Don’t Hate the Buyer’s Agent!
Money Magazine senior writer Stephen Gandel apparently doesn’t trust buyer’s agents. From his article on CNNMoney Mr. Gandel tries to convince the reader that your buyer’s agent is really working for the seller and not necessarily looking out for your best interest. Since the buyer’s agents are showered with so many incentives they will push those houses to their buyers over all other homes…overlooking what the buyer really wants or needs.
Now I cannot speak for all agents out there, and I’m sure there are agents who do exactly as Gandel accuses, but I want to believe (call me naive) that the majority of agents out there remember their duties to their buyers and are working on the behalf of their buyers to try and find and help them buy the best house for them at the best price. Would you as the buyer feel cheated if the perfect house for you that you got at a screaming deal just so happened to also pay your agent more than the traditional commission? I kinda doubt it. If you would feel cheated, how would you feel if the perfect house for you that you got at a screaming deal paid your agent far less than the traditional commission? Your agent shouldn’t care too much either way. For me as an agent, the goal is to find you the right house, in the right location, for the right price…and be thorough. As in any business, do it well and do it right, the money will follow. If you don’t trust your agent to do this for you, …then find another agent. Having a trusting relationship with your agent is imperative!
Okay, in response to the three things that Gandel tells buyers to do.
1. Go it alone. yah..wrong. ! Today’s tech savvy buyers are …believe it or not…more technologically inclined than most agents. Buyers are and will look up listings they want to see and the agents job is becoming more and more helping the buyer sort them out and then guiding them through the whole process of buying a house. For most folks, it’s a daunting and scary process…a process of a whole bunch of unknowns and firsts. If the buyer wants to see a property that pays less than the norm, then that’s how the dice falls (to a point…more on this later). My job as your agent is to still do my job. Many listing agents would jump on the chance to represent the buyer as well so they could…as Gandel says… collect both sides of the commission. This …as cool as it sounds for the agent … does neither side of the transaction any justice. Usually to do this, the agent will have to get written permission from the seller and the buyer. In practice, I try to avoid these situations unless it works to the best interest of all parties. Gandel’s suggestion to ask for 3% off the final price cause “if you did the work; you deserve the rebate” makes me wonder where he gets his ideas from. If you are an unrepresented buyer trying to buy my listing, chances are extremely high that I will end up doing the work for both sides, so there’s slim chance I’ll simply negotiate down the sale price cause you are unrepresented. In reality, my first reaction would be to recommend the unrepresented agent to go get an agent. Don’t go at it alone.
2. Set the Fee. Bad Idea. This one is easy. Try it. You as the buyer could get screwed and have to pay your agent out of your own pocket. Look at it this way. Gandel wants me to set what my fee will be (percentage wise) and guarantee it for every house. Fine. Let’s take the average commission being paid for all the listings in the area. Assume it calculates out to be 2.75% We go look at a house that’s paying only 2.5%. Well, sorry mr. buyer, but you made me guarantee a 2.75% commission and that is what I will expect. Are you going to now make up the difference? The fee the buyer’s agent gets is really between the listing agent and the buyer’s agent. If you the buyer wants to know for each house, …ask your agent! Again…going back to this trust thing …there’s nothing wrong with asking what your agent is getting paid, but really, the focus should be on finding you, the buyer, the right house.
3 . Put it in dollars. Not sure how this is different than #2. Not sure how successful you’d be in trying to get this negotiated as well. Gandel shows his lack of understanding buyer agency when he claims that by setting a set dollar amount the buyer agent will have no incentive to show overpriced listings or discourage the buyer from negotiating the price down. If I’m finding you the right house at the right price …I should be showing you the overpriced houses ..cause it might be the right house and because it’s overpriced, we have a fair chance of negotiating it down to the right price. For instance, if we found the right house and it’s $20k overpriced according to my research, well we’ll obviously be trying to get it at the right price, otherwise I’m not doing my job. Besides, 3% of $20k is $600 bucks. The per transaction fees I have to pay are on upwards of that much. An agent is not going to turn you away from clearly the right house over $600 bucks. If they are … so sad. Go find an agent that will actually work for you.
Folks, keep in mind here. The agents don’t get a dime until your house is successfully closed. If you as the buyer get any inkling that your agent isn’t bleeding for you, then find someone else that will. There’s lots of agents. (Lynnwood has about 1100 licensed agents. I couldn’t count how many there were in Bellevue.) As for me, if you’re not happy, then I’m not happy and we keep looking till you are happy. It all goes back to trust. Gandel clearly doesn’t trust the buyer’s agent. Maybe he had a bad experience. There are thousands of agents and most take their job very seriously. It is how many folks, including myself, keep a roof over their head and provide for their families. Which is much too precious to risk doing a bad job. You gotta trust whom you work with. If you don’t, find someone that you can trust.
I forgot to expand on what I meant in my response to Gandel’s first suggestion. If the property a buyer wants to see is offering less than the normal commission, then it is my philosophy that I still work my butt off to make sure it’s the right house and we get it at the best price possible. There is one caveat. Very very rarely, a listing agent will offer nothing or a nominal amount to the buyer’s agent. Listing agents are taught to say certain things when a seller balks at the commission. Something like, “my commission is 3%, what do you want to offer the buyer’s agent?” And if the seller says give them nothing, and the listing agent has the guts to do that, then right away, the listing agent isn’t working for the seller anymore cause that agent has already drastically hurt the chances of getting the property sold. So this is the caveat. If the house that my buyer’s want to see or buy is one that offers nothing or essentially nothing to the buyer’s agent, that has to be brought up immediately…like…before we even go look at it. I’ve never been in this kind of situation yet. Maybe folks reading this can comment. What do you think you’d do if a house you wanted to see was offering your agent absolutely nothing? Your agent should be paid somehow, ..would you as the buyer be ready to pay your agent directly? Probably not. That plus the fact you’ll have a pretty tough time finding an agent that will work with you for no money (remember, each agent has to pay various fees on each contract…so if he’s not getting paid, he’s paying out of pocket to work with you, and that kind of backward business practice won’t work). I would guess that we’d simply move on to the next house.
Our buyer’s agent was fantastic! It’s probably all just a matter of finding the right one looking out for your best interests. Ours was endlessly patient, never pushed us to change our price range, etc. They’re definitely out there.