Main Line Homes Blog

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Are you really going to save by negotiating with the listing agent?

Many buyers today believe that they can save themselves money by negotiating with the seller through the listing agent rather than have a buyers agent. I wrote yesterday that I felt buyer agency is a sham not because I don't believe in buyer agency because I do, but because the agent is paid by the seller, and until the buyer pays for their own agent the idea of agency is a sham.

Likewise I think buyers don't understand that the listing contract is drawn up before any buyer is ever in the picture. That listing contract states what percentage the home is being listed for by the broker, not the agent but the broker. In filling out the contract discussion is held with the seller about how much they wish to offer as compensation for the buyers agent or transaction agent. However, the way the contract is written, if there is no buyer or transaction agent the listing broker is due all the commission. So what are you saving.

So if you are a buyer why would you not have your own agent represent you. Is it because you trust the listing agent to help you. Yes, as a listing agent it is our duty and responsibility to help you but not represent you, unless both buyer and seller agree to Dual Agency, but that has its own headaches, limited disclosure being just one of them. Better by far to have representation, a professional who is going to know the area you are buying in, knows the homes, the schools, the shops, the restaurants, the parks, the roads, the trains, the inspectors, the businesses, the contractors etc. Not only do they know all this, they handle these types of negotiation regularly, and know what sorts of things can go wrong and how to rectify them if they do. That is what you are paying your buyers agent for, but not only this, you also get their knowledge of local mortgage brokers and bankers, those who will be at settlement with the money and who are aggressive on rates and fees. They know local real estate attorneys who do title and can save you hundreds of dollars in title insurance even when the state regulates the title insurance amounts.

This is what you are paying for, and using that listing agent who either does not want to represent you, or who is even worse representing the seller alone although you may believe he is representing you does not save you anything.

A good buyers agent can suggest different negotiation tactics, different homes to consider, to get you into a home that you want without paying too much. In the last couple of weeks I have come across two different situations where the listing agent was either oblivious to the prices homes were selling for in a development and thus had listed the home way too high only saying every time we negotiated "This is better than all the homes listed", without any basis in facts; and secondly an agent who was losing the listing and was willing to give away his sellers bottom line so he could get his commission for the sale. As a buyers agent I am there to protect my client, the buyer and in both situations there were reasons why my buyers needed to know the correct information about both homes.

That is the true value of a buyers agent and negotiating directly with the listing agent can lead you into a mistake if money is the only thing you consider in the negotiations.

If you are buying or selling on or around Tredyffrin Easttown or along the Main Line we can help you,  contact us or connect

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Comments

Nick and Trudy, I absolutely LOVE this post.  I have been on somewhat of a rant lately on buyers agency, myself.  Great information!

Posted by Faith LaRosse, Realtor(R) (Springer Realty Group) about 7 years ago

Faith, thanks for the comment, check out the Why Buyer Agency is a sham as well. I think the times are changing and we need to change with them and look at alternative ways to do our business.

Posted by Nick & Trudy Vandekar, 610-203-4543, Tredyffrin Easttown Realtors, Philly Main Line (Long & Foster Real Estate Inc 610-225-7400) about 7 years ago

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