If you are a Los Angeles home buyer having your own buyer’s agent is going to help immensely. You would presume that this would be the natural way to go right? Not really. I get so many requests from buyers trying to find the listing agent of a property because they either think they are going to get a deal or, at the very least, be the successful buyer. There are so many misconceptions along this line I feel I need to address some of them:
- You think that going directly through the listing agent they are going to be motivated to let you get the property, because they will get both sides of the deal and may give some of their commission back to the seller to add an incentive. There are a couple of things wrong with this line of thinking:
- Yes, there may be a few less than ethical agents who will find a way to move you to the top of the list, but most agents follow the Realtor® code of ethics which mandates fiduciary duty. That is the best representation for their clients, in this case the seller. They are duty bound to present the best offer. If you present the best offer the home should automatically become yours. If not then I would worry about what comes next.
- Don’t automatically think that the agent is going to lower his commission rate for the seller. This rarely if ever happens.
- What does it matter who represents you as long as you get the property? Here’s why it does: Remember who is paying the entire commission, the seller. Who is the seller’s representative? The listing agent. Are you still comfortable with that situation? If the listing agent or brokerage also represents the buyer, that is called “dual agency” (the brokerage owns the listing). Although legal in California, this practice is discouraged by some brokerages because of the conflict of interest. A listing agent may pass the buyer on to another agent in the same brokerage, but it is still dual agency. Of course you can’t prevent a natural dual agency situation if someone in the same brokerage has a buyer interested in the property, but that is a different situation.
- Having your own representation may have gotten you an as good as, or maybe a better deal. Did the listing agent really listen to your wants and needs. Or do you feel like you were somewhat pressured towards conditions that were not ideal for you. Remember, a buyer’s agent has your interests at heart, no one else’s.
- Negotiating the purchase contract is only half the process of buying the home, and may even be the lesser half. You will be required to do your due diligence on the property. Again, who is paying the commission here? This is is often a combative inspection phase of the buying process. You are trying to get repairs or credit for repairs which the seller does not want to give. Wouldn’t you want your own representative doing battle for you?
- One of the biggest negatives about both the seller and the buyer using the same agent is that that agent is going to know the motivation of both. It is very difficult for that agent to remain entirely neutral.
Yes, the housing inventory in Los Angeles is low, but assuming that you will be the successful buyer or get a deal if you use the listing agent needs further thought. One thing is for sure, you won’t get a deal. You may get the home, but at what cost?
Working with your own buyer’s agent is just as likely to get you into the home without giving up control. You will feel good that your interests were taken into consideration and protected throughout.
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