- Buyer Agency
Do you understand buyer agency? Most people don’t.
1.I am better off looking at listed properties on my own.
No, generally you are not. Every week, if not every day, we talk to home buyers who choose to work directly with listing agents or attend open houses in order to save the 3% buyer agent fee. While this IS true of our Flat Fee listings it is NOT true of traditionally listed properties. When you contact a listing agent directly, you are likely doubling their pay rate, not reducing the amount the seller is obligated to pay. Under most traditional contracts, the seller pays the full commission to the listing broker. If there is a cooperating agent in the process, the listing broker shares their commission. If there isn’t, the listing broker keeps it all.
2.I will ask for the 3% in my offer.
Sure, you can, but your offer to purchase does not trump the listing contract. They are wholly separate agreements. What does this mean? It means the seller will still pay the full commission to the listing broker no matter what you write into your offer (unless they were savvy enough to build a variable commission structure into their original agreement).
3.I will act as my own agent.
Sorry, you can’t. An agent is by definition someone who represents someone else. You, the buyer, are the principal in the transaction. You can choose to not have representation but you can never be your own agent. Even agents are not acting as agents when they buy properties for themselves. They are principals and are not automatically entitled to the listed buyer agent commission.
Buyer Agency Contracts:
Your buyer agent is contractually obligated to represent your interests in a transaction. That means there is a contract. So, what should you look for in a buyer agency contract?
Before you sign the contract, make sure Madcity Homes listings are excluded. That way you can contact our sellers directly and avoid the buyer agent’s fee. Of course, this also means you cannot see the property (or even discuss it in detail) with your buyer agent. You must act entirely on your own to avoid commission pitfalls.
You should retain the right to terminate your buyer agency contract at any time for any reason. This will allow you to look at new properties on your own or with another agent. You would still (of course) be obligated to your buyer agent for the properties that the buyer agent showed to you or discussed in detail with you.
Your buyer agency contract should specify how your buyer agent will be paid. A good buyer agent will accept whatever is offered by the selling broker and not require you to contribute additional funds. This means that from your perspective your buyer agent should work for free.