THINKING OF GOING IT ALONE?
When I hear a buyer say they want to purchase a property without an agent because they want to “save money by not paying a commission”, it gives me pause. Clearly, the role of the agent and real estate agency relationships are confusing to someone not actively engaged in the business. Real estate commissions may be one of the least understood aspects to buying or selling a home, especially for a Buyer.
It is the
who pays the commission, not the Buyer. The commission is determined between the Seller and his/her broker's agent (the “Listing Agent”) at the time the listing agreement is executed when the Seller agrees to have this fee extracted from his/her net proceeds. The Listing Agent, bound by MLS rules, must "co-op" or share this commission with the agent who represents the Buyer of the property (the “Selling Agent”). Each agent has a fiduciary duty to their client preventing them from disclosing confidential information about their client amongst one another. Clients expect their agents to be honest and ethical, as I expect my clients to be with me.
When a Buyer decides he or she wants to forego representation to “save money by not paying a commission”, the Listing Agent now “double-ends” the transaction and receives
his/her commission as well as the Selling Agents’ portion of that commission.
There is no money being saved.
By foregoing representation, the Buyer is allowing the Listing Agent to control the entire transaction in which he/she has been retained to represent the Seller. The Buyer is now left unprotected in what will most likely be the costliest purchase he or she will ever make.
Working with an agent costs a Buyer nothing but going it alone could wind-up costing you significantly. You would not consider representing yourself in a legal matter, nor should you attempt to do so in a real estate transaction. Be smart. Work with a Realtor®; better yet, work with me.