NO…but then again I was told to say that. Here are the Pros and Cons of buying a home with a Listing or Buyers agent.
Pro: Here’s the thinking.
The Listing Agent, that’s the name on the sign has listed the property for 5 or 6% commission. Traditionally they are offering 2.5% or 3% to a buyer’s agent so if you buy the home directly from the Listing Agent, they are getting a win fall, a double end as we call it in the business. So surely they can knock a percent or two off the price, from that extra commission they are earning to give you a deal. Right!
Here’s an example, on a $400,000 an agents commission might be $24,000. That’s $12,000 to the selling agent, Mr. On the sign post, and $12,000 to an agent who brings the buyer.
“So, if I buy this home from you Mr. On the sign post, you make an extra $12,000…not to bad. How about we split that, you make an extra $6,000 and sell the home to me for $394,000.” Win-Win-Win, right?
The seller still gets what they want, the same $376,000 in their pockets. You get what you want, a great home for a great price, a discounted price, and the Listing Agent gets the home sold, and an extra paycheck!
Sold! …but I wouldn’t be doing my job as a real estate educator if I didn’t point out the cons as well as the pros.
Con: Here’s what Sean Tassé, a professional buyer’s agent has to say.
The first obstacle of this process is to make sure you ARE dealing with the Listing Agent. Mrs. On the sign post may not be the agent at the open houses. Often times the agents hosting a home showing on Sunday is a buyers agent like Sean. Our office holds dozens of open houses each week, several teams will often be responsible for 4-8 open houses at a time, making the likelihood of finding the listing agent at an Open House remote.
Truth be told they are also the worse candidates to be holding the home open as it will create a conflict of interest.
The Listing Agent is working for the seller, they have a contract that states the Listing Agent is looking out for the sellers best interest, and they can not offer that same level of service to a buyer that is not under contract. Which means you get a lower level of service as a customer of a REALTOR® that as a client (they still have to act ethically and honestly).
These days many buyers are choosing to hire a buyers agent to give them Client level service rather than just Customer level service. If you’re familiar with legal terms a client is due fiduciary duties as oppose to a customer who is only owed honest and ethical treatment.
Buyers agents are also professional negotiators. They deal with listing agents on a daily basis and understand all the techniques needed to get their clients the best deals.
For Example Sean’s Clients median purchase price is 97% of the listing price and his average is 98%. He has even negotiated a deal as low as 95% of the listing price in the last year. This could represent a savings of $8,000, $12,000 or even $20,000 off the same $400,000 home from above.
So what do you think, is it more advantageous to buy from the Listing Agent or hire a Buyers Agent when buying a home?
Hope this helps you understand real estate a little better.
As always if you have any real estate questions ask them below, or contact us directly at 613-788-2113