photo credit: Enrico Fuente
Noticed this one on Jim Duncan’s blog but I’m going to start with the other myth from the same post on RealEstateJournal first:
“Plus, a new kind of agent emerged over the years, the ‘exclusive buyer agent,’ who is responsible to the buyer alone and doesn’t list homes. I highly recommend that buyers seek out such agents, as they’ll not only keep your confidence, they’ll also drive you around, give you valuable insight into market conditions and negotiate hard on your behalf — without any possibility of a conflict of interest. “
I’ve worked with buyers. I’ve also listed homes. How exactly is it a conflict of interest for me to work with buyers on homes in Glendale’s Arrowhead Ranch when I have a listing in Avondale, some 15 miles away? And how is it that simply because I’ve listed homes that I’m unable to discuss market conditions in depth and negotiate on a buyers’ behalf?
Or that I’m unable to keep a buyers’ confidence (even though it’s my fiduciary responsible to do so as a buyers agent, EBA or not) simply because I also list homes for a living?
These are thoroughly ridiculous assertions without the slightest bit of merit. I’d actually argue that I’m in a somewhat better position to negotiate, having actually sat at a table with sellers when presenting offers and having some knowledge of the emotions on the other side. But that’s just me.
As for the other myth, here we go again …
“But like everyone else, buyer agents don’t work for free. At first glance, it seems like the seller pays them, since most are paid at closing from the commission costs that the seller pays, just as in the past. In reality, buyers pay for everything, since sellers routinely factor these costs into the asking price for the home”
Again, we’re pretending there’s one side to the equation. Yes, the buyer brings the money to the table. But the seller is the one bringing the home. And just as the buyers’ mortgage total is impacted by the commissions so is the sellers’ net. It’s two sides of the same equation, indivisible.
Further, the statement that commissions are factored into the list price is specious. Let’s say the average commission in some area was 10%. Tomorrow we magically divorce commissions and suddenly there’s no need for a 5% co-broke to be paid.
Are you going to tell me list prices instantly would fall by 5%?
Are you?
But that would have to happen if commissions truly were factored in. Similarly, show me the homes being sold by unrepresented sellers where the list price is lower than the MLS-listed homes around it by the amount of a co-broke fee.
It doesn’t happen. I’ve yet to run into an unrepresented seller who looks at all the comps then deducts the commission that’s not coming out of their net. If you have, please share.
One final note specific to this article … the person answering completely missed the question. The question was about an agent requiring a non-refundable retainer, not an agent working on a flat-fee basis.
I realize I’m leaping to conclusions but I tend to doubt the agent with 28 years experience was planning to work for $395. Yet that’s what’s implied at the end of the post.
More tremendous advice for unsuspecting buyers out there.
Sheesh.
