We REALTORS often hear buyers say that they are only going to buy with the listing agent because they can save 1 or 2 percent off the purchase price. The theory being that the listing agent will reduce their commission by this amount because they are representing both parties.
On paper, this may seem like a logical approach but in reality, it is really missing some important considerations.
ONE: As a lone wolf out looking for a home, you are missing a huge benefit in working with a buyer’s agent. Your buyer agent will be on the hunt, monitoring the market for any new listings that match your criteria. In a market like we are in now (active spring) having the 7 day a week, boots-on-the-ground agent searching for you really keeps you ahead of (or at least at) the curve. When the hot properties hit the market, they may receive offers in a matter of a day or two. That lead time can be the difference between frustration and home search success.
TWO: Statistically, there is no correlation between dual agency and lower purchase prices. Yes, there may be some kind of discounted amount built into the listing if the listing agent sells the house but that disregards the effect that a properly negotiated agreement of purchase and sale can lead to. For example, on a purchase of $240,000, 1% amounts to $2,400. In a negotiation, that perceived discount may not be available.
As a buyer with a buyer agent, that same amount or more may be attainable through negotiation of price, closing, chattels or all of the above.
THREE: Buying a coffee maker and buyer a home are 2 vastly different events. Buying a home with whatever person happens to have it listed eliminates the importance of the confidence and trust in the working relationship that you and your REALTOR will have. What is their knowledge of the home or area in which the home is located. Are they from the area? Do they know what important neighbourhood variables exist? What about the age of the home. Is it built in the 1940s? 1970s? What structural or mechanical or construction items are worthy of attention?
FOUR: In an active market, competing offers are a fairly common occurrence. When a listing agent receives multiple offers, one of which is theirs, any commission reductions quite often disappear in the interest of keeping a level playing field for all agents involved. Wading through the tricky waters of multiple offers is definitely a time when a skilled, competent and loyal representative will earn more than their worth.
Bottom line: Purchasing a home is a huge investment, both financially and emotionally. It is ok to ask for help. It is ok to research, interview and hire a REALTOR to get out there and hunt for you. At the end of the home buying road, you may find that going it on your own without the attention and focus that a buyer representative will provide can be costly both in time and money. Certainly more than the potential money that may or may not be available.
If you would like to meet with us and discuss this concept in greater detail, please feel free to call or email us at your convenience.
Thank-you for visiting.
THEbTEAM
Thank-you to Francesca Tosolini for the photo.