I want to buy a house. I know the property and the seller has an agent. Do I need my own agent or can I negotiate a lower fee if I act as my own agent?
If you have to ask this question, you probably don’t have the necessary knowledge to properly represent yourself. The seller pays the real estate commission, not the buyer, and real estate commissions are already set in the listing contract. It doesn’t cost you anything extra to have your own agent represent you because the seller is already paying for it. If you don’t have your own agent, the seller’s agent will often represent both you and the seller as a “dual agent” or just represent the seller. This means the agent either has divided loyalties or is working for the seller, not you. In this situation, since there is only one agent to be paid, sometimes you can get a reduction in price by getting the agent to accept a lower commission from the seller. However, you have to realize that you are interfering in what is essentially an agreement between the agent and the seller — and something that has already been negotiated and agreed upon. The seller can net the same gain on a lower price if they have to pay less commission. At the same time, the agent is not going to be willing to cut the commission totally in half because – since you don’t have an agent – they are going to be doing some of the work that your agent would normally be doing (whether you realize it or not). And you’d better know what you’re doing – because the listing agent isn’t going to be on your side. If your offer causes them to reduce their commission from what the seller has already agreed to — that agent isn’t going to be real happy with you.
What is a buyers agent, what does this specifically do for a buyer and who usually pays this
On most transactions, there is usually a listing agent and a selling agent. The selling agent is sometimes referred to in media as the buyer’s agent, because he works on the buyer’s behalf and it easier than explaining each time that the “selling agent” is not the listing agent and is actually the buyer’s agent. However… There are some agents that market themselves as “buyer’s agents,” “exclusive buyer’s agents,” buyer’s representatives,” and so on. Mostly it is just marketing. At the same time, part of it is because they want to accentuate the reasons a buyer should not go directly to the listing agent when they purchase real estate. This has to do with agency. See, if a buyer goes directly to the listing agent, they are dealing with an agent that has conflicting responsibilities. Their job is to get a good price for the seller and they may not zealously represent the interests of the buyer. Those who market themselves as “Buyer’s Agents” indicate they are only working for the buyer in a real estate transaction. The commission is still paid by the seller, no matter what they say in their marketing (with extremely rare exceptions). They either get paid directly by the seller or set up the transaction so that the seller provides a “credit” to the buyer for how much the real estate commission is — then the buyer pays the commission. Like a Realtor I once knew said, “No matter how it is set up, the buyer still walks away with the house and the seller still walks away with 94% of the purchase price.”
I looked at a property yesterday with a realtor who quite obviously has no clue what he is doing. I really want to purchase that house, but don’t want the hassle of working with an agent who doesn’t know his business. Can I switch agents and still buy that house?
If you want to purchase that property, the only ethical thing is to purchase it through that Realtor. Otherwise, you could set up potential conflicts between your previous agent and whatever new agent you may choose. You see, if your previous agent finds out you purchased the home with a new agent, he may want to claim all or a portion of you new agent’s commission. This could develop into a “battle royale” involving real estate agents, offices, managers, brokers, and attorneys. You may be able to resolve the issue by letting your current agent know you have misgivings about their expertise and ask if a more experienced Realtor from his office can be aboard as your advisor, too. That is the only ethical way I can think of to handle your situation. It isn’t “your” ethics I mean, but the ethics of the two agents. One agent isn’t supposed to make an offer on a property you have already previewed with another agent. It happens, but it isn’t ethical without some sort of disclosure and agreement between the parties.
I want to buy a home and approached two different real estate agents. One was very informative, handed us brochures, especially on the real estate law and the responsibility of the agent. The other was very informal, made a lot of gestures, and presented nothing in writing.
Agents are all different in their style and how they deal with people. Some are formal and some are informal. That doesn’t necessarily have anything to do with their knowledge and ability. Go with who you like and who you trust.