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Listing Agent or Buyer's Agent: Which one is right for you?

Buying a home is one of the largest financial decisions that most of us will ever make. So why do most of us typically entrust this huge decision to someone who doesn't have our best interests at heart? Yet that's exactly what we do when we use a traditional real estate broker to assist us in buying a house.

For instance, Did you know that more than 95% of all real estate agencies are dual agencies, i.e., they represent both buyers and sellers? Because of that fact, whether they are representing the seller or the buyer, a dual agency broker is committed by law to the seller. What's more, since the traditional or dual agency broker is also a listing broker, it's in his or her best interests to sell you a house that is listed with his or her agency, whether it's the right house for you or not. As a result, you may not see all the listings you would like to see. And most importantly, you may not get the best home value available to you at the time you are looking to make a purchase.

Only a buyer's broker will show you all the houses that meet the criteria you specify, whether the houses are listed by a real estate agency or sometimes even privately by an owner. At the same time, your Buyer Broker will give you an objective opinion about whether a home is right for you or not. And since the Buyer's Broker is working only on your behalf, he or she will only reveal to the seller information that will benefit your bargaining position. Then, once you have found a home that you want to buy, your buyer broker will research the market, the seller and the property history to make sure you are not overpaying and that there are no hidden complications or problems. The net result? You get the house you want and in many cases pay less for it than if you used a dual agency broker, and certainly not more.

Just as important, it costs no more to use a Buyer Broker. That's because the sales commission on a house is actually two commissions: one-half to the selling or listing agent, and one-half to the agent who represents the buyer. On the other hand -- in so-called dual agency transactions -- two agents are involved who both work for the same side. In this case, although one is assigned to "work with the buyer", both are in fact committed to the seller by contract.

Why doesn't every house buyer use a buyer's agent? First, buyer's agents are a relatively new class of agent and most people just don't know they exist. Others are still learning about the advantages of using a buyer's agent. Second, the traditional seller's agent is not about to recommend an agent who will actively work to reduce the final price of the house.

Compare the services provided to a house buyer by a dual agency broker versus a buyer's broker.


SERVICES PROVIDED SELLER'S AGENT BUYER'S AGENT
Arranges home showings YES YES
Provides information YES YES
Explains forms and agreements YES YES
Monitors and updates closing YES YES
Prepares a property value study NO YES
Keeps your financial position confidential NO YES
Promotes and protects your best interests NO YES
Helps, when needed to assist you in securing the MOST favorable financing available NO YES
Negotiates best price for you NO YES
Negotiates best terms for you NO YES
Points out reasons not to buy NO YES
Passes on information to enhance your bargaining position NO YES
Assists in writing the offer in your best interests NO YES
Exposure to entire market, both listed, builders and For Sale By Owners NO YES
Provides anonymity if needed NO YES
Researches seller and property price history NO YES
Researches available new home product NO YES