There are many ways to find your dream vacation property other than spending countless hours on your computer. You might consider engaging the services of a buyer’s agent. This can be especially useful to anyone seeking a vacation or resort property. Finding just the right property in a distant locale that will meet all of your requirements can be time consuming. But having a buyer’s agent working for you in the community you choose, can narrow the possibilities and can maximize the likelihood that you will be successful in your quest for that perfect second home.
A changing real estate market, coupled with increasing sophistication among consumers, has given rise to increasing demand in the market for buyers to have their own representation in real estate transactions. This evolution has led some real estate professionals to move from the traditional “sellers” business model to becoming buyer’s agents. It is important to understand that, unlike a listing agent, (who works for the home seller), a buyer’s representative works for, and owes fiduciary responsibilities to the real estate buyer, and has the buyer’s best interests in mind throughout the entire real estate process.
And with the growing number of markets emerging as buyers markets, those seeking second home properties are faced with many more properties from which to choose. With increased inventories and prices dropping in some markets, engaging a buyer broker can be even more helpful for savvy buyers. Karen Johnson, of Buyer Brokers of Cape Cod, in Massachusetts, www.buyerbrokers.com, points out that these changes can mean that with the help of an experienced buyer broker, smart shoppers can find a second home “that maybe they couldn’t afford two years ago. With our help, they will get more for their money than they would have in the past. We search all of the available inventory for our customers. We don’t just use the MLS (Multiple Listing Service), we search non-listed properties and for-sale-by-owner properties too. This expands the choices available to our buyers.”
This evolving specialty can take a variety of forms. To understand the choices the marketplace now offers buyers, it is important to understand the terms used to describe the varying forms of representation.
Here is an outline of the types of buyer representation now available to home-buyers. The terms and definitions may vary somewhat from state to state, but the broad categories should apply, regardless of where you are buying a home.
It should be noted that undisclosed dual agency arrangements are illegal. This prohibition provides reasonable assurance that all parties to a real estate transaction fully understand to whom the agent owes a duty of loyalty. As with many contractual arrangements, the devil is in the details.
Agents who operate under rules of dual agency are faced with difficult choices when circumstances arise in which a buyer and seller have differing interests. Problem scan emerge due to the inherent difficulty involved in trying to provide fair and equitable treatment to both parties. For example, it is in the interest of the agent to obtain the highest possible price and best terms for the sale of a property that they are listing for a seller-client.
At the same time, a buyer’s agent is obligated to secure the lowest price and most favorable terms for their buyer-clients. Balancing these two competing interests can be a tightrope act for real estate professionals following the dual agency model.
In 1988, the Real Estate Buyer’s Agent Council (REBAC), was founded to “promote superior buyer representation skills and services” for real estate professionals offering their services to buyers. An affiliate of The National Association of REALTORS (NAR) since 1996, REBAC’s membership now numbers well over 40,000 and is the world’s largest organization of real estate professionals concentrating on buyer representation. REBAC offers a training program that, when completed, allows the participating Realtor® to qualify for designation as an Accredited Buyer Representative (ABR).
Research by the NAR has shown that when a buyer’s representative is used, the prospective buyer found a home one week faster and examined three more properties than consumers who did not use a buyer’s representative.
A majority of buyer’s agents generally take a percentage of the seller’s agent’s commission on the sale, but some instead charge the buyer either a flat fee or an hourly rate, according to Janet Branton, the executive director of REBAC. Either way, the arrangement is spelled out in a contract.
Another trade group representing buyers agents is the National Association of Buyers Agents, NAEBA. The group was organized 1968 by a group of Realtors® in New England to respond to changes in the real estate market and to provide another option for representation to real estate buyers. There is a simple premise at the heart of the Buyers Agent business model. This principal is described by the NAEBA as follows: “the homebuyer has a right to full and equal representation and service as the seller receives from a listing agent.”
Roy Grimm, an Buyers Agent with Buyer Brokers Agency of Sedona (AZ), and a member of NAEBA, explains how the EBA business model works.
“Our clients are often surprised that we don’t try to sell them the Sedona homes and land we show them. We usually do point out what we see as the good and bad points of various properties that we tour and our purpose is to help them find the one that will best suit their needs. We do tell our clients about what we think are the best deals, but have no vested interest in any particular property. We like that because it keeps us objective and focused on our clients’ needs rather than on pushing company listings. So, we don’t sell; there’s no need to. Our clients tell us what they like and when they are ready to put in an offer.”
In many hot and emerging markets for resort and second home properties, both domestic and international, there are experienced buyer brokers who can help you find and purchase just the property you are seeking.
For assistance in finding a buyer broker for your second home you can consult one or more of these groups: Real Estate Buyer’s Agent Council (REBAC), www.rebac.net; National Association of Buyers Agents, www.naeba.org; Real Estate Buyer Agent Locator, www.buyersresource.com; The Buyer’s Agent, www.forbuyers.com.
Tim Menk is a staff writer and second home owner. He can be reached at [email protected].
Copyright 2007 2ndhome™ Association, Ltd. Used by permission of the Publisher from the Spring 2007 edition of 2ndhome™ Journal.