Many buyers, particularly first time buyers seem to have the “I want to go it alone” mind set. As an agent who works a great deal with first-time homeowners, I have to ask why? Since the seller pays the buyer’s agent, the service is essentially free to buyers.
Most buyers fail to wrap their arms around representation issues. Buyer’s agents are not paid high fees to search the MLS and unlock doors. That may be the way the public PERCEIVES it, but that is not really what we do. We are certainly there to help the buyer find a home, but beyond that we are there to represent them during negotiations, coordinate little things such as inspections, appraisals, walk-throughs, and the myriad issues that can rear their heads during the contract period. The hard work starts AFTER the home is found, not before.
This is the single largest financial transaction that people make. Do you really want to enter into such a transaction unrepresented? Let me make this point crystal clear: Unless you have a buyer’s agent representing you in your home purchase, you will be unrepresented during the negotiation process. Further, chances are, you are up against a pro who has a fiduciary obligation to represent their client – the seller.
Many feel that they can “save a bundle” by dealing directly with the listing agent. They have visions of saving a nice fat 3%. Buyers might save a few dollars, but it certainly won’t be any 3%. Furthermore, the lower the purchase price, the less likely the listing agent will be to slash commissions. Although the public seems transfixed on high-end commissions, one of the dirty secrets of real estate is that at lower price ranges, profit margins are very, very tight – they can even be negative.
When an agent takes on dual representation, they are doubling their work load while increasing their liability – there is no way they are going to work for half price. Many (myself included) won’t double-end a deal because of the potential conflicts of interest and because it is really in no one’s best interest that I do so. If a buyer walks into an open house of mine and wants to purchase my listing, I will find another agent to represent them and their interests while I fulfill my obligations to the seller.
For all of the above reasons, the savings buyers are hoping to reap are not likely to be significant in the scheme of things. So the vital question is this: Is taking the risk of going unrepresented worth saving a few hundred dollars? In my opinion the answer is NO WAY!
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