Should buyers use a Realtor? Don't make this buyer mistake!
I totally get it. I hate the “cheesy” annoying and pushy sales person. When I am shopping for something and the salesperson comes by, I usually immediately and reflexively respond “No thank you” when they offer help. Undoubtedly, I could have used some help, and now it just feels weird to have to come back to them and ask for help. But, a good salesperson will always help bring you in to the sales process, educate you, provide value, serve you, and maybe even befriend you. At no point will they ever sell you.
A real estate agent has a responsibility to their client, different than many other professions. Real estate agents have a “fiduciary” responsibility to their clients that they represent, regardless of whether they are assisting in purchasing or selling. The fiduciary responsibility is broken down into six main duties or obligations:
- Accounting – agent is responsible for all funds entrusted to them by the client; they shall not commingle client funds with personal or business operating funds.
- Care – agent must use all of his/her skills and abilities to the benefit of their client.
- Confidentiality – agent must keep all information shared with them by their client in confidence and they shall not disclose any information that would negatively affect their client in the negotiation of the transaction (excluding facts that are material and the agent is obligated to disclose).
- Disclosure – the agent shall disclose all information to their client that they receive that is beneficial and pertinent to their in the transaction
- Obedience – the agent must obey all (legal) directives and orders given to them by their client.
- Loyalty – the agent owes UNDIVIDED loyalty to the client and puts the client’s interests ahead of their own at all times.
The issue that presents itself when a buyer elects to not have their own representation is that they are in fact getting representation anyways, albeit just a limited amount. When the listing agent of a property represents the buyer they are acting as a “dual agent”. A buyer (and seller) have to sign specific documentation alerting them of this limited dual representation.
When you think of it intuitively, how would an agent be loyal to both the buyer and the seller at the same time? The listing agent first signed a separate agreement (listing agreement) with the seller. They have been acting in the best interest of their seller from day one. How would they have an undivided loyalty to their client when they have two? I would argue that it is pretty tough. For an agent it is definitely a grey area and they must walk a very thin line.
The buyer (typically) pays no commission when they purchase. The seller (generally) is paying for the commission on the deal which is then shared with both listing agent and selling (buyer’s) agent. So if you have a free commission available for your own representation, why not take it? It just doesn’t make good sense.
If you disagree, have questions, or would like to understand more, please comment below or reach out to me. And, if you’re looking for some representation click the link below and send me a text. We can sit down and discuss how we will work to aggressively represent your best interests at all times.