What a buyer’s agent will do for you when you’re looking for a new home

New York
CNN
 — 

An unprecedented $418 million settlement between the National Association of Realtors and groups of home sellers, which has yet to take effect, has left many people confused about how much they might pay in commissions in the future.

But no matter how things shake out, people will continue buying homes. And a majority of them will consider using the services of a buyer’s agent.

If you plan to be among them, here is what you should expect from any licensed buyer’s agent – legally, ethically and in terms of practical guidance – and how to choose one who best suits your needs.

Buyer’s agents essentially run point for Team You. From house hunting to closing, such agents have a fiduciary duty to represent only your needs in the home-buying process. “They should always keep a buyer’s best interests at the heart of the transaction,” said Amy Lessinger, president of RE/MAX, LLC. “They put [your] interest ahead of their own.”

That means a lot of things, including being shown homes that suit your stated needs and that are priced within the range of what you’d like to spend. That’s not to say they might not show you something above your initial stated range, but they have to be transparent about why they’re doing so. “What would be a violation [of their duty] is if they only show you homes above your budget,” Lessing said.

Having a good buyer’s agent also means having someone who is knowledgeable about the local real estate market and who has the skills and competence to negotiate with the seller’s agent on your behalf.

In addition, a helpful buyer’s agent should be able to offer a list of reputable service providers who you may need during the home buying process, from inspectors and appraisers to surveyors, contractors, real estate attorneys and others. Ideally, an agent will offer you at least two to three recommendations for any type of service provider, Lessinger said.

And experienced buyer’s agents should have a solid working knowledge of local real estate laws and rules governing renovations, landscaping, utilities and new construction along with the fees, permits and paperwork required.

For example, your agent should be able to tell you what right of way an electric utility company has on a property if a tree is near a power line. Or how much it will cost you to hook up a home to city water.

Legally and ethically, buyer’s agents have six key obligations to you.

Loyalty: They must be loyal to you and your interests. Not theirs. Not the seller’s. Nor anyone else’s in the home-buying process.

Confidentiality: They have to treat the information you share with them as confidential, including your budget and motivation to buy a home.

Disclosure: They have to disclose any pertinent information you need to make your decision about a home. That can include red flags they notice. While agents are not obligated to officially inspect a property on behalf of a buyer nor do they have to be home repair experts, Lessinger said, working with a seasoned buyer’s agent who can spot potential problems (e.g., mold or water damage) and who knows what it might take to fix them can help you better assess whether a home is right for you and how much you’re willing to spend.

Reasonable care and diligence: A good buyer’s agent brings a lot of skills and knowledge to the table, from knowing about local market trends to finding comparable properties and writing offers, to offering sound guidance and generally making the home-buying experience as hassle-free for you as possible.

Obedience: While they can make recommendations, a buyer’s agent must follow your instructions, assuming you’re not asking them to do anything illegal.

Accountability: A buyer’s agent has to keep good records and proof of any monies you give them (e.g., a cashier’s check for earnest money or money to pay a home inspector).

Agents’ legal and ethical…