The B.C. Real Estate Association (BCREA) says the mortgage stress test introduced by Ottawa one…
“If I buy directly through the Seller’s Agent, will get a better deal?” is a question that real estate agents often hear from potential purchasers at open houses. We get it… We like deals too!
The buyer’s logic is that he or she will save money on the purchase because the Seller will no longer be required to pay a buyer’s agent. Therefore, this portion of the commission will be taken off the price or given to the buyer.
But what do you really gain by cutting out the Buyer’s Agent?
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Speaking with dozens of agents in Vancouver over the years, the clear majority seem to support the perception that the buyer is “getting a great deal” but, in actuality, the savings are almost always passed on to their client, the Seller. The Seller’s Agent has one job: to work for his or her client, the Seller. This means getting the Seller the highest price possible and the best possible terms.
So, in our humble opinion, there’s almost no good reason not to use an agent when buying a home.
Here are what we consider to be the three most compelling incentives for why home buyers should use the services of a licensed Realtor®:
- The majority of Sellers will be using a Realtor®. Therefore, they will have an expert representing them at all times to ensure that their best interests are protected. If you are trying to negotiate with a Seller in this position, you will always be at an unfair disadvantage. Find an agent who will provide you with the same level of expertise and commitment that the Seller is receiving to ensure that your interests are protected.
- Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Transactions today typically exceed $500,000. If you had a $500,000 law suit on your hands, would you deal with it without the help of an attorney? If you had a $500,000 income tax audit, would you attempt to deal with it without the help of an accountant? Make sure you have a professional to ensure that you are protected and properly advised throughout any transaction. It will save you time, money, and stress.
- In the majority of cases, the Seller pays both ‘sides’ of the commission. Real estate fees for both the Seller’s Agent and the Buyer’s Agent are typically included within the sale price, and that since the funds for the sale are going to the seller, the buyer should note that their agent will be paid from the proceeds of the sale. This means that you, as a buyer, are not on the hook to pay your agent any money on top of the purchase price. In the MLS Listing Agreement, signed by the seller, there is a commission schedule that identifies a percentage of compensation for your agent taken from the purchase price. There is no “standard” commission, and it may vary drastically, but note that this is how most Buyer’s Agents are compensated for helping you navigate the market, find you a property, negotiate favourable terms, execute bullet-proof contracts, and carryout due diligence. What a deal!
Considering how little you have to lose and how much you have to gain, it would be ill-advised to consider purchasing a property without the professional assistance of a licensed REALTOR®.