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Buying Real Estate in Franklin TN
Buying real estate in Franklin TN will be the largest purchase you will ever make. You want to make sure you're protected during this transaction. The best way to do that is to hire a Buyer's Agent.
What is a Buyer's Agent?
In the late '90's real estate laws changed to protect buyers from the common-law practice of caveat emptor ("let the buyer beware"). Prior to this change, all real estate agents worked for the seller, even if, they were using an agent other than the listing agent. While sellers benefited from this arrangement, buyers began to question whether their financial interests were being protected. Buyers demanded accurate, factual information, as well as, objective advice. Their demands resulted in a change to agency law and the Buyer's Agent was born.
Can I Call the Listing Agent?
While Buyer Agency was created to protect the fiduciary interests of home buyers, many still contact the Listing Agent when purchasing a home. Primarily, because buyers think they will be able to negotiate a better price for the home if they use the Listing Agent. Actually, that is rarely the case.
The Listing Agent has been hired by the seller to represent the seller's fiduciary interests. The Listing Agent's commission is negotiated at the time the Listing Agreement is signed. It is common practice for the Listing Agent to split that negotiated commission with the Buyer's Agent. However, if the Listing Agent brings the buyer, then he receives the full commission or both sides of the deal.
Buyers mistakenly think that commission split will be passed on to them. It is not. Even worse than that, a buyer may actually pay more for a property by using the Listing Agent. Remember, the Listing Agent works for the seller. His responsibility is to get the highest sales price for the home.
Many buyers do not realize that when they sit down to write an offer using the Listing Agent, he will ask them to sign a Confirmation of Agency Status. This document is written notification to the buyer that he is about to enter into a legally binding contract without representation. Is that what you want to do when making the largest financial purchase of your life? Do you really want to be an unrepresented buyer? That's what you will be doing if you use the Listing Agent to purchase a home.
Should I Use a Buyer's Agent for New Construction?
Absolutely. Builders know and understand that the majority of their home sales come from real estate agents. They have priced their homes with this in mind. Many buyers think that when they go in without a Buyer's Agent that savings will be passed on to them. Nothing could be further from the truth. When a buyer comes in with a real estate agent, the builder/seller recognizes right away that this agent will show the buyers a lot of different housing options which means the seller/builder will have to negotiate to win the buyer's business.
Remember, the on-site agent, while friendly and knowledgeable, works for the seller. It is her job to get the best sales price for the seller. As such, anything you discuss with this agent can be used against you during the negotiation process. It is best to have the help of a Buyer's Agent so you don't diminish your negotiating power. A Buyer's Agent will be able to negotiate a better deal on a new construction home purchase often saving you tens of thousands of dollars.
What Can I Expect From a Buyer's Agent?
A Buyer's Agent will oversee every detail of the transaction so you don't have to. Here's what you can expect:
- assistance in securing a mortgage lender for pre-qualification
- researching all available homes meeting the buyer's criteria, including for sale by owners, expireds, withdrawns and pocket listings (those not on the market yet)
- contacting listing agents to secure additional information about their listings
- scheduling and showing all available properties to the buyers
- investigating comparable sales to determine a purchase price
- helping buyers determine price and terms prior to submitting an offer
- preparing offer to be submitted to the listing agent with all necessary contingencies and disclosures in place to protect the buyers
- negotiating price and terms for the buyers
- arranging and meeting with home inspectors
- explaining home inspector's findings
- negotiating repair requests on behalf of the buyers, if warranted
- meeting with an appraiser or surveyor as needed
- coordinating correspondence between lender, title company and listing agent
- reviewing final documents prior to closing
- attending closing with buyer
All of this service is provided to the buyers at no cost. The Buyer's Agent represents the buyers but he is paid by the seller's brokerage company.
While many for sale by owners will gladly pay a Buyer's Agent, you should discuss this prior to viewing a home.
The best way to insure that you are protected is to enter into a signed Buyer's Agreement with your Buyer's Agent. This is a contract between the buyer and the Buyer's Agent which clearly outlines the details of your agency relationship.
Click on the links below to become more informed about buying real estate in Franklin TN:
Benefits of Buying a Home
Things to Avoid When Buying a Home
Franklin TN Housing Market
Comparable Home Sales
Pricing Your Franklin TN Home to Sell
Making an Offer and Closing
Buying Franklin TN Real Estate? Call (615) 495-0752!