What Is A Buyer’s Broker? What Is An Exclusive Buyer’s Agent? Should I Use One?
If you’re planning on purchasing a home, you may have heard about real estate agents with job titles as buyer’s brokers or exclusive buyer’s agents. Are they different or offer benefits that a normal real estate agent would not?
Read on to discover more about buyer’s agents, exclusive buyer’s agents, and whether you should use one when looking to purchase a new home.
What Is A Buyer’s Broker?
A buyer’s broker is a type of real estate agent that represents prospective buyers of real estate. Buyer’s brokers give exclusive representation for a client with fiduciary responsibility to their client. This means that buyer’s brokers will work in the best financial interest of their clients to secure a home at the lowest fair market value, assist you in determining an offering price, and many other tasks.
It should be noted that there are “buyer’s agents” and “buyer’s brokers”, which is a subtle distinction. A broker is a title reserved for real estate agents that have completed further training and certification typically after being an agent for 3 or more years. Brokers take on a more managerial and supervisory role in a real estate firm, but still take on work for clients looking for property. The advantage of buyer’s brokers versus regular buyer’s agents is that they’ve been around the block and have a wealth of experience to draw from.
Should I Work With a Buyer’s Broker?
Because brokers are more skilled and have a wider knowledge base, buyer’s brokers usually deal with high-value properties. Buyer’s brokers have a more established presence in their industry, which means that they can offer homes that may not be listed yet or more exclusive offers. In exchange, buyer’s brokers ask for a higher commission and may have a contract that requires guarantees for their time.
For more homebuyers, a buyer’s broker may be overkill, especially when trying to negotiate prices with a seller. Sellers may be turned off from having higher closing costs with a bigger commission, potentially making the process of finding the right home longer.
What Is An Exclusive Buyer’s Agent?
An exclusive buyer’s agent is another title given to a real estate agent with a special distinction. Exclusive buyer’s agents are a type of real estate agent that has only one role: To help clients purchase properties.
This may seem like an obvious statement, but exclusive buyer’s agents comes with a number of advantages that distinguish them from other types of real estate professional:
- Exclusive buyer’s agents do not sell property. This means that they will be less likely to persuade buyers to purchase homes that they created listings for - a potential conflict of interest. This type of sale falls into a category of “dual agency” and is illegal, but can be a problem for unscrupulous agents that work out deals with other agents to get a deal that’s in their own best interest (not the clients).
- Because of their exclusivity, they are well versed in homes on the market and know what to look for in properties. Because their commissions come from the seller exclusively (buyers don’t pay a dime), they are motivated to get the best price in the shortest amount of time.
Should I Use an Exclusive Buyer’s Agent?
If you are debating the merits of whether you should use an exclusive buyer’s agent, you should know that exclusive agents usually run their own agency that’s independent of major brands, such as State Farm, Keller Williams, and other name brands. This means that exclusive buyer’s agents may have an in-depth knowledge of specific types of properties or an area.
Vice versa, exclusive buyer’s agents may be excluded from listings that aren’t on the market yet, giving buyers less access to homes that may eventually be listed at an agency before reaching the MLS (Multiple Listing Service). This can be a drawback for buyers that want to weigh all of the possible homes available rather than ones that the agent is aware of.
To know if you should work with an exclusive buyer’s agent, be sure to do your research. Look for reviews from new homeowners that tell more about how the client was handled during the entire process. Compare negative reviews for any trends and look for how often they close real estate transactions. If they’re busy, chances are you will have an easier time to find your dream home.