Sunday, March 21, 2010
Buyer's Representation is Free, Free, Free!
I recently had a friend call me after he had entered into a contract on a home, only he used the listing agent to represent him,as the buyer. He thought that by using the listing agent with a cash offer, that he was more likely to get his offer accepted. Which may be true, since the agent will be double ending it--walking away with the full commission rather than just half. Can't blame the agent. Dual agency is legal in California. In most cases, an agent can represent both parties fairly...or so it seems.
Regarding commissions, the standard of practice in Southern California is the seller pays the full commission to their listing agent who splits it with the buyer's agent. Therefore the buyer who believes he is saving money and still getting the best representation, may be sorely mistaken.
Ironically my friend called me, someone he trusts, to ask if I knew of someone that could look over his paperwork. He hadn't used agent in his last real estate transaction and didn't understand all the paperwork. I had to explain to him that I could not, nor would any ethical realtor, review the paperwork after hiring the listing agent to represent him. This would be interferring with their agency and could land myself or the other realtor in hot water. So I had to refer him to a real estate lawyer. And they aren't cheap.
I explained that the next time, he would be better off hiring a separate agent to represent him and then he would feel like someone is really looking out for his best interest. Often the listing agent has established a relationship with the sellers, making it difficult to be impartial; as well as it is often difficult to keep certain confidential information from slipping out.
While I have done dual agency in the past, and believe that in certain circumstances it may be a good way to sell a more challenging home. However, I firmly believe the best way to buy a home is with your own FREE representation.
ABR, CRS, e-Pro, GRI, SFR
Coldwell Banker Residential Brokerage