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4 Myths about Buying a Home Directly Through a Listing Agent

4 Myths about Buying a Home Directly Through a Listing Agent. 0

Anxious home buyers have some mistaken beliefs about how to succeed, according to a recent article by Bernice Ross in Inman News. Ross reported that too many buyers are omitting the representation of a buyer’s agent. Instead, they are contacting individual listing agents about homes for sale, and making offers directly to them.

This approach is based on myths and misperceptions, and it has serious drawbacks! Here are highlights from Inman News, along with our own insights!

1. Buyers may think that the listing agent will pass some of the sales commission back to them in the form of a closing credit. However, per the sales contract, the seller is the one paying the sales commission – not the buyer. If there were any commission “savings” the seller would expect to receive them. Plus, regulations faced by agents and lenders would make such rebates more trouble than they’re worth.

A “buyer commission credit” makes no sense in today’s market. With so many buyers competing for properties, why would a listing agent give preferential treatment to one particular buyer - while cutting their own commission to do it?

2. Buyers may believe that by using the listing agent, the home will sell for a discount, because there’s only one agent in the deal and the seller saves on commission. This is false! The commission rate paid by the seller stays the same; the home price isn’t reduced when no other agents are involved!

3. Buyers may think that making an offer directly to the listing agent means their offer will be prioritized. This is untrue. The listing agent is obligated to present all legitimate offers to the seller. As a buyer, working directly with the listing agent doesn’t provide any leverage. In fact, it creates huge disadvantages!

4. Buyers may believe it’s ok to pass up their own representation and work directly through the listing agent. Untrue! A listing agent’s loyalty is to the seller, even if he or she agrees to also “represent” the buyer. When the agent represents both the buyer and seller, it creates dual agency. Buyers in this scenario are effectively going through a middleman who cannot put their best interests first.

Home buyers who forgo their own representation risk overpaying for a home, and risk putting themselves at a serious disadvantage when it comes to negotiations and contractual matters. This creates tremendous financial and legal risks! Only Exclusive Buyer Agents provide fiduciary representation to buyers, serving their best interests at all times.

Using an Exclusive Buyer Agent gives you the best advantages for home buying success! Call 800.986.2322 for referral to your local EBA today!