Do the benefits of a buying agent outweigh the cons?

[Bin Chen]

What is the point of having a buying agent when you can find houses yourself on sites like redfin or Trulia? I keep hearing that they can get deals straight from the MLS but don't all listing on the MLS get posted on those sites?

Doesn't having a buyer agent hurt you in closing? If the selling agent is the dual agent then they don't have to do a commission split. They will be more inclined to help you close. Weither or not this is ethical is a different topic but it happens and I feel like that's highly beneficial for the buyer.

Am I missing something? I've never used a buying agent before and have always just contacted the owner/selling agent directly. Just trying to find out if I'm missing something (I'm in the New York city market if that matters)

[Jason Lee]

I'm and agent in NYC.

There's a huge difference between being the listing agent who is a dual agent (represents both the seller and buyer), and being the listing agent who has the seller as a client and the buyer as the customer. When I have been the exclusive listing agent I have never been a dual agent. My fiduciary duty is always to the seller, any unrepresented buyer is just my customer (I owe them honesty, etc, but there is no fiduciary relationship). I have every buyer sign the agency disclosure where I tell them straight up that I represent the best interest of the seller and the whole time I'm trying to get the seller the best deal. If I had an existing buyer client that was interested in one of those properties I would have to do dual agency but that situation just hasn't come up and I'm glad it hasn't. I just don't see how I could have a fiduciary relationship with both the buyer and seller at the same time. Or, if another agent from my firm brought a buyer to my listing then it would be dual agency. That's probably the more common scenario but in that case both buyer and seller are at least represented by two different agents (albeit from the same firm) and so no one is confused. In the end most unrepresented buyers think they are being "represented" when in fact they are not. There's a big difference.

There's also a misconception that agents see unrepresented buyers at their listing and they automatically think dollar signs, thinking they're going to make twice as much. Not true. For one, listing agreements are often negotiated where the commission is different if it's a direct deal or co-broke. I've never made a deal for the seller that wasn't the best deal for them because of the commission. I'm not saying it never happens but I just don't see it. Next and perhaps more importantly, when a buyer is not represented I have no idea if they are qualified and very often they are not. There's a saying (I didn't make it up) that "buyers are liars." I've had all kinds of offers come in where the buyer ultimately didn't even come close to qualifying for the purchase and their true financials where no where near what they initially stated. In most cases they're not trying to be deceptive, they just have no clue how lenders or co-op boards, etc underwrite and look at debt-to-income etc. Also, in my experience, it's typically much easier to negotiate with another agent. There's usually no emotion involved and we're just trying to get to a meeting of the minds, and I know the buyer's expectations are being managed. It's typically a smoother deal.

When I represent buyer clients I'm 100% trying to get those clients the best possible deal and mainly trying to keep them from making both small and large mistakes. For inexperience buyers, buying real estate is a complex transaction and they want their hand held by someone who does it day in and day out. For my experienced or high net worth clients, I'm running numbers and screening through hundreds of listings because that usually isn't the best use of their time. I'm negotiating and navigating deals all day, every day, and so there's just not a lot that I haven't seen. I've talked my clients out of deals because I knew they would be making a mistake and I've convinced my clients to pull the trigger on deals they dismissed because they didn't have the vision to see how it could be a great deal for them. I'm also licensed at 3 different brokerages in 2 states (NY and NJ) with over 1,400 agents total. I regularly hear of pocket and off market listings that never hit the MLS and most of those deals have ended up being the ones that are most attractive to investors. Btw, in roughly half of my deals I am representing the buyer and my buyers get the properties they want, so I know my representing them is not working against them.

Lastly, if you're active on BP and the forums then you very likely know more about REI then most residential real estate agents (who mainly deal with retail clients). If you decide you'd like to work with an experienced agent in NYC who understand REI and how to analyze deals (brrrr, house hacking, ARV) then please don't hesitate to give me a shout.