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Debunking the Myth: You Will Not Save Money By Not Using a Buyers Agent

By
Real Estate Agent with Buyers Brokers Only LLC - www.BuyersBrokersOnly.com MA Broker Lic 148149

Debunking the Myth: You Will Not Save Money By Not Using a Buyers Agent

Over the past couple of weeks, I have seen several blog posts and news reports about home buyers, who seem to think they will save money by not using a buyers agent.  It is a myth and I thought it was time to set the record straight.

The Commission Is Not Dependent on the  Number of Agents Involved.  (Or, Price is Not Determined by Commission.)  Listing Agents reach an agreement with their clients - the Sellers - as to how much commission is to be earned upon the sale of the home.  It is negotiated between them and is part of the Listing Agreement.  The Listing Agent usually then determines how much he/she is going to offer a Buyers Agent for bringing a buyer to the table.  If the Listing Agent procures the buyer him/herself, the total commission is the same - he/she just does not have to split it with another agent.  It has no impact on the Seller's proceeds or home price.

A Listing Agent will not (and should not) negotiate on behalf of a Buyer.  The Listing Agent owes a fidcuiary duty to the Seller.  Period.  Their job is to get the highest possible price for their client - the Seller.   A Buyers Agent's fiduciary duty runs to the Buyer.  Their job is to get the lowest possible price for their client - the Buyer.  Dual Agency - representing both parties - is allowed in certain states (like Massachusetts) upon disclosure.  But really, would you trust anyone to represent both sides of the same transaction? It's a conflict of interest.

Most Buyers Agents Charge Nothing to their Buyer Clients.  There is a misconception that it costs money to use a Buyers Agent.  While some do charge a fee, many (like myself) do not.  We get paid upon the sale of the home by whatever commission split the Listing Agent is offering. 

Hidden Costs of Not Using a Buyers Agent.  Buyer agents are more than door openers.  Besides showing you the property, a buyers agent will assess the home, along with its location and price and will point out potential problems to you that you may not see.  A buyers agent will look at sold comparables to help determine an appropriate offer price and neogtiating strategy.  And, buyers agents are with you along the way to help you meet deadlines and negotiating the rest of the process - home inspections, repairs, financing contingencies, etc.  For a complete list of services provided by a buyers agent, see my earlier post about What to Expect from Your Buyers AgentWithout someone to guide you and advocate for you throughout the process, you could miss dates and deadlines that could end up costing you money. 

As a fellow buyer agent once said, you would not get divorced and use the same attorney as your spouse, why would you buy a house and use the same agent as the Seller?

For Exclusive Buyer Representation in Canton MA, Milton MA, Sharon MA and surrounding Norfolk County communities, contact your Canton MA Buyer Agent.  It will cost you nothing and could save you thousands.

 

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Comments (61)

Bill Gillhespy
16 Sunview Blvd - Fort Myers Beach, FL
Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos

Hi Christine,  Your very well written post highlights some common public misconceptions about our industry.  Still need a lot of education before the buying public will get this one straight.  Well done !

Jun 11, 2011 07:26 AM
Eric Michael
Remerica Integrity, Realtors®, Northville, MI - Livonia, MI
Metro Detroit Real Estate Professional 734.564.1519

This was a brilliant blog, Christine. I wish there was a way to make all buyers understand this!

Jun 11, 2011 08:53 AM
Christine Koch
eXp Realty - San Antonio, TX
Realtor - eXp Realty San Antonio TX

Christine, many first time and inexperienced  homebuyers do not understand how agents get paid.  I make a point to have a quick talk with them the first time we meet about how I get paid. This is a great way to make them comfortable about working together.

Jun 11, 2011 09:38 AM
Curt Baumgarth
Mesa, AZ
inactive

Great post Christing and congrats on being featured.  Always good to try to straighten out some of the misconceptions in this industry.

Jun 11, 2011 09:39 AM
Christine Smith
Buyers Brokers Only LLC - www.BuyersBrokersOnly.com - Canton, MA
Exclusive Buyer Agent & Attorney, Canton, MA

Thank you for the comments! Sorry for my delayed response....busy day today!

Laura....thank you very much for the kind words!

Dawn....hopefully the more we write & talk about it, the more all will understand.

Charita....I'm not sure where they get the notion.  As for dual agency, while I don't think it is in either party's best interests, as long as it is fully disclosed & understood then it is okay.  I'm not sure how many agents and buyers/sellers completely understand it.  (Although, I am quite certain that you do!)

Carolyn....excellent point....I forgot about the other end of things.

Joy...thank you!  Share away!

Stephanie...thanks for the comment.

Carla....I will look forward to reading it!  I agree with you 100% on the commissions too.

Maggie...thank you very much.

John....you are right....it's nothing like shopping for cars!

Joan....compensation does vary from state to state and even from agent to agent.  But you are right, there are so many other savings & benefits.

Praful....I would imagine it might be "easy" in a situation with "easy" buyers and "easy" sellers.  If disputes arive, however, I'm not sure how "easy" it ends up being.

Kimberly....I don't get it either.  We all just need to educate, educate, educate.

Virginia....it really is a waste of time. Pick an agent & work with him or her!

Ruthmarie.....it is a sad commentary.  I have to say that most, if not all, the buyers I work with are great clients.  They realize the benefits of having someone advocate for them & that is why they sought me out.  The others, it is just their loss.

Christine.....thanks.  Hopefully some will get the message.

Philip....yes, I read your recent blog & a couple of others on this same topic. It's not all about the money....there is value in all of the other services we provide.

Brian....good to know that others are out there talking about it.

Lanre....thanks!  I thought the title was too long but couldn't think of something else!

Pamela....and if your agent can't negotiate price, how does a buyer think that saves money....

Lorraine/Loretta....it is sad when greed gets in the way of either side.

Tim....we all need to keep getting the word out so that more consumers are aware.

Ellen....it surprises me as well. 

Gabe...we just need to keep saying it over & over I guess!

Richie...thanks!

Susan....it is out there everywhere...outside blog, facebook, twitter, trulia....hopefully it gets read!

Rosalie....I think it was yours that may have inspired me to write this!

QuickFreeMLS....thanks for the comment!

Bill....thank you!

Eric....I'm not sure we'll reach all of them but hopefully some of them.

 

 

Jun 11, 2011 09:42 AM
Christine Smith
Buyers Brokers Only LLC - www.BuyersBrokersOnly.com - Canton, MA
Exclusive Buyer Agent & Attorney, Canton, MA

Christi....I always talk about it in my initial conversations too.  It is so important.

Curt....thank you!

Jun 11, 2011 09:54 AM
Christine Smith
Buyers Brokers Only LLC - www.BuyersBrokersOnly.com - Canton, MA
Exclusive Buyer Agent & Attorney, Canton, MA

Erica....I know it does vary greatly from agent to agent.  So far, I have not been burned by "lookers".  But, fee or not, the benefits outweigh the risk of not having your own representation.

Jun 11, 2011 12:46 PM
Liz and Bill Spear
Transaction Alliance 513.520.5305 www.LizTour.com - Mason, OH
Transaction Alliance Cincinnati & Dayton suburbs

Christine, 7 reblogs?? (so far!).  You hit a home run with this one!

Jun 11, 2011 01:44 PM
Ralph Janisch ABR CRS Broker
Janisch & Co. - Conroe, TX
Selling Northwest Houston to good people like you!

Suggested and re-blogged!  Any time we can get information out to help the public understand how things work we need to do it.  Thanks for a great article!

Jun 11, 2011 01:58 PM
Christine Smith
Buyers Brokers Only LLC - www.BuyersBrokersOnly.com - Canton, MA
Exclusive Buyer Agent & Attorney, Canton, MA

Bliz....thanks! You just never know which ones will strike a chord.  There were so many others on this topic that I was inspired to add my own two cents! (And it is now 8.)

Jeanne & Ralph...thank you for the re-blog! 

Jun 11, 2011 02:36 PM
Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

Christine... late to the party... but this was a very good read and more consumers need to understand how it all works when it comes to realtors... thanks

jeff belonger

Jun 12, 2011 04:25 AM
Christine Smith
Buyers Brokers Only LLC - www.BuyersBrokersOnly.com - Canton, MA
Exclusive Buyer Agent & Attorney, Canton, MA

Thank you Jeff!  Better late than never!

Jun 12, 2011 05:14 AM
Melissa Brown
Helen Adams Realty - Charlotte, NC
Realtor - South Charlotte NC Homes for Sale

Great post Christine, and definitely worth a re-blog!!!  There is much confusion out there about buyer agents!

Jun 12, 2011 07:25 AM
Kathy Schowe
California Lifestyle Realty - La Quinta, CA
La Quinta, California 760-333-8886

Great post... I found it through a re-blog.  There are many misconceptions on this topic, and you are right on!  Thank you!  Kathy

Jun 12, 2011 07:31 AM
Ken and Leslye Huebsch
3x Individual Agent of the Year, Luxury Homes, First-Time Buyers, Residential Resales, New Construction - Harrisburg, PA
Realtors - Harrisburg Homes for Sale 717.514.1793

Excellent, excellent content! Well-done on putting into words what most have stressed over from time to time, I'm sure!

Jun 12, 2011 07:36 AM
Lynn B. Friedman CRS Atlanta, GA 404-617-6375
Atlanta Homes ODAT Realty - Love our Great City - Love our Clients! Buckhead - Midtown - Westside - Atlanta, GA
Concierge Service for Our Atlanta Sellers & Buyers

Dear Christine -
Great explanation and timely. 
As per Ruthmarie Hicks (#27), it seems that a general level of courtesy and understanding others is needed.
Have a happy day -
Lynn

Jun 12, 2011 11:16 AM
Christine Smith
Buyers Brokers Only LLC - www.BuyersBrokersOnly.com - Canton, MA
Exclusive Buyer Agent & Attorney, Canton, MA

Melissa...thank you  & thanks for the re-blog!

Kathy...thank you for coming back & commenting on the original post. 

Ken & Leslye...if we say it often enough, maybe it will get through!

Lynn..I think we can all benefit from more courtesy and understanding.

Jun 12, 2011 03:01 PM
Christine Smith
Buyers Brokers Only LLC - www.BuyersBrokersOnly.com - Canton, MA
Exclusive Buyer Agent & Attorney, Canton, MA
Thank you for the input. In retrospect, it probably could have been worded better. It was in response to many articles with the theme of "if I don't use a buyer agent I will get a better deal" so I was using the same wording. I don't consider it a double negative since the "nots" were not referencing the same word. My apologies for the confusion, although none of the prior readers were confused.
Jun 13, 2011 12:37 PM
Karen Baker
Sunset Beach and Beyond Realty - Sunset Beach, NC
Professional Help with Rapid Responses...

Christine ~ Myth debunked and a reblog for sure, well deserved feature ~ Buyers, be aware using a buyers agent can be to your best interests as we represent you and look out for your best interests ONLY!!!

Jun 20, 2011 04:12 PM
Christine Smith
Buyers Brokers Only LLC - www.BuyersBrokersOnly.com - Canton, MA
Exclusive Buyer Agent & Attorney, Canton, MA

Frank & Karen....thank you - we need to get that message across!

Jun 21, 2011 01:01 AM