Seller/Listing agent vs Buyer agent

[MJ]

I'm not sure if this is the right forum to ask this but here goes. I haven't bought a house in a very long time and at that time I purchased it directly from the owner.
I saw a property I liked on Zillow and contacted one of the agents. When I met him he said he was a buyer's agent but ultimately gets his part of the commission from the seller. And yes, I realize to some degree, the asking price may reflect the commission the seller will pay out. Now the ad also lists the listing agent. Commission wise, is it to my advantage to deal only with a listing agent so that there is more price negotiation leverage since the agent isn't sharing the 6% with another agent. If I use the buyer's agent are they really on my side in getting the best price since a lower price will get them a lower commission.
Is it to my advantage to use the listing agent to eliminate delays in getting answers to questions from the seller rather than through the buyer agent. I also read you need to be careful to what you tell the selling agent so it doesn't get back to the seller.

I also want to mention I am pretty internet savvy and can get a lot of info about buying property so is there really an advantage to have a buyer agent represent me

 

[Big_Hitter]

yes you want a buyer's agent

 

[Senator]

You want a buyers agent, they are loyal to you. If you use the same agent as the seller, and you say, "I would offer up another $5K if I have to". Expect the seller will know that you said it and you will have to offer up higher.

If you want to get some cash back, negotiate it ahead of time. If you plan on looking at 10+ properties with your agent, they deserve the whole commission.

If you pick out a property and make a purchase, maybe get a bit back.

 

[exnavynuke]

IMO realtors are a waste of money for anyone local to the sale who has access to the internet and reasonable intelligence, but plenty of people disagree.

 

[travelover]

I'm currently selling a house. My opinion is that no real estate agent is on your side. They want a sale and they want to make as much money as soon as possible as a result. If you go directly to the seller's agent, they double dip. This presents an opportunity for you to negotiate with the agent / broker for money back on the commission paid by the seller. I did this when I bought my current house and am renegotiating the commission as I sell it.

In any case, realize that the agent is just a third party involved in the transaction and does not have your best interest in mind - they just want the money.

 

[Bamaman]

Even if you get your own agent, I think you'll find he's actually working for the seller. He's going to end up splitting the commission with the sellers agent 50/50 in most situations.

You don't want to get too close to either--as they're after their half of 6% (most cases.) If you're willing to pay more, just keep your mouth shut. Both agents will "sell you out."

 

[Sunset]

I'm currently selling a house. My opinion is that no real estate agent is on your side. They want a sale and they want to make as much money as soon as possible as a result. If you go directly to the seller's agent, they double dip. This presents an opportunity for you to negotiate with the agent / broker for money back on the commission paid by the seller. I did this on when I bought my current house and am renegotiating the commission as I sell it.

In any case, realize that the agent is just a third party involved in the transaction and does not have your best interest in mind - they just want the money.

+1
I have used the seller agent to buy a place, and the only advantage to me as a buyer was the agent made double sure to make the sale.

Bottom line is no agent is your friend.

 

[Senator]

I'm currently selling a house. My opinion is that no real estate agent is on your side. They want a sale and they want to make as much money as soon as possible as a result. If you go directly to the seller's agent, they double dip. This presents an opportunity for you to negotiate with the agent / broker for money back on the commission paid by the seller. I did this on when I bought my current house and am renegotiating the commission as I sell it.

In any case, realize that the agent is just a third party involved in the transaction and does not have your best interest in mind - they just want the money.

I was able to get a 25% rebate on the buyers side of the commission. ~$1700 per property.

I showed the agent the property I wanted to buy. We looked at it and made an offer. I did not browse.

 

[pb4uski]

You want a buyers agent, they are loyal to you. If you use the same agent as the seller, and you say, "I would offer up another $5K if I have to". Expect the seller will know that you said it and you will have to offer up higher. ...

Even if you get your own agent, I think you'll find he's actually working for the seller. He's going to end up splitting the commission with the sellers agent 50/50 in most situations.

You don't want to get too close to either--as they're after their half of 6% (most cases.) If you're willing to pay more, just keep your mouth shut. Both agents will "sell you out."

+1 with Bamaman.

Even if the agent is only working with you but showing you MLS listed homes and gets paid by a portion of the commission paid by the seller then their allegiance is to the seller and they would have a duty to report what you said to the seller.

IOW, loyalty follows who is legally obligated to pay the bill, which is usually the seller, even though the buyer pays it indirectly since it is built into the sales price.

Unless the buyer engages the agent and are paying them directly (which is rare) the agents that you deal with are loyal to the seller.

 

[Willers]

Be careful even with buyer agents. In some situations in some states you may be liable for the actions of a buyer agent. Always check the rules in your state before signing with a buyer agent. In our state it is not an advantage.

Sent from my SM-T810 using Early Retirement Forum mobile app

 

[MJ]

yes you want a buyer's agent

Why?

 

[MJ]

Thanks for the advice.

 

[sheldon cornped]

Go back and reread travelover's response as I believe he/she perfectly described the reality. We just went under contract using the seller's agent (dual agency) with the intent of gaining some leverage in our offer price below list (Oregon, hardly a buyers market). Just prior to our current contract we backed out on another contract (long story) where we used the dual agency agreement. In both instances, different agents told us that they were giving up part of their commissions to make the deal go through. Were they telling us the truth? We'll never know, except you can bet it is in the agent's best interest to see a deal go through where she gets a 6% payday versus 3%. I researched dual agency as to whether there is an advantage. It said that overall the study did show a savings to the buyer in such transactions. However, there is certainly no guarantee and in many deals it makes no difference. What other leverage does the buyer have other than using this tactic to get a better deal? 1%-2% can be a big deal.

 

[W2R]

As I understand it, this all depends on the state where you live. Here, there are legal documents to sign, telling you all this fiduciary/allegiance stuff.

But the best protection is to avoid just going with the first agent that smiles at you. Take your time. Find a good, very experienced agent with a broad based and utterly sterling local reputation and with a lot to lose, and with whom you feel you can establish a good working relationship.

 

[travelover]

The real estate business is a little anachronistic - kind of like the travel agent of yore. In the bad ole days agents acted as guards to the MLS and if you wanted to find a house you basically were stuck going through them to access the listings and to have them drive you around looking at homes. Now with the internet, sites like Zillow, Realtor.com, Trulia and Redfin allow you to see every single house for sale in the country including tax information, past sale prices, selling trends for the area, school system and crime scores, etc. Other than guiding buyers and sellers through the process, not much real value is delivered for the price, IMHO.

 

[W2R]

Other than guiding buyers and sellers through the process, not much real value is delivered for the price, IMHO.

Right, that's true if you go with the first agent you see. If you take the time to do your homework and get a very good agent, he can save you many times what he is paid.

 

[travelover]

Right, that's true if you go with the first agent you see. If you take the time to do your homework and get a very good agent, he can save you many times what he is paid.

That has not been my experience. Everything is on the internet now and I've not found much value added from agents. How did they save you money?

 

[MooreBonds]

That has not been my experience. Everything is on the internet now and I've not found much value added from agents. How did they save you money?

There are many agents that are simply salespeople (just like many financial "advisors" that are simply salespeople). I'm sure that there are some agents who would point out things to consider when looking at homes, such as possible deficiencies, things to consider when comparing House A to House B, etc. No idea how to identify or weed them out in searches, though.

Having said that, the only house I've bought I did it without an agent, and did some hefty negotiating with the seller/her agent. I know for a fact that the seller's agent reduced her commission since she was "getting both", to help offset some of the price drops the seller had to accept.

 

[W2R]

That has not been my experience. Everything is on the internet now and I've not found much value added from agents. How did they save you money?

Wow, in about 150 ways! Rather than challenging me, I'd suggest that you actually spend the considerable time and effort that it may take to locate an agent who can do a good job for you and experience it yourself.

Overall I'd say my agent not only got me the home I wanted, in a hot market, but also saved me about 25% of the selling price of my home overall. I probably wouldn't have known about these ways to save me money, had I not been able to watch him do it. A good agent knows the neighborhoods, the original developers, how the houses were constructed, the geology, negotiation, laws that can require the sellers to pay for certain expensive unanticipated repairs even after the contract and the repair "laundry list" is already signed, and who personally knows the other agents, inspectors, and others involved in the deal (what their weak points may be, for example), the local rumor mill that can help him with the sellers' psychology, and generally just knows more than anybody who hasn't spent his whole life in the real estate business in that one particular neighborhood, can possibly know.

 

[travelover]

.............Overall I'd say my agent not only got me the home I wanted, in a hot market, but also saved me about 25% of the selling price of my home overall. ...........

Seriously, the agent saved you 25%? If so, I'd be happy, too.

 

[W2R]

Seriously, the agent saved you 25%? If so, I'd be happy, too.

Seriously, yes. And that's why I went with this agent. He saved me a bundle on my last house, too, in comparison with how I would have done on my own or with a novice agent. He is a real wizard with local real estate and twice now, he has done a great job for me. Unfortunately, he's almost 80 so I'm going to be up a tree if I ever have to move again. I'll have to start from scratch looking for an agent. Oh well, I don't plan to ever move again so hopefully this will not be a future problem for me.

 

[travelover]

Seriously, yes. And that's why I went with this agent. He saved me a bundle on my last house, too, in comparison with how I would have done on my own or with a novice agent. He is a real wizard with local real estate and twice now, he has done a great job for me. Unfortunately, he's almost 80 so I'm going to be up a tree if I ever have to move again. I'll have to start from scratch looking for an agent. Oh well, I don't plan to ever move again so hopefully this will not be a future problem for me.

In my neck of the woods, SE Michigan, houses tend to sell at about 2 to 3% below asking price, unless they are poorly priced initially. So 25% would be huge.

 

[Curmudgeon]

If you're savvy enough to manage the process yourself (I'm guessing you are, if you're on this forum) then avoid the buyer's agent. As others have said, they are all working in their own best interest (not yours), regardless of what their contract states. And when it comes time to negotiating price, you will get more wiggle room from a seller's agent who is looking at a 6-7% chunk of the pie all to himself, than from an agent who is only looking at half of that.

 

[OverThinkMuch]

In California's Silicon Valley the seller's market is so hot that multiple offers are standard. There's no way to save 25% there, since you're just going to be ignored in favor of the other buyers making offers.

The motivation of real estate agent's is getting their commissions. I say commissions, because if you have friends, they want to keep your good opinion and get another client in the deal. But excepting that, they want the deal to close - even if working for the buyers. Just keep in mind the buyer's agent gets paid $0 when you don't buy a house.

You might also look for home inspectors now. Your real estate agent will spot some problems on sight, but a good home inspector will give you the most detailed evaluation of the house. If you don't look for a home inspector, you're more likely to pick whoever your real estate agent recommends - and you might regret that. Because again, a home inspector who spoils too many deals doesn't get repeat business from a real estate agent.

 

[socca]

Commission wise, is it to my advantage to deal only with a listing agent so that there is more price negotiation leverage since the agent isn't sharing the 6% with another agent.

As a buyer, you are negotiating with the seller via the seller's agent. You and the seller will go through the usual bargaining merry-go-round to reach a mutually agreeable price. I think that it would be bad form during the negotiation phase for the buyer to demand a discount because there's no buyer's agent involved. Instead, if you and the seller reach an impasse during price negotiation, the agent may volunteer to throw in a few thousand (essentially cutting the commission) so the deal goes through. This is what happened on my house purchase last year. It never even occurred to me to ask the seller's agent to cut his commission, and I was surprised when he did.

If I use the buyer's agent are they really on my side in getting the best price since a lower price will get them a lower commission.

No - follow the money. The so-called buyer's agent is paid by the seller.

Is it to my advantage to use the listing agent to eliminate delays in getting answers to questions from the seller rather than through the buyer agent.

I was very pleased with how efficient the price negotiation was without a buyer's agent in the communication chain. Buyer-Listing Agent-Seller is more efficient than Buyer-Buyer's Agent-Seller's Agent-Seller.

Note: I did hire a real estate attorney who specializes in closings to handle the paperwork and money. The seller's agent offered to have his company do this, but I wasn't comfortable with that arrangement.

Note: I also purchased a couple of books on buying residential real estate from amazon.com, and was glad I did. Like you, I hadn't bought a house in quite some time, and needed a refresher. The electronic document signing we used to close the deal was very fast and efficient compared to the old-fashioned method of sending paperwork around.

Good luck!