Buyer agency is a sham! Until your buyer client pays you directly it is a sham. Why would any intelligent person want to be in negotiations and have their negotiator be paid by the opposition. Would you want your quarterback or pitcher paid by the other team? Of course not, but everyday consumers are allowing themselves to be represented by someone who is paid by the other side.
Would it make a difference if the buyer paid the agent directly. Of course, for one the agent is going to have to make sure they evaluate what services they are offering and why they are valuable and what value they have and how they want to be paid.
We have to disclose under RESPA to consumers that our brokerage has this and that business and they can use them but our brokerage owns them and will make money from them although they don't have to use them.
But buyer agents smile when they tell their clients, don't worry my services are FREE, I am paid by the seller. Where do the funds come from for this transaction? If the buyer does not buy the agent does not get paid, so why not pay the agent directly and stop this farce. Would it mean that maybe we need to be more professional and explain what we can do for the client and why they want to work with us. Would it save the consumer money because it would make them ask harder questions? Would some agents get out of the business because they can not explain their value? Would it encourage agents to choose between what they do, seller or buyer agency and make them more educated and thus better in their chosen field?
The question raises many of it's own all of which are interesting because I believe that our business is changing rapidly and many people involved are trying to hang on to how it was, unwilling to change, unwilling to offer consumers what they want preferring what is best for themselves.
Which raises the point that in agency you put your clients interests ahead of your own. If the buyer agent is paid directly by the buyer it removes the whole issue of how much compensation is offered and whether agents will show this house or that because the commission offered is better, whether if it is a for sale by owner there is a special procedure. It all becomes moot, because the buyer has already agreed to how they are going to pay their agent ahead of time, maybe with a retainer, maybe on an hourly basis, maybe per showing who knows, there are so many options it is exciting to just sit and think about it.
I admit it is easier to say the seller is going to pay me, but as many consumers, 97% according to NAR statistics, are online searching for homes they are already thinking that if they use the listing agent they can get a better deal, something I will deal with in another post, so is it really out of the realm of thinking that our consumers have already moved on and may just be waiting for us to catch up with them or that they may just leave us behind completely.
Buyers and agents what do you think?