On the surface all real estate agents seem alike. Most buyers don’t understand the difference between a listing/seller’s agent and a buyer’s agent. Further, they have no idea in what capacity these agents are acting; a single agent, a transaction broker or who represents whom in a transaction. It’s important that consumers know the difference.

A Single Agent represents either the buyer or seller but not both parties. A Transaction Broker represents both parties but in a limited fashion, basically, a middleman facilitating a deal/transaction. It’s a little more involved than this but you get the basic idea.

There are many misconceptions when it comes to real estate agents which are detailed below.

MISCONCEPTION #1

There’s no cost to the buyer for the services their real estate agent is providing, it’s ‘free’ because it’s the SELLER who’s paying all the agent(s) involved.

WRONG!

THE TRUTH:

On the contrary, this charge for the buyer-agent services is unquestionably BUILT-IN to the selling-price. That is, the selling-price has usually been set HIGHER to cover this particular charge. And, as a result, it’s YOU—the BUYER—who ends-up paying it. And typically this charge is thousands-and-thousands of dollars.

Though ON THE SURFACE it may appear that there is no cost to the buyer, the fact of the matter is the seller of a home listed on the MLS (’Multiple Listing Service’) — or alternatively the builder of a new-construction home — typically pay the buyer’s agent (YOUR real estate agent) a commission of up to 3% of the sales price of the home being sold. A sum which is then factored into THEIR asking price. Which means that YOU’re the one who’ll ultimately be shelling-out the money to cover this charge!

Unfortunately, many real estate agents promote this misconception and advertise “free buyer agent representation” which is really a disservice to the consumer and the real estate industry. Buyer agents provide a valuable service

MISCONCEPTION #2

You don’t need a separate ‘buying agent’ to represent you, because you can go DIRECTLY to the real estate agent who’s advertising the property for the seller–and maybe even save some money by doing this.

WRONG!

THE TRUTH:

While certainly nothing PREVENTS you from dealing directly with the real estate agent who’s representing a sales-offer of a particular property on behalf of a seller, it’s NOT really in your best interest to do so.

You see, when you respond to an ad in the newspaper or to a posting on the Internet, you’re dealing with the ‘listing agent. The listing agent represents the SELLER and the seller’s interests—EXCLUSIVELY in most cases. Their job is to get top dollar for their client, the seller. Their job ISN’T to get you, the buyer, the best deal. That, on the other hand, is the objective of a ‘buyer agent.’ If the listing agent were to give anyone a break it would be their client, the seller.

In a manner of speaking, when you therefore do go directly to the listing agent as a ‘buyer’, it’s really akin to asking the same attorney to represent two opposing parties. But with your OWN ‘buying agent,’ you are ensuring that you DO have someone with experience and expertise in YOUR corner, who can look out for YOU and your interests—and who can negotiate the price and related details of the transaction on YOUR behalf.

MISCONCEPTION #3

Listing agents have EXCLUSIVE listings of homes which can be shown-and-sold ONLY by them alone.

WRONG!

THE TRUTH:

Some listing agents might indeed want you to believe this and might even try to steer you into such a belief, but this just ISN’T true. Many home buyers wind up wasting time searching online and through various publications as well as calling each listing agent to be sure they don’t miss out on a listing.

The fact is ALL listing agents post their ‘listings’ on the MLS, to which ALL real estate agents in turn have immediate access. And in the greater majority of all home sales transactions, there are indeed TWO real estate agents involved: the seller’s….AND the buyer’s!

Hiring your own buyer agent will save you a lot of time wasted searching for listings and calling individual agents. A good agent will provide access to ALL the listings that meet your criteria, without any filters or bias.

MISCONCEPTION #4

I can get a better deal if I buy a home through a For Sale By Owner listing without the involvement of any real estate agents.

WRONG!

THE TRUTH:

In some cases this may be true but you may also find that you overpay for such homes just as often. Whether a home is listed on the MLS or By Owner, having a professional in your corner to determine the fair market value, negotiate contract details and to provide advice and counsel on any number of points of concern, ranging from seller disclosures to inspections and more can prove to be invaluable and actually save you money. Many have been the times I’ve seen people contract to buy “a bargain” only to find the home didn’t appraise for the agreed upon purchase price.

The bottom line is, if you’re buying a home, hiring your own buyer agent is the first thing you should do. One way or another you’re paying for the service so instead of wasting time and effort searching listings for countless hours and calling every listing agent in town why not choose a buyer agent to represent your interests. A good buyer agent will wind up saving you thousands of dollars.

(Please note that all aspects of this subject cannot be addressed in such a short article. Do your homework and seek the advice of a professional.)

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