Should you work directly with the listing agent as a home buyer in New York City?
We'd demystify this topic in the following video.
In case you're not familiar, I'm Chris from Hauseit.
Hauseit is the largest for sale by owner and a buyer commission rebate company in New York
City.
If you ever have any questions about buyer about buying or selling in New York City,
and you want to learn about how you can save money on broker commissions and closing costs,
please don't hesitate to reach out and drop out a line at team@hauseit.com, spelling is
below www.hauseit.com.
The short answer is no.
By working directly with the listing agent, you aren't able to save any additional money
in the vast majority of cases.
That's because the listing agent has a agreement, a listing agreement with the seller that stipulates
a specific amount of commission for example 5 or 6% of the sale price to be paid regardless
of how the buyer is procured.
As a result, if you come in direct the listing agent will simply collect all 5 or 6% in our
scenario of the commission.
Another reason for why you should not work directly with the listing agent, is because
of the dangers of dual agency.
If the listing agent convinces you to do dual agency, that means he or she will presume
to represent both you and the seller in the transaction.
As you can imagine, representing the interest both the buyer and the seller simultaneously
is a difficult proposition indeed.
How can a listing agent or in this case a dual agent properly represent both parties
when he or she will be in constant communication with both the buyer and seller presumably
a daily basis?
Any information shared between the parties maybe detromental to one party or the other.
Both of whom are the listing agent or the dual agent's client.
Another important reason for why you shared not work directly with the listing agent is
the inability to save money through a buyer agent commission rebate.
If you forfeit the right to a buyer agent not only do you forfeit the right to free
advice in guidance but if you've signed up for a Hauseit buyer closing credit, your Hauseit
affiliated buyer agent would have been able to provide you for up to 2% of the purchase
price back to you from his or her split of the buyer agent commission at closing.
Lastly, what about this?
You say that sounds great at all but I feel like I can get a better deal by going directly
with the listing agents they seem to be very happy to work with me to direct.
Perhaps because of the prospect of earning double commission as unfair as that maybe.
What if I decide to negotiate directly with the listing agent and skip any middleman altogether?
Well, the danger with that logic is you have no way as a buyer to verify the actual commission
structure and what is done between the listing agent and the seller.
For example, you will not have access nor will they likely ever share the listing agreement
with you.
So you'll have no idea about the actual commission structure.
If the listing agent tells you of course verbally that you'll save say 1% to 2%.
Whatever it is, if you decide to work directly with them.
Well, the question is how do you verify this?
Presumably, the listing agent spoke with the seller verbally again and you have no way
to verify what was said.
What if the listing agent simply got the seller to reduce the price?
How you ever know that you were actually able to save anybody versus if you work with a
Hauseit affiliated buyer's agent.
Not only will you get great advice and guidance throughout the process, which is well worth
the 1% that the buyer agent would receive but you would get a guarantee that 2/3rds
or 2% of the buyer agent commission.
Again, these are just hypothetical numbers we do want to state that commission rates
are varied.
They are negotiable between the seller and the listing agent and they are never specific
number.
But with that said, it seems much more logical to get the majority of the buyer agent commission
contractually to get free advice versus hoping to get some sort of alleged discount by working
directly with the listing agent under dubious dual agency circumstances.
We hope you found this video helpful.
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And of course if you are buying or selling property in New York City as well as Westchester,
Hudson Valley and Long Island, please don't hesitate to drop us a like at team@hauseit.com.
You can check us out at www.hauseit.com and we hope to hear from you.
Thank you!