Collins: Why buyer representation matters

In today’s competitive housing market, you need all the help you can get.

Low inventory, decreased affordability and a challenging lending environment all add to the complexity of purchasing a home. Each transaction should have two professional realtors representing their clients’ best interests. The seller should retain the services of a realtor, but so should the buyer. It is the buyer representative that I want to focus on in today’s column.

I have heard homebuyers say they do not need buyer representation because they can find a home on their own using the internet. This is partially true. Gone are the days of a realtor driving you from one open house to the next, but researching a listing is just an exceedingly small part of what a buyer representative does.

“Good buyer representation is a tactical advantage when purchasing a home. A skilled realtor goes beyond house showings, they deliver value through their expertise, adept negotiation skills and unwavering devotion to the buyer’s best interests,” says William Chea, 2023 president of the Santa Clara County Association of Realtors.

When choosing who to work with, do your research. Ask the trusted people in your life if they have someone they would recommend and why they would recommend that individual. Look them up online to gain some additional insight before you agree to meet with them.

A skilled realtor will be prepared to share their value with you. During your initial presentation, they should get to know exactly what your wants and needs are. They can advise you on whether your desires are consistent with your budget. It is important to set clear expectations up front, including how your realtor is to receive compensation for their work. The best way to communicate the business relationship between yourself and your realtor is through a buyer representation agreement.

Once the buyer representation agreement is signed, it’s time to get to work. Expect your realtor to explain the timeline for house hunting, mortgage approval and closing. They will go over state and federal Fair Housing laws as well. They may provide you with lending resources so you can begin your home purchasing journey pre-approved, which is necessary in this hyper-competitive market. They will go over the available inventory that meets your specific criteria. It is also critical that you know how fast inventory is moving in the markets in which you are interested. It will help you make a competitive offer when the opportunity arises.

Now that you have financing secured, market trend comprehension and understand what is involved in the home-buying process, you should start to look at properties. Expect your realtor to set up automated email alerts through their local MLS marketplace so that you are immediately notified when properties that fit your requirements first come onto the market. Do your best not to fall in love with every house.

Your realtor may provide you with a tool to track what you like and do not like about each property. This is one of the most important purchases of your life, so be systematic in your approach and lean into the expertise of your realtor. Your realtor is not only an expert in the marketplace, but many have longstanding relationships with the listing representative. These relationships can prove invaluable when you find yourself in a multiple-offer situation. People do business with those they know, like and trust.

You found a property that you like. It fits your budget and you are ready to make an offer. So, what is next?

Your realtor will collaborate with you to put forth the most competitive offer you can. It is important to review the inspection reports with your realtor so you have a full understanding of the state of the property you are about to make an offer on. You need to discuss contingencies. For instance, your offer may be contingent on the sale of your existing home. You may be able to ask for certain incentives as well, such as repairs or credits. Your realtor will guide you through the entire process.

In the end, what you offer is your decision, but do not discount the counsel of your professional representative. Once all the terms and conditions have been agreed upon your realtor will draft an offer on your behalf. Be prepared for all scenarios including counters or multiple offers.

Your realtor is constantly advocating for you throughout the entire home-buying purchase. They will gather all the required forms and documents for closing, confirm the closing date and time and notify parties if there are changes. They will also carefully review closing figures with you to ensure accuracy, checking all insurance, tax, homeowners’ association dues, utilities and applicable prorations, if relevant. It’s critical that you understand the risks of wire fraud and verify all wiring instructions before transferring funds.

“The relationship doesn’t stop when you hand your client their keys,” Michelle Perry of Coldwell Banker said. “It continues even after the closing. A realtor is there to answer questions and to be a long-term resource to their client. New homeowners have lots of questions. I want to make sure they have all the resources they need to turn their house into a home.”

This column touches on a small portion of all that a buyer’s representative does for their client. Karl Lee, a broker associate from Compass, adds that buyers face a myriad of decisions throughout the process.

“Realtors help their buyers understand and evaluate the risks and rewards of those decisions,” Lee said. “Our responsibilities include helping buyers evaluate a home’s fit (including reviewing hundreds of pages of advisories, disclosures and reports), advise and negotiate contract terms, navigate through a web of contractual commitments, and keep everyone involved (lenders, escrow, inspectors, etc.) on track. I find that most buyers, by the end of their home-buying journey, truly understand that searching for homes is the least important part of what we do for them.”

San José Spotlight columnist Neil Collins is CEO of the Santa Clara County Association of REALTORS, a trade association representing more than 6,000 real estate professionals in Santa Clara County and surrounding areas. His column appears every fourth Thursday of the month. Contact Neil at [email protected] or follow @neilvcollins on X, formerly known as Twitter.