If you see a home in Los Angeles that you absolutely must own, you’re likely not alone in that thought. The LA housing market is intensely competitive. It’s why making an offer on a home without competition is exceedingly rare. And that competition increases as you hunt through the most coveted neighborhoods and the most attractive price ranges. It directly relates to the buyer’s agreement becoming an industry standard. As a hopeful homebuyer, you may be wondering how much a buyer’s agreement is actually worth once the competition intensifies.
What a Buyer’s Agreement Does (and Does NOT) Do
For those unfamiliar, a buyer’s agreement is a document used to clearly outline the expectations and professional relationship between a prospective home buyer and their representing real estate agent. This means clarifying the scope of representation, the terms of agreement, and the details of compensation for the buyer’s agent. In a scenario in which a home is attracting multiple offers, a buyer’s agreement does not hinder the buyer’s ability to compete. It does, however, define how the buyer’s agent can advocate for their client in a high-stakes situation with multiple offers.
Multiple offer situations in a city like LA may seem complex, but they also tend to accelerate transactions. Typical listing agent responses include establishing tight deadlines, demanding upfront proof of funds or loan approval, and prioritizing offers that are clean, professional, and well-organized. By having a buyer’s agreement already in place, buyers’ agents can act immediately in such situations, rather than give valuable ground to communication delays. The formal document authorizes the buyer’s agent to communicate directly with the listing agent, request disclosures without delay, and help construct an offer that pivots beautifully to the seller’s unique needs.
The Buyer is Still in Control
Some prospective buyers fear that signing a buyer’s agreement obligates them to submit offers on every home that catches their interest. This isn’t how a buyer’s agreement works. Rather, buyers continue to enjoy full control over whether to pursue a property and how aggressively to do it. Again, the primary point of a buyer’s agreement is to establish the buyer’s agent as a professional representing the buyer’s decisions, which, yes, can extend to highly competitive scenarios. But setting offer prices, contingencies, and terms? Those aren’t in the buyer’s agreement’s purview.
Of course, in a multiple offer situation, price is just one of the factors of the deal. A buyer’s agent may advise on other influences to an offer’s success, including contingency deadlines, deal structures, closing flexibility, and clear documentation – all of which can make an offer more attractive. The buyer’s agreement provides helpful guidelines to this counsel, while re-emphasizing the buyer’s agent’s loyalty to the buyer’s best interests.
Mobility, Clarity, Versatility, and Reliability in Multi-Offer Situations
In the event that the stiff competition leads to heightened emotions, a buyer’s agreement can help keep confusion to a minimum. The signed agreement anchors action with expectation when it comes to communications, strategies, and decision-making responsibilities. By signing this document, buyers know that an agent is required to act in their best interests, and agents know that they are empowered to act within the guidelines of a buyer’s instructions.
Due to their role in promoting simple transparency, buyers’ agreements are typically embraced in competitive markets. Sellers and their agents are used to working with represented buyers. Often, they see a buyer-agent agreement as a sign of professionalism and reliability. And that can make all the difference in a situation in which the two top offers are closely matched.
Structuring the Deal
A buyer’s agreement won’t radically change the competitive nature of LA’s real estate market. But in providing structure, it also allows buyers and their agents a steady position from which to act quickly when opportunities arise, communicate more effectively, and work closely to hammer out the most competitive offer. In a market where the structure of a deal can be as important as its substance, a little clarity goes a long way!
With a brand that says as much as JohnHart’s, Senior Copywriter Seth Styles never finds himself at a loss for words. Responsible for maintaining the voice of the company, he spends each day drafting marketing materials, blogs, bios, and agent resources that speak from the company’s collective mind and Hart… errr, heart.
Having spent over a decade in creative roles across a variety of industries, Seth brings with him vast experience in SEO practices, digital marketing, and all manner of professional writing with particular strength in blogging, content creation, and brand building. Gratitude, passion, and sincerity remain core tenets of his unwavering work ethic. The landscape of the industry changes daily, paralleling JohnHart’s efforts to {re}define real estate, but Seth works to maintain the company’s consistent message while offering both agents and clients a new echelon of service.
When not preserving the JohnHart essence in stirring copy, Seth puts his efforts into writing and illustrating an ongoing series entitled The Death of Romance. In addition, he adores spending quality time with his girlfriend and Romeo (his long-haired chihuahua mix), watching ‘70s and ‘80s horror movies, and reading (with a particular penchant for Victorian horror novels and authors Yukio Mishima and Bret Easton Ellis). He also occasionally records music as the vocalist and songwriter for his glam rock band, Peppermint Pumpkin.
