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Will I Save Money if I Don’t Use a Buyer’s Agent?

The short and the long answer is no! In most cases, you will lose money, or worse, you might lose the home of your dreams. Many buyers believe that by eliminating a buyer’s broker, they will pocket that portion of the commission. Wrong! Sellers sign an Exclusive Right To Sell Agreement, a contract between the listing brokerage and the seller establishing the percentage of commission that is payable by the seller upon the sale of their property. These agreements also contain various terms and conditions that you, as the buyer, will not be privy to. The most common term is a 6% commission split between the listing broker and the buyer’s broker, if there is one. This may be the point where you think you’ve gotten that leftover 3%, but you know who does? The lucky listing broker! Now you’ve forgone the expertise and services a buyer’s agent can offer and unknowingly put more money into the listing agent’s pocket.

Now let’s look at another scenario. Let’s assume the seller and the listing broker agree to a small decrease in commission if the buyer is unrepresented; let’s say a 1% deduction. So, the commission goes from 6% to 5%. In this case, the seller will walk away with a percentage more which they can either keep or pass down to the buyer. Let’s say you’re under contract on a home for $300,000, and this situation arises. In the unlikely event that this scenario occurs, you’ve saved $3,000. That sounds pretty good, right?

First, the chances you’ve scored that great of a purchase price without representation are slim. You may think you’re a great negotiator, but realtors know how to interpret, articulate, and persuade, leading with comps and data you have no experience with or access to. Your agent may have recent sales in the same building or area, and they may have insider information that served them during negotiations. A great buyer’s agent does a lot of detective work using comps, networks, and established relationships with other brokers to investigate and weigh out the circumstances of other comps that aid in negotiation. It doesn’t stop there. Let’s look at some of the other ways you inadvertently cheated yourself:

Recognizing Issues that are Red Flags Before Making an Offer
An excellent real estate agent is an expert in home mechanics. They can spot potential costly issues that you won’t notice. They have solutions for things that may be problematic to you and are educated on the costs of updates and repairs that should be factors considered when drafting up your offer. You may be missing major red flags in a home or even passing up an otherwise great home you’ve overlooked because you thought the problem was a deal breaker.

Winning a Multiple Offer Situation
Besides the comps a buyer can pull on Redfin, a real estate agent has insider information that is crucial in interpreting the data involved during a negotiation. Also, coming from a licensed realtor, the data presented holds more weight and is received in higher regard than if an unrepresented buyer was presenting it. And, if you enter a multiple-offer situation without representation, your offer will likely land at the bottom of the pile. Most listing agents know that an unrepresented buyer will not get expert advice during difficult situations that oftentimes arise during the transaction. They’re turned off by buyers who willingly choose not to use a broker and will be less inclined to work with you knowing the steep hill they’ll have to climb, thereby going with an offer by a buyer with representation.

Inferior Position During Inspection Period
Without a buyer’s agent, you have no one advocating for you during the inspection process, and you may have even overlooked some red flags that agents are trained to catch. The $600 you spend for an inspector to find something that would have been obvious to a trained realtor will put you in an inferior position during the inspection because you risk focusing on issues that aren’t issues, thereby ignoring the ones that are. It’s also highly unlikely that you know what is considered a “reasonable” versus “unreasonable” request once you receive the inspection report. Post-inspection negotiations often break the deal because buyers may act unreasonably or make a request outside of what is considered customary practice. On the other hand, you may miss an opportunity to request a repair or a credit at the seller’s expense.

Here’s a true story: I had a listing where an unrepresented buyer requested $262,000 in credits, and my sellers immediately canceled the contract. The subsequent buyers who came through with an agent requested $3,200 in credits. It’s incredible how perception changes with expert advocacy. Of course, the unrepresented buyers came crawling back begging for a second chance, but it was too late – they lost their dream home. While this example is extreme, it’s a common pattern of events with unrepresented buyers.

Missing Opportunities
A quality buyer’s agent has access to off-market networks full of listings, also called pocket listings, that you’ll only know about if you’re represented. Some of the best homes sell without ever hitting the public market. Don’t miss your chance!

Missing Out on Great Recommendations
A good realtor has a network of professional lenders, inspectors, and attorneys they work closely with. These real estate professionals play a critical role in your home-buying experience; an incompetent one can quickly derail the transaction. Inspectors can be alarmists, the reports can be scary, and the wrong attorney can lack tact in approaching and discussing the issues. If you have an agent backing you, they can help interpret the actual significant problems, what they cost to fix, and what would be a reasonable ask of the seller. They might also advise when an attorney is pushing too hard or not pushing hard enough. And, if you have a capable team, you can’t go wrong.

The thought of saving money is always tempting, but when making the biggest purchase of your life and choosing something as important as a home, it’s a mistake to forgo a professional advocate. The right buyer’s agent will have access to exclusive off-market properties, relationships with other real estate professionals and vendors, negotiation skills and strategy, experience spotting significant issues during an inspection, and sound judgment and discernment that could prevent you from making the wrong decision. I love the saying, ‘You get what you pay for,’ but in this instance, ‘you get what you DON’T pay for!’


Written by Hayley Westhoff