It’s Sunday afternoon, you are driving by the stately red-brick Federal style home with the decorative balustrade, the Palladian style windows and the climbing roses in the side yard. You have loved it from the outside and always wondered what it looks like on the inside. On this drive you notice a For Sale sign in the front yard. Your heart skips a beat when you notice the Realtor’s balloons announcing that today there is an open house.
You park. You enter the property and, wonder upon wonders, the house and surrounding grounds are everything you had hoped they would be. Your partner takes one look at the glazed look in your eyes and the drool that is forming at the corners of your mouth. He/she now understands that life in your current home is over. Your partner hands you a tissue and asks, “Do you want make an offer?” You nearly pass out from joy, collect yourself and run to the listing agent to start the paperwork before you come to you senses. Pause . . . .
Before leaping into a relationship with the listing agent, every buyer needs to be aware of a few significant factors. In real estate, there are two distinct relationships in regard to representation: the listing agent and the buyer’s agent. The difference between the two is important to understand from the very beginning. When a buyer or seller is not adequately represented, the result can, and usually does, cost one, or even both sides, thousands of dollars.
If a buyer uses a listing agent to represent them in the purchase of a property the listing agent is selling, they now have an agent who is dealing in conflicting responsibilities.
Just take a second and think about this: How can the listing agent get the most money possible for a seller and the lowest price possible for the buyer? They cannot.
For every home listed for sale by a real estate company/brokerage, there is a listing agent. In West Virginia, it is perfectly legal for a buyer’s agent not to be included in a purchase of real estate. Listing agents are allowed to handle both sides of a transaction. However, their fiduciary responsibility is always to the seller. No matter how nice or integral you feel the listing agent is, the listing agent’s sole ethical and legal responsibility is to represent the seller’s interests. Always. And that interest, in most cases, is to obtain the highest price possible from the buyer. Buyers who choose not to enlist a buyer’s agent put themselves at risk. A buyer’s agent ensures the buyer’s interests are addressed.
The number one reason buyers do not choose to get a buyer’s agent is the misconception that it will cost them money. On the contrary, there is no cost to the buyer to employ a buyer’s agent. A buyer’s agent’s commission is paid by the seller. When a real estate transaction is conducted between a listing agent and a buyer’s agent, the commission is split equally between the agents, and most importantly, paid entirely by the seller.
So, why would a purchaser choose or allow a listing agent to represent them? Many times the buyer incorrectly thinks they are getting a better deal by utilizing a single agent in the transaction because they hope the agent will reduce their commission or the price of the property. Even in the unlikelihood of the listing agent reducing their commission, the discount would go to the seller because the commission is always paid by the seller and not the buyer. To put this in perspective, it is much the same as asking an attorney to represent both parties in a civil case, asking for a discount on the legal costs and then expecting the attorney to be able to represent both sides fairly.
So, even though you want to scream, “I can’t wait any longer!” Pull yourself together before racing into the arms of the listing agent. Call me. Or, ask for a referral to a buyer’s agent. Or, simply call another real estate company and ask them to match you up with an agent to walk through the house with you and possibly write up an offer.
Remember, it is always in your best interest to have someone looking out for your best interest.