You make excellent points about why open houses are still a staple of the buy/sell cycle - especially in today’s market. And yes, working for both the buyer and the seller IS a conflict of interest.

Michael

There are some less than full service real estate companies that will list a property for a seller for a reduced fee. With these type of companies, the savings comes from their reduced marketing on behalf of the seller. They do little other than listing the property on the MLS. The reduced fee has nothing to do with the buy side - any buyer’s agent can show a reduced fee listing. Problem is, most agents are going to show 6% and 5% properties before they show the 2% property. That’s just human nature. Foxton’s was one example of a reduced fee brokerage. They went bankrupt.

Any realtor sitting on an unsold property for 15 months doing open houses every Sunday must not be a very good realtor. For what ever lenght of time a listing is active (which averages 90 days in Hoboken right now, less in Manhattan), a good realtor will use that time for his or her advantage, as I explained above. 15 months? What’s wrong with the unit? What’s wrong with the realtor?

You may have gotten a great deal. Your unit may have been sitting unsold for a long time. In your case, a realtor may not have added much value to the process. What often happens, however, is that a buyer is working with a realtor. A new listing comes on the market and it’s a great property. Who do you think learns about that listing first? The person looking on their own or the loyal customer who immediately gets a text from the realtor saying “we have to go see this one right away”? Sure, there is more inventory on the market than last year but the good properties still go fast, often before an open house is even held.

-Lori

Additionally, when a property sits unsold for 15 months, and the Realtor has ruined many of her own Sundays sitting in an empty kitchen at an open house - you can rest assured she is working extra hard to lower the expectations of the seller rather than trying the convince the buyer to bump up their bid.

While your seller claims to have “been able to come down 15K”, you really don’t know how much they might have ultimately accepted had you had your own agent negotiating for you, regardless of the shared 6% commission. One possible protection a buyer can secure in this situation is to hire a real estate lawyer to negotiate on the buyers behalf during the offer process.

Also, the offer and acceptance is only the very first step of a deal. Who is representing you during the rest of the process? Perhaps your attorney but, believe me, I’ve seen many attorneys do a woefully inadequate job of due diligence. What is problems arise during the home inspection? Or with the condo docs? The realtors are the only ones in the transaction who do not get paid a penny unless the deal closes. They have an incentive to work out problems that may arise. The attorneys collect their $1,200 or so even if the deal dies.

So working directly with a listing agent may or may not save you money - there is no real way to know. Many buyers, especially first time buyers, are wise to avoid that route.