Imagine, if you will: A house you love just came on the market. You might want to make an offer: should you go through the “listing agent” or find your buyer representative? Your sister (an attorney) tells you to go through a separate agent. Your boss (the savvy real estate investor) recommends going through the listing agent.
What do you do now?
When a seller lists a home, they sign up with a broker to be their agent to represent them in the sale. This brokerage, referred to as the “listing agent”, has a fiduciary duty to look out after and act in the best interest of the seller. Now, if the buyer has their agent, then the buyer’s agent has the same fiduciary duty to the buyer.
If the same agent represents both buyer and seller then you have what is called “dual agency”. This may change the nature of the business relationship.
So, the question is: should you buy through the listing agent?
It depends. Some savvy buyers go through the listing agent, while others insist on buyer representation. Both are valid. You must understand how it all works and some of the pros and cons so that you choose what is in your best interest.
Here are some advantages of going through the listing agent:
- The listing agent knows the property better than an outside buyer’s agent.
- The listing agent will know the seller’s scenario better than an outside buyer’s agent.
- Sometimes, there is less commission paid by the seller when there is only one agent involved.
Here are some advantages of going through a buyer’s agent:
- The buyer’s agent knows the buyer and their needs better than the listing agent will.
- If a property or a situation is not right, a buyer’s agent can just take you to another property.
- A buyer’s agent represents only the buyer so they may tend to represent the buyer stronger.
- You don’t have to pay the buyer’s agent directly so you might as well get the “free” help.
Here are 10 tips to help you determine what is best for you in your situation:
- Use a knowledgeable agent you like and trust. They will advise and represent you.
- If you haven’t settled on an agent, feel free to try a few until you find a good fit.
- If you have an agent you like, stick with them if they have been doing a good job.
- Don’t engage the services of too many agents. Too many agents will drive you nuts. Plus, they may perceive you’re not loyal, and you will not get anyone’s best efforts.
- Consider going through the listing agent. It often works great. Plus, it may be a better way to meet an agent to represent you for other properties.
- Please be aware that it is difficult for many agents to represent both parties well when using the listing agent, make sure by verifying that they are comfortable and experienced with dual agency.
- Don’t make it about a commission as the focus should be on your needs, not the agent’s compensation. This is true for both client and agent.
- Don’t let the listing agent think they will be representing you when you have no intention of having them represent you.
- Make sure it is understood upfront if the agent will be representing you in the purchase. If you are unsure that is fine, just be clear in your communication.
- If there is something about the process you don’t understand, ask.
We know that this might be a lot. Here at the Mike Dunfee Group, we are here to help every step of the way.
Dunfee Real Estate Services
DRE # 02026232
