FAQs - Information Home Buyers Should Be Familiar With

FREQUENTLY ASKED QUESTIONS (Click on questions to view answers)

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If I use an Exclusive Buyer's Broker it will cost me more money, right?
If you are paid a percentage of the purchase price, isn't it in your interest to try to keep the price high?
Are you Realtors?
Why don't you list property for sale? What properties can you show us if you don't list homes for sale?
If I choose not to have representation and just go directly to the seller's listing company, won't I save money?
Do you work a particular area or part of town?
If I'm looking for a certain neighborhood maybe I should go with a local agent who is more "familiar" with that neighborhood?
I heard that what you do is not really any different than what seller's Realtors do. Is that true?
Well, I'd rather deal with the Seller's agent directly, since they know the seller's motives, and can help me. Bringing someone else in will only complicate things.
What if I've already seen a property with a seller's agent and now I want to use your company as my Exclusive Buyer's Broker to buy that home?
Are you in an adversarial relationship with the Seller and the Seller's agent?
Can you help me with finding a reputable lender?
Since you're working for my benefit, and you're going to tell me everything I need to know about a house, I don't really need a home inspection, do I?
What if I don't want to buy the home after the home inspection?
What if I am in contract but I do not get a mortgage?
What if I have a home to sell first? Can you still help me?
Doesn't that sound more complicated than having just one agent for everything?
Aren't all Realtors calling themselves "buyer's agents" these days?
What is dual agency with designated salespersons?
What's the difference between an "Exclusive Buyer's Agent" and an "Exclusive Buyer's Broker"?
So, you fully represent my interests as a Buyer, at all times, no matter which home I want to purchase?

ANSWERS TO FREQUENTLY ASKED QUESTIONS

If I use an Exclusive Buyer's Broker it will cost me more money, right?

No. Studies have shown that using an exclusive buyer's broker actually saves buyers more money. For example, U.S. Sprint Corporation found that 232 relocating employees who used exclusive buyer's brokers paid an average of 91% of the asking price, versus employees using traditional seller's agents who paid an average of 96% of the asking price.

Our fee is already included in the price of any listed property just like any traditional seller agency commission. Our loyalty is solely to home buyers. We are legally obligated to help you negotiate for the lowest possible price and most favorable terms. Exclusive buyer's brokers typically save buyers more money versus using a traditional seller's agent. Seller's agents owe their loyalty to home sellers and are legally obligated to negotiate for the highest possible price at the most favorable terms.

Seller's agents measure their success by dollar volume of property sold. Exclusive buyer's agents measure success by how much we actually save our clients in time and money.

If you are paid a percentage of the purchase price, isn't it in your interest to try to keep the price high?

We have a fiduciary obligation to work for our buyer's interests. Our agents always attempt to negotiate a lower price for you. The interests and goals of our clients are above our own and anyone else's in the transaction as a matter of law.

Consider this - for each $1,000 we save a client, our company will sacrifice additional compensation of only $20 to $30, which is then shared with our agent. Our agent's commission is reduced by about $12.50. We will never risk losing our licenses and future referrals from our clients by not always acting in their best interest- it's just not worth it.

I prefer to work with a Realtor. Are your agents Realtors?

Yes. We are members of the Westchester County Board of Realtors, the New York State Association of Realtors, and the National Association of Realtors. As Realtors we have full access to all listings on the Westchester-Putnam Multiple Listing Service (MLS).

Why don't you list property for sale? What properties can you show us if you don't list homes for sale?

Not listing property for sale is the only way to ensure, by law, that you receive undivided (complete) loyalty from us at all times on any property. This enables our firm to fully concentrate and focus on your housing needs and goals only, never sellers. Buyers receive undivided company loyalty, professional representation, full disclosure, and advocacy on any home 100% of the time without conflicts or limitation of duties.

By law no listing company offering 'buyer agency' can provide or guarantee this level of loyalty or representation to home buyers.

As Realtors our company has full access to the MLS and can show you any property listed with any Realtor. We can expand the search to include For Sale By Owner properties, which traditional agents do not like to do. In addition, we can include For Sale by Builder homes, and other property from any other source. Traditional listing agents usually prefer to show only their own listings or their company's listings. Why? They receive a larger commission split when selling an 'in-house' listing, and are required by to promote their own company listings.

If I choose not to have representation and just go directly to the seller's listing company, won't I save money?

Absolutely not. The fee that we would have received, which you are paying anyway as part of the purchase price, will just go to the listing company. They will get a full commission-double the money, and you will only get "dual agency" or no representation at all.

Do you work a particular area or part of town?

No. Unlike traditional seller's Realtors, we do not "farm" any particular area or town. We work all over Westchester County, with a wide variety of clients and price ranges. We do not "push" any in-house company listings because we do not have any.

If I'm looking for a certain neighborhood maybe I should go with a local agent who is more "familiar" with that neighborhood.

Not necessarily. Again, traditional seller's agents are trying to sell you something, so they may tell you only what you want to hear. By law they cannot tell you "what is wrong" with any of their listings and neighborhoods, how to negotiate, if the price is too high, or any other information which reduces the seller's ability to sell at the highest possible price. We have successfully represented many buyers throughout Westchester County, as well as other counties in New York.

I heard that what you do is not really any different than what seller's Realtors do. Is that true?

No. If another agent who takes listings, or whose company takes listings, says they can do what we do, they are completely mistaken. They cannot, by law, offer Exclusive Buyer's Agency. Ask them what happens if you become interested in one of their own listings, or their company's listings? Who do they represent then? (Hint: They already have a legal obligation to the seller by written contract- their exclusive listing agreement).

Well, I'd rather deal with the Seller's agent directly, since they know the seller's motives, and can help me. Bringing someone else in will only complicate things.

Keep in mind that the seller's agent has signed a contract - the listing agreement - with the seller that legally binds them to promote the seller's interests in the marketing and sale of their home. Seller's agents are in violation of the law and face serious penalties if they do anything to help or benefit you which reduces the seller's ability to sell at the highest price and at the best terms. That means keeping the seller's goals and interests confidential. Legally, seller's agents cannot tell you what that property is really worth, how long its been on the market, previous asking prices, reason for selling, or even if the seller will accept less than the asking price. However, seller's agents are required to disclose everything they know about you to the seller, including your ability to purchase, any contemplated higher offers, mortgage status, assets, income, level of interest, employment history, etc.

When shopping for a home, do you want an agent to represent your interests, or the seller's? The choice is yours. Buyers pay for the brokerage fee either way since it's already built into the purchase price.

What if I've already seen a property with a seller's agent and now I want to use your company as my Exclusive Buyer's Broker to buy that home?

Well, you would be better off calling us before you see it. If you saw the home at an open house you probably are not bound to that agent. However, if you called from a yard sign or an advertisement, you may have to work with that agent to purchase that particular home. This also depends on whether the agent followed proper procedure, as well. Call us for an assessment of your particular situation before you go any further.

Are you in an adversarial relationship with the Seller and the Seller's agent?

Not usually. Before Exclusive Buyer's Agency, all agents involved were Exclusive Seller's Agents and worked for the seller's interests, including your "agent" (who was really only your 'salesperson'). All we do is level the playing field. Since we represent only buyers who are qualified to purchase, seller's agents appreciate that and know that our clients are "real."

Can you help me with finding a reputable lender?

Certainly. Since we only work for buyers, we have established good working relationships with the best lenders on a regular basis. We can also refer you to the most competent inspectors, attorneys, engineers, architects, contractors, and other providers. Of course, our buyers are free to choose whomever they like. We do not receive or accept bonuses or kickbacks from anyone we refer.

Since you're working for my benefit, and you're going to tell me everything I need to know about a house, I don't really need a home inspection, do I?

Yes, you do. As a matter of fact, we really do not want to represent any buyer who isn't willing to have a home inspection. In likely the most costly long-term financial commitment of your lifetime, a thorough examination of the property by a licensed professional engineer is very strongly recommended - for a variety of reasons.

What if I don't want to buy the home after the home inspection?

You are under no legal obligation to buy the home- just back out of the deal. The only expense to you was the cost of the home inspection. In Westchester County New York, contracts are drawn up by the seller's attorney only after all inspections have been completed.

What if I am in contract but I do not get a mortgage?

Most contracts have a Mortgage Contingency Clause. As long as you have not waived that contingency, you can back out of the purchase if you do not receive a mortgage commitment and have acted in 'good faith.' Your deposit (earnest money) should be returned to you. Consult your attorney for more information.

What if I have a home to sell first? Can you still help me?

Yes. People seem to think that we cannot help someone who has a house to sell first. While we do not list homes for sale, we can recommend experienced, professional, and ethical agents to you to help you sell your current home. This way, you can have a professional seller's agency helping you sell, and you'll have us to help you purchase. You will also avoid getting into Dual Agency, which has serious drawbacks (see below for more on Dual Agency). If you choose to sell as a For Sale By Owner, we can provide you with comparable sales data in your neighborhood and point you in the right direction. We cannot, however, provide any "client-level" services to you as a seller.

Doesn't that sound more complicated than having just one agent for everything?

It might sound that way, but it's not. What if your "one" agent/company selling your home was also "representing" the buyer for your home? And what if that agent/company was also representing the seller of the home that you wanted to buy? Then who's working for whom? And how much money is that agent/company making at your expense? Now that's really complicated! Think of it this way: people are relocated from out of town all the time. They always have one agent from a local company selling their current home, and another agent from a different company helping them buy their new home. It happens this way every day. How is this any different?

Aren't all Realtors calling themselves "buyer's agents" these days?

Traditional sellers' agents may offer to be a non-exclusive "buyer's agent" but by law cannot be an Exclusive Buyer's Agent because they work for companies which list homes for sale. What's the difference? If you are interested in any of their company's listings, they may become a 'dual agent' with the written acknowledgement and consent of both buyer and seller. A dual agent is a disloyal agent to both parties- you are then "on your own" to negotiate price and terms, and to decide what is right and wrong with that property. The listing company may even request that you forfeit your client-level status in writing and become an unrepresented customer to buy that in-house listing, while the seller remains a fully represented client- the old bait and switch! Dual agency has been strongly discouraged for many years by Realtors, attorneys and industry experts as a legal and ethical gray area due to its inherent conflict of interest. Smart home buyers avoid dual agency.

Note: A non-exclusive buyer's agent may require that you to sign an exclusive right to represent agreement. This contract requires you to work with only that agent and company in the purchase of any home, including their own company listings. If you choose to buy a home listed through that agent's company, they will become a dual agent. This is very good for the agent, but not very good for homebuyers.

Dual agency serves the financial interests of the listing company by enabling it to collect a full commission (double the money), and control both sides of the transaction. Dual agency does not protect the interests of home buyers.

We all know you can't represent two masters. At Buyer's Edge Realty we don't even try; dual agency is never an option!

Click HERE to read the New Agency Disclosure Requirements for New York State.

Click HERE to read the New York State Disclosure Form for Buyer and Seller.

What is dual agency with designated sales agents?

Please be very wary of this form of dual agency with serious conflicts of interest now allowed in New York State.

The principal broker may designate two sales agents from within the same company- one sales agent to 'represent' the buyer, and the other to 'represent' the seller on an in-house company listing. The principal broker and the designated sales agents are dual agents and cannot provide undivided loyalty. However, under the 'recently improved' form of Dual Agency with Designated Sales Agents, each designated sales agent may now 'advocate' for their respective 'client'- an amazing conflict of interest! The designated sales agent for the buyer may negotiate for the lowest possible price, while the designated sales agent for the seller may negotiate for the highest possible price in the same transaction under the same roof. Confidentiality cannot be guaranteed as both sales agents are working within the same firm. Unbalanced representation may result, with the more experienced designated sales agent's 'client' having an advantage over a less experienced designated sales agent's 'client'. The principal broker cannot provide assistance to either designated sales agent or to their respective 'client' as he/she is a dual agent without loyalty to either buyer or seller.

Dual agency and dual agency with designated sales agents exist to maximize the financial interests of the real estate company, and do not protect or serve the interests of the buyer or the seller.

Consider this- If a better home is subsequently listed with a different company which may be better suited for you, after you have decided to buy an in-house listing, will "your" designated sales agent tell you about that property? Not likely- that sales agent is no longer loyal to you or your interests. The sales agent's loyalty now lies with his/her company in bringing the transaction to a closing.

What's the difference between an "Exclusive Buyer's Agent" and an "Exclusive Buyer's Broker"?

The principal broker is usually the owner of the company and determines the type of agency (eg.: seller's, buyer's, dual, etc.) the company operates as. The broker is responsible for the actions of their agents. An Exclusive Buyer's Agency is a company which never accepts property listings for sale and therefore never represents the interests of sellers. This ensures that the company focuses on the goals and interests of home buyers only. An exclusive buyer's agency will never compromise your level of representation with dual agency or dual agency with designated agents. The agents working at an Exclusive Buyer's Agency are considered Exclusive Buyer's Agents.

The principal broker is actually 'the agent' and company hired in an agency relationship representing the interests of their client in a fiduciary capacity. All other agents within the company are working through the principal broker's license.

The fiduciary duties owed to a client (also known as a 'principal') in an agency relationship include undivided loyalty, lawful obedience, accounting and accountability, full disclosure and discovery, confidentiality, and reasonable care and due diligence. The duties owed to an unrepresented customer in a non-agency relationship are to treat the customer honestly and to disclose known physical defects. Physical deficiencies and functional and locational defects/deficiencies by law cannot be disclosed to a customer- the customer is on his/her own to uncover these. We disclose these negative factors to our clients when known or discovered.

True agency means placing the goals and interests of the client above the agent's and anyone else's in the transaction at all times by law.

So, you fully represent my interests as a Buyer, at all times, no matter which home I want to purchase?

Yes. We say "100% Buyer Representation, 100% of the time." We have legal obligations to represent your interests at all times, on any home. This means finding the best home for our clients and negotiating for the lowest possible price at the most favorable terms. Seller's agents acting as buyer's agents can't promise that, and they cannot deliver that.

"Representation" is all about saving time and money, ensuring peace of mind, and satisfaction - YOURS!