“I have No Home Buyer’s Agent working for me, I Should Get a Better Deal on the House Price”
Oh no you got it all Wrong!
A friend of one of my home buyers came to one of my open houses and told me that she was looking to buy a house, but she didn't want to work with a buyer’s agent because she wanted to get a better deal from the sellers. She said if she didn't have a buyer’s agent, the sellers would have to pay less commission and therefore lower the sales price even more.
But I had to tell her that she unfortunately had got it all wrong! This is a misconception that many people have, who don’t have a clear understanding on how the Real Estate industry really works around here.
When a seller hires a real estate agent to list their house, they usually have a listing agreement for how much the seller is willing to pay the seller’s agent. Around here it is usually 6% commission of the sales price. A good seller’s agent will market their house and try to find as many potential buyers as possible to sell the house on her own for 6%.
However in order to increase the chances to finding a buyer, the listing agent becomes a member of the Kansas City Multi List Service so that she can advertise and upload pictures and information about the house on the Multi list website system, where other Realtor members also have access to.
When the listing agent uploads the information of the house on the MLS system, she is agreeing to split her own commission with an agent that is also a member of the KC Multi list service that might have a buyer for the house. So the listing agent gets 3% and the buyer’s agent gets 3%.
The sellers already agreed to pay 6% commission to sell their house; it doesn't matter if the listing agent finds a buyer for the house on her own, or if she decides to split her commission with another Realtor .The listing agent gets to keep the 6% if she finds a buyer on her own or she gets 3% if she has to split with another agent that brought the buyer.
A buyer will not get a discount on the sales of the house if he doesn't have a buyer’s agent working for him and uses the listing agent directly to help him with the sales transaction, because first of all, the sellers have already agreed to pay the sellers agent 6% anyways and secondly, because it also requires a lot of work from the agent to work on the buyer’s side.
Buyer’s agent work is not only driving buyers and opening doors of houses, there is much more to that. Besides helping the buyer to find a house; the buyer’s agent assists the home buyer with 1) Finding a loan officer and the appropriate financing type for the house, 2) Writing the contract offer,3) Negotiating the sales price, 4) Bringing a home inspector & specialists to the house and following inspection deadlines, 5) Understanding the inspection report and what to ask the sellers to have repaired, 6) Negotiating the defect items found in the inspections report, 7) Following up with the appraisal results, 8) Following up with the title company making sure they have all the paperwork needed for closing, 9) signing the closing paperwork and receiving the keys to the house. Because of all this work, it will be difficult for a listing agent to agree to lower her commission just because the buyer doesn't have a buyer’s agent. Once a buyer has found a house, the work of the buyer’s side has just begun.
Since it is the sellers that are paying the real estate commission; buyers don’t have to pay the Realtor commission to receive professional real estate services to help them buying their home. Having a buyer’s agent working for you, you will have someone protecting your interests through all the steps of the home buying process and working hard for you to get everything you desire in the transaction.
When using the Sellers’ agent directly, according to the law they need to give you all the information you need, however they will have to be neutral on the negotiations, therefore you may not get all advantages that you would get, if you had a buyer’s agent working for you. There is nothing to lose when using a buyer's agent and you will have someone protecting your interests and working exclusively just for you.
If you are interested in finding you a perfect home, I am here to work exclusively just for you and make sure your interests are protected through all the steps of the home buying process. The interest rates are so low that it makes a great time to buy right now. Don’t miss this opportunity.