Exclusive buyer's brokers work only with buyers and don't take listings. They're obliged to help you find the best deals and lowest price. Unfortunately, agency standards have changed so much in the past ten years that real estate agents themselves are likely to be confused about their obligations to buyers and sellers, even though in most places they are supposed to give you a disclosure form explaining your relationship. Bottom line: You don't truly have an advocate in your corner unless you both sign a contract saying so.
Kiplinger's Personal Finance Magazine
If you ever doubted the value of real estate agents who work solely for home buyers (as opposed to traditional agents who report to sellers, consider this: A recent study by U.S. Sprint found that 232 relocating Sprint employees who hired buyer's brokers paid an average of 91% of a home's list price. People who use traditional agents typically pay about 96%. On a house originally priced at$150,000, that's a difference of $7,500.
Money Magazine
When Sallye and Jim Ryan wanted to move from their Tampa apartment to a three-bedroom home this spring, the busy couple used a buyer broker, Beth Tansey, to help. Within a week, they had bid on the house they now own. Sallye liked being able to delegate the house-hunting. "With both my husband and me working, it was a lot easier," she says. "I don't think I would have found this house that I really love without her. There are so many homes for sale here, I would probably still be looking.
Because Tansey is a buyer broker, who exclusively represents the home buyer's interests, the Ryan's trusted her to find the best deal on a house that suited their needs. By contrast, a traditional real state broker is legally bound to work for the seller who pays the commission and therefore may be more intent on selling listed homes than finding your dream house. Even Realtors who don't hold the listing on a given house act as subagents to the seller. So unless a broker says that he or she is working for you -- brokers are now legally obliged to disclose who they represent -- you can assume the broker is working for the seller. Such agents must pass on information such as the buyer's income to the seller, who then has a better idea of what price to hold out for.
Because these brokers are obliged to get buyers the best deal possible, they approach houses with a critical eye for apparent flaws. You'll still need an inspector to uncover hidden defects, however. Buyer brokers also show properties sold by the owner, which can be cheaper because the only commission is what you agree to pay your broker. Sellers' agents usually won't show these homes because they don't make commissions on them.
Brokers representing buyers should also appraise the value of the house, negotiate the price, and pre-qualify you for a mortgage, sometimes at a better rate. Buyers' Agent brokers, for instance, narrow mortgage bids from 15 lenders nationwide to the three best offers -- and then get those three to rebid. "A well-trained, experienced buyer broker is a great asset," says Peter Miller, author of How to Sell Your Home in Any Market ($12, Harper Perennial) and other real estate guides. "You won't do any worse, and you may do a lot better.
Usually, the buyer broker splits the sales commission with the seller's agent, just as a subagent who didn't have the listing would with the broker who did. So the fee still comes out of the sale price. Some people might assume that buyers' agents have an incentive to keep the price high. But again, the broker must get you the best deal. "In my experience, all of them do," says Stephen Brobeck, executive director of the Consumer Federation of America.
A conflict of interest is more likely when a real estate firm that represents sellers assigns you one of its brokers as a buyer agent. That's why many people believe an "exclusive" buyer broker is preferable. If there aren't any in your area, and you have to use a listing broker, "make sure they disclose when they are showing you properties they have a financial interest in," says Brobeck.
Business Week
San Diego County:
Agua Caliente, Agua Caliente Hot Springs, Allied Gardens, Alpine, Alpine Heights, Alta Vista, Ballena, Bankhead Springs, Banner, Barona Mesa, Barrett Junction, Barrio Logan, Bay Park, Bear Valley, Birch Hill, Blossom Valley, Bonita, Bonsall, Borrego Springs, Borrego Wells, Bostonia, Boulder Oaks, Boulevard, Broadway Heights, Buckman Springs, Buena, Cameron Corners, Campo, Camp Pendleton, Canebrake, Canyon City, Cardiff by the Sea, Carlsbad, Carmel Mountain Ranch, Carmel Valley, Cas De Oro, Castle Park, Centre City, Chollas Creek, Chollas View, Chula Vista, City Heights, Clairemont, Combs Camp, Coronado, Coronado Cays, Cottonwood, "Crest, Crown Point ", Cuyamaca, Dehesa, Del Cerro, Del Dios, Del Mar, De Luz, Descanso, Descanso Junction, Desert Lodge, Dulzura, Eagles Nest, East Elliott, Eastlake, Eastlake Greens, Echo Dell, Eden Gardens, El Cajon, Emerald Hills, Encinitas, Engineer Springs, Escondido, Eucalyptus Hills, Fairbanks Country Club, Fairbanks Ranch, Fallbrook, Fernbrook, Fleetridge, Fletcher Hills, Flinn Springs, Foster, Glen Oaks, Glenview, Golden Hill, Grant Hill, Grantville, Green Valley Falls, Grossmont, Guatay, Harbison Canyon, Harmony Grove, Harrison Park, Hidden Glen, Hidden Meadows, Hillcrest, Hulburd Grove, Imperial Beach, Indian Springs, Irving's Crest, Jacumba, Jamacha, Jamul, Jesmond Dene, Johnstown, Julian, Kearny Mesa, Kensington, Kentwood in the Pines, La Costa, La Jolla, La Jolla Amago, La Jolla Shores, Lake Henshaw, Lakeside, Lakeview, La Mesa, La Playa, La Presa, Lemon Grove, Leucadia, Lincoln Acres, Lincoln Park, Linda Vista, Live Oak Park, Live Oak Springs, Logan Heights, Loma Portal, Lomas Santa Fe, Lomita, Lynwood Hills, Manzanita, Memorial, Mesa Grande, Middletown, Midway, Miramar, Miramar Ranch, Mira Mesa, Mission Bay Park, Mission Beach, Mission Hills, Mission Valley, Mission Village, Morena Village, Moreno, Morettis, Mountain View, Mount Helix, Mount Hope, Mount Laguna, National City, Navajo, Naval Amp Base, Nestor, Normal Heights, North Bay Terraces, North Encanto, North Jamul, North Park, Oak Grove, Oak Park, Ocean Beach, Oceanside, Ocean Hills, Ocotillo Wells, Old Town, Olivenhain, Otay, Otay Mesa, Pacific Beach, Pala, Pala Mesa Village, Palm City, Palomar Mountain, Palo Verde, Paradise Hills, Paso Picacho, Pauma Valley, Peninsula, Pine Hills, Pine Valley, Point Loma, Potrero, Poway, Puerta La Cruz, Rainbow, Ramona, Ranchita, Rancho Bernardo, Rancho Del Rey, Rancho Palo Verde, Rancho Penasquitos, Rancho San Diego, Rancho Santa Fe, Rincon, Rock Haven, Rolando, Rosemont, Roseville, Sabre Springs, San Carlos, San Diego, San Diego Country Estates, San Felipe, San Ignacio, San Luis Rey, San Luis Rey Heights, San Marcos, San Onofre, San Pasqual, Santa Ysabel, Santee, San Ysidro, Scissors Crossing, Scripps Miramar Ranch, Serra Mesa, Shady Dell, Shelltown, Shelter Valley Ranchos, Sherman Heights, Skyline, Solana Beach, Sorrento Hills, Sorrento Mesa, Sorrento Valley, South Bay Terraces, Southcrest, South Encanto, South Oceanside, South Park, Spring Valley, Stockton, Sunnyside, Sunshine Summit, Talmadge, Tecate, The Narrows, The Willows, Tierra Del Sol, Tierrasanta, Tijuana River Valley, Torrey Pines, Twin Oaks, University City, University Heights, Uptown, Valencia Park, Vallecito, Valley Center, Via De La Valle, Victoria, Vista, Warner Springs, Whispering Pines, Winter Gardens, Winterwarm, Witch Creek, Wynola
What Is An Exclusive Buyers Agent?
What Can An Eba Do That Others Can't?
What Are Fiduciary Duties And Why Are They Important?
The Secret Big Corporations Have Known For Years
Our Standards Of Practice - Exactly What We Will Do For You
Should You Use The Agent Who Sold Your Home As Your Buyers Agent?
Take Some Confusion Out Of The House Hunting Process
Find an Exclusive Buyers Agent in a different city or state
Privacy Statement
Home Page
Contact Us
How Much Home Should You Buy?
You may have heard a real estate Agent or someone else say, "Always buy the biggest home you can afford. It is a good investment and the larger the investment the larger the return on investment will be".
But is that good advice for you? Maybe, maybe not.
When deciding to buy a home the first thing you need to do is get a loan. Yes, get the loan before you shop for homes. The lender will give you a letter stating how the maximum amount they will lend you given your income, debts, and the amount of cash available for down payment and closing costs.
Now that you know the maximum amount you can borrow and what the monthly payment will be on that amount, ask yourself some questions about your "comfort level". We all have a different comfort level when it comes to debt.
Some things that affect each individuals comfort level are:
Do I worry a little or a lot about money I owe?
Am I comfortable that my job is secure and my income will be stable for the next few years?
Do I reasonably expect to have a considerably larger income in the near future?
Am I willing to change my lifestyle (travel less, eat out less often, keep our car for a few more years) in order to make a house payment?
Think about all of that and then decide what payment you are comfortable with. If it is the maximum amount the lender has stated, fine. But if it is less than that amount, then buy less home.
The new home should be a place of comfort, not a place to sit in and worry about how you are going to pay for it!
Besides, you can always "move up" later if you situation or comfort level changes.