Real Estate Myth-Understanding #2: “I can save money by negotiating directly with the Listing Agent.”
As long as the property is offered in the Multiple Listing Service (MLS), this is almost always FALSE.
By the time a property is listed in the MLS, the Seller and the Listing Agent have already executed a Listing Agreement that details the commission to be paid upon sale of the home. The Listing Agreement is a contract between the Seller and the Broker. It dictates the total compensation due to the Broker when the house sells, regardless of whether or not another Broker is involved in the transaction.
Once the Broker has an executed Listing Agreement, the Listing Sheet that’s advertised in the MLS creates the contract that dictates the commission (reward) that the Listing Agent will pay to the Buyer’s Broker for bringing a ready, willing, and able Buyer.
So if you’re looking for Phoenix real estate or Scottsdale real estate, unless special provisions have been created and/or you happen to find a Listing Agent who’s willing to cut their own commission, you will NOT be able to negotiate a lower price than if you had a Buyer’s Agent negotiating on your behalf. The Buyer’s Agent’s commission has already been factored into the sales equation.
A small number of agents draft special provisions in their Listing Agreements that reduce their commission if they find the Buyer, but such arrangements are very unusual today when slow turnover has increased marketing and holding costs.
Besides contractual factors, there are several other reasons to leverage the skills of a professional Buyer Specialist:
–Market Knowledge: A busy Buyer’s Agent will preview several hundred properties per year, so they will have an intimate knowledge of property values in various communities and will be fully ‘in-tune’ with current real estate market conditions, giving them a natural advantage over any non-Realtor® who doesn’t have the time to closely track real estate market conditions.
–Access to Specialized Information: Realtors® invest in technology tools that allow them to ‘dig deeper’ into the details of any given property or community. When properly analyzed, this information can be used to put together a very compelling story to support your offer price.
–Specialized Training: Many full-time Realtors® attend negotiation workshops and seminars and have refined their skills on the job. The best of them engage in on-going training so they’re prepared to secure for you the best possible terms.
–Knowledge of Contracts and some Real Estate Law: There are many terms of the Purchase Contract and Addenda that can be negotiated. Some are financial and some logistical. An experienced, full-time Buyer’s Agent knows what these items are and how to ‘weigh them’ and where to ‘push and pull’ to get a favorable offer accepted. Furthermore, a good Buyer’s Specialist will have enough experience to spot potential pitfalls or deviations from the norm before they have a chance to adversely affect the transaction.
Obviously, you don’t need to work with a Realtor® to purchase a property. It’s something you CAN legally do on your own. However, there are very few instances where self-representation will benefit you more than hiring an experienced professional to advocate your interests. An experienced Buyer’s Agent will not cost you a dime, but will offer you an arsenal of tools to position you for success from start to finish.