be compromised, time wasted and opportunities missed. There’s every good reason for a buyer to have agency representation.