For most of us, buying a house is one of the most important and stressful decisions that we'll ever have to make. It's so important that psychologists caution us not to buy a house at the same time as we undertake one of life's other big challenges -- getting married or changing jobs! And, of course, buying a house is very important from a monetary standpoint as well. Financial planners tell us that -- at retirement --the equity in a primary residence represents more than half the value of the average individual's portfolio.

The traditional broker.

The wonder then is that most of us entrust one of the biggest decisions we'll ever make to someone who doesn't have our interests at heart! For that's exactly what we do when we use a traditional real estate broker to guide us in the business of buying a house. The traditonal or seller's broker is obligated by contract with the seller and so by law to sell you a house at the highest price he or she can. And because the traditional broker is a listing broker, it's in his best interests to sell you a house that is listed with his agency, whether it's the right house for you or not.

Traditional broker works for the "house".
"Okay," you say, "but how is that so different from what happens when I buy a car or any other big-ticket item? Aren't salespeople always working for the 'house' and don't they always push what's in stock?" Of course, but in buying cars, boats, furniture, appliances, etc. you and I have a lot of practice dealing with the seller and lots of reliable resources available to help us make good buying decisions. In effect, in most consumer purchases we act as our own "buyer's" agent, and most of us make a pretty good job of it.

You wind up working against yourself!
Buying a house, because of the complexity of the process and because we don't usually do it more than a few times in our lives, is more accurately compared to trying to settle a law-suit. Most of us wouldn't think of acting as our own attorney -- we just don't know enough. And nobody would trust our opponent's attorney to give us good advice. But in buying a house that's just what most of us do: act as our own agent, taking advice and counsel from the seller's broker!

Seller's broker for sellers; buyer's broker for buyers.
Which is not to say that there's anything inherently wrong with the traditional or seller's broker. In fact, we think if you want to sell your house you'd be well-advised to place it with a real estate agent who is committed to showing your house every time he can, who can list it for you with cooperating agents, who can hold open house and use his training in salesmanship to handle your prospects professionally, and above all who is committed, as you are, to getting the best price for your house. That's the smart thing to do if you want to sell your house. If you want to buy a house, the smart thing to do is to engage a buyer's broker.

Buyer's broker

Only a buyer's broker will show you all the houses that meet your criteria, listed or not, and tell you up front when a house is not right for you. Only a buyer's broker will keep what he knows about you in confidence, passing to the seller only the information that you and he think will benefit your bargaining position. Only a buyer's broker will research the market, the seller and the property and use that research to help you prepare a buying strategy optimized for your needs, terms, and price. And while a buyer's broker is peforming all these valuable services exclusively for you, he's doing one more thing -- ensuring that your house will probably cost less than if you used a traditional broker, and certainly not more.

How brokers' commissions work.
To understand how the buyer's agent can get you the house you want at the lowest price possible, and still make a living without charging you a separate sales fee, consider this. The sales commission on a house really consists of two commissions, one going to the agent who gets the seller to list the house, the other going to the agent who gets the buyer to purchase the house.

Two commissions; one or two agents.
Sometimes the two agents are one in the same. Occasionally -- in so-called dual agency transactions -- two agents are involved who both work for the same brokerage. In this case, although one is assigned to "work with the buyer", both are in fact committed to the seller by contract. Most frequently the commission is split between two agents, working in two different real estate firms, one that listed the house, and one that actually sells it, but again both are committed by law to the seller.

When you elect to purchase a house using a buyer's broker, the agent that got the listing gets his half of the commission as usual, and the other half pays for the work done on your behalf by the buyer's broker. So using a buyer's broker doesn't cost you any more in commissions, but overall is likely to cost you less since buyer's brokers -- like BALCH BUYER'S REALTY -- are committed to helping you buy the house you want for the price that's best for you!

Why don't all buyers use buyer's brokers?
The mystery is not how using a buyer's broker can save you money and get you the best terms, but why anyone would use any other kind of broker.

Why doesn't every house buyer use a buyer's agent?

• Because the traditional seller's agent is not about to recommend an agent who will actively work to reduce the final price of the house;
• Because buyer's agents are a relatively new class of agent and some people just don't know they exist;
• And because people are still learning what it is that makes a buyer's agent the right way to buy a house.

If you compare the services provided to a house buyer by seller's versus buyer's agents and check out what the most prestigious publications say about buyer's agents, you'll see the benefits for yourself. If you can find a single reason to buy a house from a traditional broker who isn't related to you, let us know!