As a potential buyer, do I really need an agent?

Question

Since Zillow is already listing most MLS properties, along with the means to contact the agents who are selling them on behalf of their owners, do I really need my own agent to buy?

Larry Turowski · Answer

Different perspective here. I have not bought off the MLS in a long time. But when I did I never used a buyers agent. Why?

First off, I knew what I was doing and didn’t need the help of a buyers agent.

Second, in spite of the fact that the sellers agent has a fiduciary responsibility to the seller, the fact of the matter is they’d get both sides of the commission if I was the buyer. This made me an attractive buyer to them. I’ve had sellers agents advocate for my purchase offer and sometimes tell me where I needed to come in at to win.

Third, in a back-and-forth negotiation there is only one person between you and the buyer instead of two. This makes things it easier.

Fourth, and perhaps most importantly, this gave me the ability to develop relationships with many agents. I would let them know that I was an investor and I would ask them to let me know if they ever had any other deals that might be attractive to me. This essentially produced lots of bird dogging agents for me. Google “pocket listings.”

John Teachout · Answer

Might as well, it won't cost you anything.

Christopher Thompson · Answer

@Peter Kozlowski If you know the market and know how to structure a strong offer, then you certainly can go without a buyers agent. I've done it both ways successfully (with and without).  And, while everyone says a you don't pay for a buyer's agent, that's not really true.  The agent commissions are baked into the purchase price of the home.

If you're financing the home, you're financing the buyer/seller commissions -- just spread across 30 years.  If you're not using a buyer's agent, then you should be able to get the house at a lower price since the buyer agent commission should  be removed.   The problem is, you have listing agents push back and refuse to remove the buyer agent commission because they want to double end the deal.  IMO - this is morally wrong.  If a seller understood the situation more, they would push back and renegotiate the listing agreement for an unrepresented buyer.---For example very rough math---WITH BUYER AGENTPurchase Price: $1,000,000Buyer Agent Commission: $30,000Listing Agent Commission: $30,000-- Net to Seller: $940,000WITHOUT BUYER AGENTPurchase Price: $1,000,000Buyer Agent Commission: $30,000Listing Agent Commission: $30,000-- Net to Seller: $970,000As you can see, without a buyer agent commission, the seller nets more.  As a buyer, you can use this to your advantage as negotiation leverage.  Really, you should purchase the house closer to $970,000 vs. $1Me.g. WITHOUT BUYER AGENT @ lower purchase pricePurchase Price: $970,000Buyer Agent Commission: $30,000Listing Agent Commission: $29,100-- Net to Seller: $940,900 <--- seller still ends up netting $900 more

In the home I closed on in December, I didn't use a buyer's agent and negotiated directly with the listing agent.  We were in a multiple offer situation with all the other offers over asking.  I made an offer 10's of K under asking because I wasn't represented - and the listing agent agreed for my case the buyer agent commission wouldn't be included if my offer was accepted.  As a result, I paid a lot less than asking and the seller still ended up netting more money with my offer than the over asking offers.

As I mentioned above, I've also had other instances where the listing agent yelled at me because I wanted to represent myself.

At the end of the day, if you want to go at it on your own, show that you know what you're doing, build a good relationship with the listing agent and you really can save money representing yourself.  Chris Thompson

Homsby.com

Russell Brazil · Answer

If you are asking, then probably yes.

Keep in mind, just because someone is an agent, doesn't actually mean they are good. Hire a knowledgeable, rockstar agent.

Lee Ripma · Answer

@Peter Kozlowski

As other have said, if you really know what you are doing, you don’t need one. I had an agent on my first four deals. My fifth and sixth I didn’t. Now I am agent and have closed a lot of deals, I sometimes have an agent, sometimes not. When I’m buying in a new state it’s nice to have one, since state by state things can be very different. If an agent is the one bringing the deal, I use them. I also often hire a listing agent for my own deals. So even agents use agents. I’m always looking for ways to leverage the efforts of others who are awesome and/or can deliver great deals.

Charlie MacPherson · Answer

@Peter Kozlowski Unless you have significant experience in representing yourself, yes.

The seller's agent is a fiduciary for the seller.  That means that he represents the seller, not you.  He is required by law to put the seller's interests above everybody else, including yours and even his own.

You need a buyer's agent to do the same for you and to help you to navigate the process of paperwork, disclosures, inspections and negotiations.

Finally, the total commission is part of the listing contract.  The seller will pay the same commission whether you have your own agent or not.

Good luck!

Kevin Tian · Answer

As a couple people have mentioned, you don't need a buyer's agent and you can work it to your advantage. I think it's also good to point out that the buyer's agent isn't free as you can see from @Christopher Thompson's math.

Steve Milford · Answer

@Peter Kozlowski The point of Buyer's agent is not to only "open the door." Their primary purpose is to push the best interest of their clients. Having a third party in the transaction that doesn't have an emotional attachment is ideal, because they bring a dose of realty and keep other parties in check. This third party could be an agent, attorney, financial advisor, or any person that's going to be ok with giving you bad news. The ironic piece is that the Buyer's agent fee is usually paid by the Seller, so why wouldn't you take advantage of it? It aways cracks me up when someone tells me about a "win", and I ask them if they checked ... and they tell me, "Oh I didn't think to check."

When I represent Sellers, my job is to basically fight off the Buyer's agent, even though the Seller pays their fee, so they don't ask for crazy stuff and to keep them in check. I've seen experienced investors miss easy stuff.

But, then what do I know? I am just an agent lol.

Steve Miklashevskiy · Answer

@Peter Kozlowski a buyers agent doesn’t cost you anything, so why not take advantage of the expertise of a real estate agent who will walk your through the entire process?

Dave E. · Answer

@Peter Kozlowski guess you have to ask yourself why you wouldn’t want someone looking out for your best interest?  The agent works for the seller.

They can represent both sides, but ultimately the seller is the one paying them. So they may not have your best interests in mind.

As a potential buyer, do I really need an agent?

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