There’s a popular myth among homebuyers, especially first-timers, that the way to get the best deal on a home is to work directly with the listing agent. They figure that by reducing the number of agents involved in the transaction, they’ll be able to negotiate a
lower price because the seller only has to compensate one agent. Right?
No. Not right. The reality is, the listing agent is the seller’s agent, not the buyer’s agent. There’s a big difference between the two. The listing agent signs and seller sign a disclosure detailing her fiduciary responsibilities to the seller. In other words, her job is to get the best price possible for her client — the seller — in the shortest amount of time. Her loyalties do not lie with you, the buyer.
Another way to look at it is this way: Would you want an attorney to represent you if she were also bringing charges against you? That would be a conflict of interest.
Well, the seller and the buyer of a house represent competing interests, too. That’s a distinction one can overlook in the desire to get the best price for a transaction. Working with the listing agent directly presents a conflict of interest for the agent and leads to a significant disadvantage for the buyer, who remains unrepresented. So, by not being represented by a buyer’s agent, you could be making a costly mistake.
If you call the listing agent, he might ask you if you are represented by an agent. In some cases, he will, offer to represent both sides—serving as a “dual agent.” Buyers sometimes choose this option, foregoing independent representation to work with a dual agent.
This is accomplished with an agreement signed by both parties, which acknowledges that the dual agent will not be able to provide the full range of fiduciary duties to both buyer and seller. In other words, he can’t be fully loyal to either the buyer or the seller.
If an agent represents both sides, that agent takes home the entire commission. Where’s the motivation to negotiate a lower price for you?
A dual agent is supposed to remain neutral: offering information when asked. But such an agent really serves as a transaction facilitator, not an advocate working on your best interests.
If you would never consider representing yourself in a legal action as your own attorney, then apply the same standard towards a real estate transaction. A buyer’s agent works exclusively for the individual or family seeking to buy a house, and represents their interests during the search, the offer, negotiations, contract, and closing. Because the seller compensates the buyer agent at the closing, there is no fee involved in hiring one.
In addition, good buyer agents offer you critical services including advocacy, information, and negotiation on your behalf.
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Let Fiona help you sell or find your dream home. Contact Fiona at 914-414-5147 or email her directly.