The longer I’m in this business, the more I hear people who want to buy a home say, “I just like to call the listing agent and have them take care of me.” This is a shocking statement. Why? Because buying a home is a legal transaction, and when a legal transaction takes place, you never want the other party who is trying to take your money to also represent you.
If you were being sued $150,000, you wouldn’t waltz into court without an attorney and ask the prosecution to assist you in your defense. And yet, many people think it makes sense to purchase a $150,000 home without a buyer’s agent and to just have the listing agent assist them through it, even though the seller has already made a contractual agreement to pay for the buyer’s agent (see Misconception 1 below).
So I believe there are many misconceptions that people have when it comes to buyer’s agents and purchasing real estate. Let’s tackle a few of these:
Misconception 1: If I hire my own agent to help me buy a home instead of going through the listing agent, it will cost me more money. No! When someone lists a home with a REALTOR®, they agree to pay the buyer’s agent a set amount of money at closing. If the listing agent also works with you (the buyer) as a dual agent, then the money set aside for the buyer’s agent simply goes to the listing agent in addition to what they are already making for the listing. That money does not get deducted from the price of the home. In other words, having a buyer’s agent is free, and not having a buyer’s agent won’t save you any money.
Misconception 2: I have an attorney handling the closing for this transaction, so I don’t need a buyer’s agent to help represent me. A closing attorney is just that – they help you close on your home after it’s under contract, which involves doing the title work, making sure everything with your loan complies with the law, etc. Closing attorneys do not advise you on your offer or ensure that you get a fair deal. They only get involved after you have a contract that’s been accepted, and by that time, any legal advice you get is too little too late, since the contract has already been signed. You need an agent representing you who is familiar with real estate transactions and contracts to ensure that your offer and contract are to your best interest. Only after you put in an offer and get under contract does the closing attorney get involved.
Misconception 3: I can see home listings online, so I don’t need an agent to help me find one. There is a lot of information online, but I can speak from first-hand experience that nothing trumps the information you can get from a REALTOR®. Real estate information online tends to be unreliable – for instance, I frequently see incorrect square footage on websites like Zillow and Trulia. And there can be a major delay (sometimes several days) before a home that has been listed appears online, putting you at a major disadvantage. A good buyer’s agent can get you setup so that his software automatically sends you updates on new listings the moment they become active. In other words, having a buyer’s agent will allow you to see new listings instantaneously rather than having to wait until Zillow or Realtor.com are updated.
Misconception 4: The listing agent is a more valuable resource for me than another agent because they know more about the house and seller than any other agent. The listing agent by law has a fiduciary responsibility to represent the seller and act in the seller’s best interest alone. This means that any communication the listing agent has with you must be to the benefit of the seller, not to your benefit. As such, listing agents will (and should) withhold important information from you that would be disadvantageous to the seller.
Misconception 5: The listing agent will be more responsive to me as a buyer than another agent would. This is an assumption, and you should never make an assumption when it comes to someone providing you legal representation (as real estate agents do). A better strategy is to interview a few buyer’s agents and find one that you feel will do the best job as possible for you.
Misconception 6: Having two agents in a real estate transaction is just too many cooks in the kitchen. There are always many cooks in the kitchen when it comes to a real estate transaction, regardless of how many agents there are – attorneys, mortgage brokers, banks, inspectors, contractors, insurance companies, etc. Adding a buyer’s agent doesn’t make this problem worse. On the contrary, the buyer’s agent is the one whose responsibility it is to tie all the other parties together and mediate them on behalf of the buyer! To say it another way, the agent isn’t another cook in the kitchen – he’s more like the manager, making sure that all the cooks do their job.
Misconception 7: If I hire my own agent, he’ll constantly be “bugging” me to buy a house. That’s not the way I operate. I always tell my clients if they don’t want to hear from me anymore for any reason, that I’ll stop communications with them right away.
Misconception 8: If I hire you as my buyer’s agent, I’ll need to commit to you for longer than I’m comfortable for. You can hire a buyer’s agent for as long or short as you want to. In the SC agency contract, you can write any length of time that you feel comfortable with. In other words, if multiple months is too long for an agent to represent you, then you can hire that agent for one month, one week, or even one day! Once the term in the contract is up, you are no longer obligated or committed to work with that agent.