I met a potential buyer at one of my listings for a showing the other day. He had driven by the home and wanted to see the inside. After the showing we talked for a bit and I found out that he and his wife have been looking at homes since last July and they’ve been doing it on their own, without the help of a buyer’s agent. I’m always curious as to why some people choose to try to do it alone so I asked him. He said he thought he and his wife wouldn’t have to pay full price for a home since they weren’t using an agent. I asked him to explain a little more and he said, by not involving a buyer’s agent and by calling the listing agent directly, they’ll sell the house to us for less because they don’t have to pay a buyer’s agent. Aha, now I understood his rationale.
Unfortunately, that is typically not the case, and here’s why. I’ll use my listing that I was showing him as an example. In the listing agreement I have with my clients, the sellers, it states that they will pay commissions of 6% of the sales price. 3% goes to me, the listing agent, and 3% goes to the buyer’s agent. If someone calls me directly about the house and they are not working with an agent, if they like the home enough to make an offer, I also become the buyer’s agent. It’s called dual agency. The seller is still going to pay the 6% commission but instead of splitting it between 2 agents, they pay me the entire 6%. So the seller is not saving any money, therefore there is no savings to pass on to you. Furthermore, you might end up paying more by NOT using a buyer’s agent. Part of an agent’s duty is to negotiate on your behalf. They will provide you with information on recent sales prices of comparable homes to help you decide what you should offer. I was surprised when this buyer said he and his wife “wouldn’t have to pay full price” since they weren’t using an agent. It is extremely rare that any buyer pays full price for a home, especially in this market. So not only will he probably not save any money by trying to purchase a home on his own, he might end up paying too much.