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Do I Really Need A Real Estate Agent
Dated: July 20 2015
In today's Internet-connected world, pretty much every property that is for sale is viewable without an agent. Anyone can find properties that seem to match up with their criteria, view pictures or virtual tours, and even check out who owns the property and what the taxes are. Heck, this website is a great resource for doing that. As of November of 2014, 92% of today's buyers do start out just that way, finding properties that interest them on the internet while sitting at the kitchen table. 50% of buyers use mobile devices.
And, of course, anyone can find open houses and drop in without a Realtor in tow, or stop into a new construction office all on their own.
Because of this, I often hear people say that Realtors are just "middle men" and will go the way of the buggy-whip, like so many other professions. But is that true?
So, do you really need a Realtor?
Now, it's obvious that I have a vested interest in the answer to that question, so I'm not going to answer it - I'll let you answer that for yourself. What I will do is layout some facts for you to consider.
When listing a property, the seller agrees to pay the listing broker some amount of the selling price, usually 6-7%. This amount gets paid to the listing broker whether or not the buyer has an agent. If the buyer also has an agent, that listing broker splits some part of that commission with the buyer's agent. The point is, it doesn't matter to the seller whether the buyer has an agent or not - he will pay the same amount to the listing broker regardless. So, it costs the buyer nothing to have an agent at her side, and the price won't be reduced if the buyer doesn't have an agent.
Because of the fact that the seller pays the buyer's agent, there is a common misconception out there that the buyer's agent is actually working for the seller. Again, by law, this is not true at all. In fact, the agent has a fiduciary responsibility to the person that hires her regardless of who pays her. So the buyer's agent is required by law (not tradition or Realtor rules) to represent that buyer to the best of her abilities, to get that property for the lowest possible price, and to keep all of the buyer's price, terms and motivations confidential - forever.
If a buyer walks into an open house or new construction, decides she likes the place, decides to buy it, chats up the selling Realtor there and makes an offer, just who does that selling Realtor represent? Both the buyer and the seller? Well, of course that Realtor represents the best interest of the seller. She is required by law (again) to do everything she can to get as much money and as many concessions out of that buyer as possible. In fact, if that buyer shares confidential information with the selling Realtor, she is required to share that info with the seller! The buyer has no agent, no representation, no one looking out for her best interests - she is merely a customer. Truly a sheep in the presence of a wolf.
What are the downsides to having a buyer's agent? Well, let's see... you have to let her spend her gas while she drives you around, you are forced to have someone who is truly working for you instead of the seller, you get advice from someone who knows the neighborhoods and houses because she's been through them so many times she dreams about them, and you are forced to pay nothing for it. Oh, wait - those are good things, not bad things!
There are no downsides! You won't get cooties by hooking up with a Realtor, she won't twist your arm and force you to buy something, she looks out for you, and it costs you nothing!
So. You decide. Do you really need a Realtor? Let me know if you decide you do! ;)
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