When I first got into real estate all agents worked for the Seller. The theory at the time was that the Seller paid the commission so everyone worked for him. There was a listing agent, who has a sign in the Seller’s yard, and if there was an agent working for the Buyer, who was a sub agent of the Listing Broker. At that time agents frequently weren’t making it clear to the Buyers who represented whom. Needless to say there were some pretty substantial lawsuits over this and therefore the industry went through some changes.

Then some of the Buyers wised up and said “wait a minute! I am bringing all of the money to the table to buy this Seller’s house and I should have some representation and some imput on how my money is spent.” So the various Real Estate Commissions around the country decided that the day of everyone working for the Seller was over, and the concept of Buyer’s agency was born.

So now, in Georgia, there are generally two agents in most transactions. There is the Listing agent or the Seller’s agent and the Selling agent or the Buyer’s agent. It’s a little confusing, so we will call them the Seller’s agent and the Buyer’s agent. The way it works in the Atlanta area is that any property that is listed in either of the two big listing services, i.e. the First Multiple Listing Service and the Georgia Metro Listing Service (FMLS and GA MLS), automatically has an agreement which states that the Listing agent will share the commission with the Buyer’s agent.

So this means that you as a client of the Buyer’s agent will not have to pay your agent for representation in any listed transaction. Some Buyer’s agents will ask for a minimum fee, so if the listing agent is paying less than average (say 2-2.5%) to the Buyer’s agent, you will make up the difference, if you agree to the arrangement. Other Buyer’s agents (like me) just accept what the listing agent offers. So it is important to be clear on this when you decide to work with a Buyer’s agent.

So what does the Buyer’s agent do? Well the Buyer’s agent represents the best interests of the Buyer. They help the him through the process and can use their expertise to point out the issues that may arise during the process. There are many ways the agent can help. Here are a few:

1) Finance: Most agents should have a clear understanding of the various different loan programs and can offer guidance on what the pros and cons of each may be. They also should know some reputable lenders who deliver what they promise that they can recommend. Special programs, tax abatements, and first time home-buyer offerings can be discussed. Differences between conventional fixed, adjustable, FHA, VA, 30yr, 15yr, Rehab, construction/perm, Hard money, owner finance etc. can be pointed out.

2) Condition of the Property: Agents who have been around for awhile have normally been to hundreds of inspections and can spot problems that may arise in the inspection and can save you the expense of hiring an inspector who will charge you several hundred dollars to reject the house.

3) Recommendations… Most experienced agents can recommend lenders, repair people, inspectors, surveyors etc who do a good job at a fair price.

4) Knowledge of neighborhood values. Perhaps the most important value the buyer’s agent can bring to the transaction is the knowledge of the value of the property the Purchase is looking at. Along with the normal ways of figuring out the value of a home by comparing recent sales of similar properties in the area, there are unseen factors that influence value. Some of these items might be development projects that haven’t broken ground yet, criminal activity, nearby things (land fills, half way houses etc) that may affect value.

The main thing to understand about why you might want to work with a Buyer’s agent is that when you are loyal to the Buyer’s agent, he knows that he will get paid whenever the Purchaser finally buys, so it is not necessary for him to try to sell the Buyer every house he shows him. It’s really to the Buyer’s agent advantage to get the best deal possible for the Buyer, because a happy client will send his friends and could be a lifetime of referrals.

 For the first time in a really long time it is possible to get a home for less than you would have to pay in rent. Investors can actually get positive cash flow!

There are some restrictions on this program. As I said earlier you have to live in the home, it can’t be investment property. There are stiff penalties for people who say they are going to live in the home and then don’t. Another restriction is that this only applies to homes that HUD lists as “insured”. By insured, HUD means that the property is in good enough condition that the property can be brought up to normal decent livable and safe condition for less than $5,000.00 in repairs. If there is work needed HUD will escrow money for repairs. This is built into the purchase price and will be paid to a contractor (not the Purchaser) after the closing when the work is completed. It is listed on the HUD website and will only be paid if the purchaser gets an FHA loan.