Buyers are often totally clueless about the realities of the Hoboken real estate market. It’s my job as a Realtor to try to educate and guide them, but sometimes people don’t want to listen. They think they know better, even though they are often first time home-buyers, and I’ve been doing this every day for 12 years. Let me give you a recent example.
I had a very busy open house weekend a few weeks ago – over 50 visitors. It was a new listing and the week following the open house the sellers had almost a dozen offers on the property. One of them was from a buyer who came to my open house without an agent. He decided to make an offer, which I was more than happy to write and present to the sellers, but from the onset I knew it was way too low to be competitive. In situations such as this, I am working as a “dual disclosed agent”, and our Realtors code of ethics (as well as my own personal standards of conduct) require me to be fair to both parties. As the listing agent I am not at liberty to give the buyer any inside scoop on what he would need to offer to win the bid. I offered advice and suggested that his offer might not be high enough in a multiple bid situation to win, but I’m not allowed to tell the buyer what others have bid (even though I know what it would take and were I to help him win the bid, I would double my commission.) His offer was not accepted.
I called him to tell him he did not get this property but told him that I’d be delighted to help him find another. He replied “oh, I only work with sellers’ agents directly”. I asked, just out of curiosity, why is that? He said he thought that by working with the sellers’ agent, that agent would be willing to cut his or her commission so he would have a better chance of getting the deal.
Successful agents in today’s market have no need to cut their commission! Zero. None. I do the best I can for my seller (which is my fiduciary obligation) to obtain the highest price for the seller, most down payment and best terms possible and sell something else to the buyer, rather than reduce my compensation.
Not only that, it’s not at all uncommon for sellers to ask an agent if they would be willing to discount their commission should they bring their own buyer. After all, the seller is the person paying the commission, not the buyer. If an agent has already agreed to reduce their commission to obtain the listing, does the buyer really think the agent will reduce it further to help him? The agent will make more money selling the listing to one buyer, and selling a different property to the buyer.
Buyers who deal directly with listing agents are foregoing their right to have a buyer’s agent represent them, offer advice and negotiate on their behalf. They are in fact engaging the sellers’ agent, the person who’s primary fiduciary obligation is to the seller, to represent them.
Honestly, when buyers tell agents that they prefer to deal directly with listing agents, agents laugh at them afterwards. Buyers who think they are going to game the system and outsmart an agent are not very smart themselves.