What Do FSBO's and Dual Agency Have In Common?

What Do FSBO's and Dual Agency Have In Common?

North Carolina is one of the few states the continues to allow Dual Agency - that is basically when one agent represents both the Buyer and the Seller in one single transaction.  Dual Agency is also when two agents from one firm/brokerage represent both buyers and sellers in a single transaction.  This discussion is about Dual Agency - By Agent ONLY & FSBO's.

What do they have in common?

First, let me tell you what prompted this post: 

Recently the National Association of Realtors® published their annual Profile of Home Buyers and Sellers for 2013.  One key point that I found incredibly interesting is in the For Sale By Owner (FSBO) highlights (realtor.org/reports/):

The AVERAGE For Sale By Owner LOST over $30,000 on the sale of the home - and that is AFTER commissions were paid.**

**The average For Sale By Owner home sold for $184,000 compared to $230,000 among agent-assisted home sales.  AFTER commission, that is a 15% difference!  Are FSBO sellers not aware that the average list-to-sales price in our area is between 95 & 97%?  That's a minimum of 10% that FSBO's lost because they did not hire a real estate agent--again, AFTER commissions were PAID.

What does this have to do with BUYERS?

I receive calls at all hours of the day and night from buyers who have a question about 'MY' listing at a particular address, complex or neighborhood.  I offer the explanation that in North Carolina, we 'share' our listings - basically, other agents' listings are on my site and my listings are on theirs - sort of a handshake deal between local real estate agents. 

It never fails that I am in my car when I get these calls!  The next question from the buyer is "Do you know who the listing agent is?" 

Well, I can tell you that I know my inventory and I know it well but, I am not in front of my computer to be able to tell you who the listing agent is on this particular property.  Can I ask why you wish to speak with the listing agent?

"Well, I only want to work with the listing agent."

Hmm...Do you realize that the listing agent ALREADY has a relationship with the Seller?  We don't know if that agent is related to the Seller, neighbors of the Seller or college friends of the Seller; why on EARTH would you think that you're going to get a fair shake when working with the SELLERS' AGENT?

"Well, I've bought and sold 5 houses in my lifetime - I think I'm experienced enough to do this on my own.  I'm not going to get burned as you suggested."

I'm sorry, I'm not trying to be condescending but, I Closed on 5 homes for clients JUST LAST WEEK - our Contracts change annually (at a minimum) and believe me, you will NOT be able to negotiate a better deal than I can! Nor, are you familiar with the process as it is quite detailed.

Furthermore, the Seller already has a SIGNED CONTRACT with the listing brokerage (not the agent) that states that they agree to pay X% in commission.  Do you really think that the brokerage is going to allow them to break that Contract and pay them less in fees just because you don't have an agent? - Remember, it is a HUGE liability for one single agent to represent both parties to a transaction!

What does this have to do with FSBO's?

Now, as a Buyer, I would strongly recommend that you reconsider your choice to 'go it alone' - Compare your transaction to that of a FSBO (because that is EXACTLY the same concept). 

FSBO Sellers DO pay BUYERS' AGENT commission when they bring them a buyer (at least 95% of them do).  So, as you can see with the above statistics, we do beat them up pretty badly when it comes to negotiations! 

And, that's not all we do for you - We know our State Contracts; we know what inspectors do a thorough job and which ones don't; we know how to guide you down the road for a smooth transaction; we KNOW that TIME IS OF THE ESSENCE with our Contracts (these timeframes MUST be adhered to and if not, can cost you thousands of dollars).  We SAVE you FAR more money that you even THINK you will save by going it alone!

And to end the conversation...

"Well, you've certainly given me something to think about.  I will let you know what I decide to do."

"I thank you for your call but, can I give you just one last bit of advice?  I would love to work with you but, whatever you do, I don't care WHO you choose to represent you, just be sure you have your OWN representation!"

Don't become a Buyer with those same dreadful results as FSBO's.  Hire an agent who can effectively represent YOUR interests!  This is a very large investment you're about to make and having your own agent is critical to your home buying success.

©Debe Maxwell | www.AtHomesCharlotte.com | Charlotte Home Buyer Tips - What Do FSBO's and Dual Agency Have In Common?