I'm sure that we've all run across buyers that were just calling the listing agents of the properties they were interested in directly and not using a buyer's agent in order to get a "better deal" on the property. The ones I've run across thought that they could get 3% off of the price of the home or get a 3% credit back from the listing agent. The buyer wants the 3% back because the seller doesn't have to pay a selling broker and because the listing agent/broker is already making money on the listing side and should just be happy to sell the home.
It seems that some listing agents are giving back some of their commission to buyers if they use the listing agent as a dual agent. Though this may save the buyer some money in one regard, how much is the buyer and seller really losing by not having someone looking out for their best interests 100%? And how much liability is the agent taking on by acting as a dual agent?
In Virginia, an agent acting in dual agency can't guide the buyer or seller in regards to price or terms and has to represent each party equally.
Let's say a property is listed at $400K, but is $25K overpriced. Since the agent can't guide them or quote them a price, the buyer offers full price. If you factor in a 3% credit back from the agent (or take 3% off of the sales price), the net purchase price is $388K. With a fair market value of $375K, the buyer is overpaying by $13K despite the 3% they got back/off from the listing agent. Having their own buyer's agent could have saved them $13K, if not more. Their buyer's agent could have negotiated the price down to fair market value or have told them that the home was overpriced and shown them other better valued homes alltogether.
And if the seller thinks that the offer is "great" even if it's horrible, they woudln't be able to get a straight answer from their agent because they represent the buyer as well. The seller could potentially accept a weak/bad offer, take their property off the market and away from other potential buyers, have it fall out several weeks later, lose thousands of dollars in market value because the market continued it's downward trend and lose buyers who may have bought their property had it been on the market and accessible to them to view.
Not only can buyers not get the best deal in terms of price by dealing directly with the listing agent, they can also get in a world of trouble by not having representation or guidance regarding all the other terms of the contract. Not really a "better deal" if you ask me...
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