Consider a home buyer's agent by:
ELLEN ROSEMAN - Toronto Star

Brendan and Sarah Browne recently bought their first house in Toronto. They were on a strict budget and wanted to minimize the premium they'd have to pay for a high-ratio insured mortgage.

"We'd worked with real estate agents before and felt they were wasting our time," says Brendan. "They were taking us to houses slightly outside our price range and not quite what we were looking for."

Then, they found Thomas and Sally Cook, a married couple who Are agents in Toronto's Beach area. The Cooks work only for home buyers, not for sellers. They make buyers sign a contract, agreeing to engage them exclusively.

"The Cooks sat down with us and talked about exactly what we wanted to buy, then showed us houses within our price range. We didn't feel we were being pushed into buying anything above our means," Browne says.

The couple bought an older house in the High Park area of Toronto and paid less than the asking price — hard to do during a time of frenzied bidding wars earlier this year.

Browne says he learned how to inspect a property by watching his agents. First, they made sure to check the basement, furnace and wiring, "the unsexy parts of the house."

Luc Theriault and Janet Marchak also bought a house using an exclusive buyer's agent. They're moving in later this month. "I wasn't interested in signing a contract," says Theriault. "I come from Quebec, where we have nothing like that. And I'd bought properties before without having anyone negotiate on my behalf."

But after going to a home-buying seminar, he realized he didn't have the skills needed to succeed in a tough, competitive real estate market.

"There was another bidder for our house and the game was played very tight," he says. "Without our agent, we would have missed the deal."

Traditionally, real estate agents and brokers work for the seller. Even those "representing" the buyer legally work for the seller.

This dual agency is a source of complaints in the industry. Recently, Canadian regulators set up a task force to look at fixing the problems.

"Brokers represent parties whose interests can be diametrically opposed," said the agency task force (whose report is posted online at the Real Estate Council of Ontario, http://www.reco.on.ca).

"Sellers look to their brokers to obtain the highest possible price and terms which accommodate their interests and needs.

"Buyers look to their brokers to obtain the lowest possible price and terms which accommodate their interests and needs.

"Neither sellers nor buyers look to brokers to merely mediate what the brokers personally believe to be `fair' or an `acceptable' deal between them." If brokers act as dual agents, they allow a conflict of interest to arise between the interests of sellers and those of buyers.

For example, brokers have to disclose all relevant information they have on property defects to sellers. But brokers must tell buyers only about material defects that render the property dangerous or unfit for habitation, not necessarily all defects in a property.

That's where a buyer's agent comes in handy, being free to talk about anything that can affect the buyer's interests.

This revolution in real estate sales began in 1983, with a classic study by the Federal Trade Commission in the United States. It found that 72 per cent of buyers believed the agent they worked with was representing their interests.

Almost three out of four buyers were spilling their guts, disclosing confidential information about their goals, to agents who were legally representing the seller. Most states and provinces have brought in laws requiring real estate agents to disclose who they were working for in every situation.

What if you, as a prospective buyer, say something to an agent that would compromise your bargaining position in any way? You're supposed to be told about the law right away and given a choice in how to move forward.

In 1995, the Ontario government brought in buyer representation. This means you can sign a contract with a real estate agent, who's sworn to protect your interests.

The Ontario Real Estate Association has developed a standard buyer agency agreement that brokers can use with clients. Any licenced real estate agent in Canada can legally act as a buyer's agent. You can also engage a firm that works exclusively as a buyer's agent.

"A buyer's agent should perform services for you that a seller's agent can't, such as showing you reasons not to buy a particular property," says Thomas Cook.

"A good buyer agent will include contingencies in the contract that protect you, rather than the seller as in most standard contracts, and keep confidential any information that could hurt your bargaining position."
Cook says he does a comparative market analysis (CMA) for buyers to see what a property is really worth. In a recent case, he found a property listed at $338,000 that was worth only $320,000.

"The listing agent isn't required to do a CMA for the buyer," he says. "With our CMA, we were able to convince the sellers it was the right price. The buyers saved $18,000."
As a buyer, you don't have to pay extra for an agent who represents your interests. So, why not consider signing a contract?