Let the seller beware for a change Now the buyer has an agent

August 12, 1993|By Amy L. Miller | Amy L. Miller,Staff Writer

Jeanne Sandruck-Fahey thought she understood real estate transactions. After all, she and her husband, Jed, had purchased seven properties over the past nine years.

But when the couple took a real estate course in 1991 to assist in the purchase of their Eldersburg home, Ms. Sandruck-Fahey learned that all of "her" agents had actually represented the seller.

"I was a little naive about how the transactions happened," admitted Ms. Sandruck-Fahey, who is now a real estate agent for a buyers' agency.

"I prefer the act of being opinionated and dealing in behalf of the buyer."

Ms. Sandruck-Fahey said the traditional real estate process -- where both real estate agents represent the seller -- is often confusing for homebuyers.

"We do have a disclosure law for traditional agents to spell out who they are working for," she said. "But I'm not sure people understand in all circumstances."

She said her company -- Homebuyer Advocacy Group Inc., in Columbia -- provides an alternative. Ms. Sandruck-Fahey, who works out of her home, is the buyer's agent representing Carroll.

"We've been educating the public that there is an agent available as a resource," she said. "They feel more secure that there's someone on their side negotiating for the best terms."

As a buyer's agent, Ms. Sandruck-Fahey said, she can be honest with a client who asks whether she thinks a property is worth the asking price. Also, she is not obligated to reveal confidential buyer information to the seller.

For example, if a traditional agent overhears a couple say they will offer $90,000 for a house but are willing to go as high as $95,000, she is obligated to tell the seller, Ms. Sandruck-Fahey said.

"I don't know how many times that actually happens," she said. "But, technically, it's supposed to."

Ms. Sandruck-Fahey said the training of a buyer's agent is the same as that for any other real estate agent. And they use the same multiple lists to serve their clients.

"I went to the same school and took the same test," she said. "I just decided that I wanted to represent the buyer." Contract terms vary between buyers' agencies, Ms. Sandruck-Fahey said. At Homeowner Advocacy, the client pays a $200 retainer fee and signs a contract that usually gives the agency 80 percent of the commission.

"[The fee] eliminates people who are window-shopping," Ms. Sandruck-Fahey said. "The people are serious and will deal with someone who will negotiate in their best interest."

A $100,000 house would usually have a 6 percent commission, or $6,000, to be split between the buyers' and sellers' agents, said Ms. Sandruck-Fahey. The home buyer would receive $600 of the commission, minus the $200 retaining fee. "The buyer still walks away with $400," Ms. Sandruck-Fahey said. "They end up with some money and someone who will represent them."

In a traditional sale, the buyers' agent would keep the entire $3,000, she said.

The contract, often for 60 days, also spells out the buyer/agent relationship, Ms. Sandruck-Fahey said.

"It says I work for them in their best interest and that time is of the essence," she said. "I won't sit on my laurels and wait for something to happen just because I have a contract.

"I will negotiate the best terms as far as rate and price."

A recent phenomenon on the East Coast, buyers' agencies are widely recognized in California and Hawaii, Ms. Sandruck-Fahey said.

"The concept has been traveling east," she said, adding that her company has been successful simply working with referrals, not advertising.

Most buyers' agencies are independent of the larger, traditional real estate firms, Ms. Sandruck-Fahey said. But that situation won't last forever, she said.

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