Will I get a better deal on a home if I go directly to listing agent?
Will I get a better deal on a home if I go directly to the listing agent?
If you’re searching for a home to purchase and have ever wondered whether or not you can save money somehow or get a better deal if you reach out directly to the listing agent, I’ll comfortably and confidently tell you that it’s highly unlikely. You might even end up paying too much for the home or, alternatively, have a more difficult time getting past any obstacles that may come along during the transaction (inspection issues, encroachments on the property, appraisal issues, etc.). Let me explain…
The listing agent on any given property for sale represents the owners of the property, not you. That means they have legal and ethical obligations and responsibilities to the homeowner that they don’t owe you, nor are they allowed to provide to you. They won’t negotiate the price and terms for you, help you navigate the often complicated inspections process, do anything to give you any leverage, or maintain any confidential information you share with them.
Now, there is a way that you can have the listing agent representing both you and the seller. This would be called “dual agency” and require permission from the seller and you because while both parties would be represented equally, there are still some limitations. For instance, the agent cannot negotiate either party's purchase price and terms. All they can do is convey your offer to the seller and get a response, but they cannot advise (which can backfire on you if there are multiple offers on the property). They also can’t advise you on any inspection or appraisal issues that may arise because they can’t do or say anything that might be unfair to one party or the other. On the other hand, dual agency situations can sometimes be extremely pleasant, especially if there is a lot of trust between you and the Realtor and you feel educated enough to make some of your own decisions. I’ve represented many clients in dual agency situations and have had them go wonderfully. But, you have to ask yourself if this is worth it versus hiring your buyer's agent to represent you 100%.
“But, if I’m not bringing a buyer's agent, and therefore, they don’t have to pay a buyer's agent, won’t the listing firm or seller be more willing to lower the price or give me better terms?”
Well, probably not. Here’s why…
The property owners have already agreed to pay the listing firm a certain amount to list and sell the property. This fee or percentage includes whatever amount the listing firm is willing to compensate the buyer's agent if there is one. But if there is no buyer's agent, that fee is still owed to the listing firm. Why would the listing firm turn around and give that to you knowing that they have no buyer’s agent to buffer the communication between you and them (if there are issues), knowing they're going to have to work harder to make sure that you’re doing things on your end promptly, and possibly having to incur more liability? From a monetary standpoint, the listing agent and/or firm may (or may not) welcome this because they would earn more money but would also be working harder for it.
So, will you get a better deal if you go directly to the listing agent? Probably not. It doesn’t mean that you can’t or won’t have a wonderful experience, but if your goal, by going directly to the listing agent, is to get some deal, I wouldn’t bank on it. And if you do, it might not be worth the risks.
If you’re considering buying a home and want to ensure that you have a great experience, have wonderful representation, and have someone always looking out for YOUR best interests, please fill out the contact form below and let us know more about you and how we can help. We represent both buyers and sellers and are always transparent and open from the start and seek nothing but your best interests along the way.