Authored by: Laurie Mindnich
January 15th, 2008
AN EAST END OF THE NORTH FORK, LONG ISLAND REAL ESTATE PHENOMENON
We’ve been noticing a very interesting pattern with respect to sellers and their understanding of buyer agency. The pattern appears to convey a lack of understanding.
When you list your home for sale, one of several things may occur. This segment deals with the real estate agent that shows your home, representing the BUYER, not you, the SELLER.
The MLSLI service on Long Island shows the commission being paid by the seller to potential real estate agents with buyers. With alarming frequency, there is a “O” or reduced amount offered in the MLSLI to the agents that represent buyers. By reduced, I don’t mean that it’s “too low”. What is seen is an amount paid to a real estate agent that brings a buyer, but agrees to REPRESENT THE SELLER- this amount- is often higher than the amount offered to the agent that provides a buyer, but REPRESENTS THE BUYER. In too many cases, the amount paid is “0″.
The MLSLI, and REALTOR.COM, is viewed nationally, both by real estate agents and consumers. This is a huge tool in selling your home.
In a typical buyer agency agreement, the buyer has an understanding that is COMMON PRACTICE: the costs to sell the home are reflected in the price of the home. All sellers build in the amount of payment to the real estate contingent (as well as other potential costs) that are involved in the sale- there is no secret here. If a seller has priced the home to include real estate agents that represent the seller only, the SAME DOLLAR AMOUNT IS TYPICALLY PAID out of the seller’s pocket.
Think you’ll get offered less, when a buyer is represented by a real estate agent? THINK AGAIN. If a home is priced correctly, based on market conditions, the fiduciary required on the part of a buyers agent is not compromised by offering fair market value, for a home that buyers really want. To the contrary; despite possible haggling, the end result is often no different than dealing with a real estate agent that “represents” you, the seller. BOTTOM LINE: getting the house sold should be at the top of the agenda for your listing agent, which would include ALL avenues of marketing exposure and reach.
Buyers Agency has been in place in most parts of the country for 15 YEARS or more. While initially balked at (the reaction was “why should I, as a seller, pay for the buyer to be represented”) it became clear that in most cases, good market or bad, buyer agency better protects both the buyer AND the seller.
SHOULD BUYERS HAVE TO PAY THE REAL ESTATE AGENTS? They do- it’s in the price of the home.
PRICING COMPROMISES OCCUR IN A SLOW MARKET. IT DOESN’T MATTER WHETHER THE BUYER IS REPRESENTED BY BUYER AGENCY. AS A SELLER, YOU CONTROL THE “SOLD” PRICE. Your listing agent should be competent enough to handle all offers, regardless of the source. The key is to GET OFFERS.
Consider this: if an agent (other than your listing agent ) shows your home (representing you, the seller) and makes an error in some form, YOU, as the seller, are accepting this representation (despite not having chosen the cooperating broker ). You, as a seller, already have representation, via your listing agent, and typically, your attorney. It became evident, in most parts of the country, that sellers didn’t need the potential liability of an unknown representative; buyers, on the other hand, needed representation.
Additionally, buyers KNOW that the fees are included in the price of the home. Just ask anyone doing a FSBO- often, lookers expect the absent fees to be deducted, when calculating an offer.
THINK HARD ABOUT ELIMINATING BUYERS AGENCY. THINK HARD ABOUT ANY REAL ESTATE AGENT, WITH FIDUCIARY TO YOU, THE SELLER, WHO COUNSELS AN ACTION THAT ELIMINATES BUYERS IN A MARKET BEGGING FOR BUYERS.
We’d love to hear your opinions on the practice of “eliminating” some members of the home buying community by eliminating their representation. Has your listing agent explained ALL of this to you, the SELLER?
If you have authorized your real estate agent to exclude buyers, you might rethink it.
Just welcome buyers and their representation in, and see what happens. Remember, YOU control the accepted offer.
We don’t want our sellers missing out on buyers, period. Buyer agency offers fairness to all, and less liability for you, the seller. Just our opinion, based on experience.
