Whether I'm on the listing side of a transaction or working with buyers, these questions invariably come up...
1) Do the buyers need a realtor?
2) As a buyer, can I save 3% by going directly to the listing agent?
3) How is the agent on the buy side helping me?
These questions comes up all the time, and the answer is simple, but I will give a detailed explanation as to why working with a Realtor on the buy side of a transaction is not only good advice, but is essential.
From a buyer's perspective, it is of utmost importance that you have a Realtor (with local knowledge) involved and working on your behalf on the transaction. Significantly, while most home buyers may buy a home every 5-7 years, Realtors are in and out of homes every single day. Having someone to guide your interests, needs, wants, and desires is important, and good Realtors will also be able to provide guidance as to a property's potential market sustainability. Additionally, good Realtors will be looking to obtain your business for life and they won't want to sell you a property that they will have a difficult time selling several years later!
But to get to the all important question, does going directly to the Listing Agent save the Buyer and the Seller 3% on the transaction?? The answer is NO!
Before a property comes on the market, the Seller and the Listing Agent sign a Listing Agreement. That Listing Agreement spells out exactly what the compensation is going to be the Listing Agent and the Buyer's Agent (yes--the listing agreement specifically contemplates that there will be a Buyer's agent).
Therefore, with or without a Buyer's Agent, the Seller (who is responsible for paying the commission) will be obligated to pay the FULL COMMISSION. Now with that said, there are circumstances where Listing Agents may offer a small reduction in the total commission in instances where there was no Buyer's Agent, however, this small reduction is incidental relative to the value that a Buyer's Agent brings to the table for buyers and the risks associated with failing to utlize a Buyer's Agent.
My summary above reminds me of a circumstance where I was working with a young couple purchasing their first home. The couple was initially touring homes without a Realtor and on a weekend (important detail) came to a property that they believed would be a good fit. They were dealing directly with the Listing Agent who was selling them on all of the features and size of the home. They went back to see the home the following weekend (again--important detail) and then a friend referred them to me. On a 3rd visit, this time with me, I pointed out to them that, although the house seemed to be on a relatively quiet street, during the week, the street is a passthrough to avoid a nearby main road, so the traffic during certain hours of the day is significant. The Buyers had no idea and this was a fact that the Listing Agent would have never informed them.
I can come up with countless examples of how I have helped Buyers avoid issues by providing them with information that is basic to me because this is my profession, but not as basic to the average person. Some top things that come to mind include the following:
1) Having someone in your corner and providing representation in the transaction (so the dual representation a/k/a transaction broker relationship, which, although allowed in Florida, doesn't undermine the transaction).
2) Providing a true arms-length negotiation--I work hard to meet the needs of my Buyers.
3) Providing local knowledge like in the example above.
4) Providing references to other local vendors who are needed on a transaction (inspectors, roofers, mold companies, pest control companies, etc.).
5) Providing comparables to an appraiser to ensure that the appraiser get current and accurate market sales.
At the end of the day, the cost associated with having a Buyer's Agent is being paid by the Seller, so it is truly a win-win for a Buyer to work with a good local Realtor.
Certified Luxury Home Marketing Specialist (CLHMS)
Senior Real Estate Specialist (SRES)
Keller Williams Realty Boca Raton
(561) 961-8484 or (786) 314-6100
Our team provides a specialized expertise in Boca Raton, Delray Beach, Boynton Beach, Highland Beach, West Palm Beach, Lake Worth, Parkland, Coral Springs, Deerfield Beach, all of the Country Club, New Construction, and 55+ communities, and other parts of Palm Beach and Broward Counties.
To access a free MLS search for all properties in these areas, visit the following: https://www.friedmanluxuryhomes.com/quick-search
P.S. By the way, should you come in contact with anyone who is considering buying or selling a property anywhere in South Florida, I would be delighted to help them. Please don't hesitate to give me a call or send me an e-mail or text message with their name and number or e-mail address. I'll follow up right away, and I'll be happy to provide them with information and/or answer any questions that they might have.