Many people don't like the idea of doing a real-estate deal through an agent and think that direct negotiation between buyers and sellers is more transparent and allows the parties to look after their own interests better. This is probably true — assuming that both the buyer and seller are reasonable people who are able to get along. Unfortunately, this isn't always an easy relationship. What if you, as a buyer, like a home but despise its room arrangement, old-fashioned baths and damaged kitchen cabinets? If you are working with an agent, you can express your contempt for the current owner's decorating skills and rant about how much it'll cost you to upgrade the home without insulting the owner. For all you know, the owner's late mother may have lovingly chosen the décor. Your real-estate agent can convey your concerns to the seller’s agent. Acting as a messenger, the agent may be in a better position to negotiate a discount without ruffling the homeowner's feathers
A real-estate agent can also play the“bad guy” in a transaction, preventing the bad blood between a buyer and seller that can kill a deal. Keep in mind that sellers can reject a potential buyer's offer for any reason — including just because they hate his or her guts. An agent can help by speaking for you in tough transactions and smoothing things over to keep them from getting too personal. This can put you in a better position to get the house you want at a better priceThe same is true for the seller, who can benefit from a hard-nosed real-estate agent who will represent his or her interests without turning off potential buyers who want to niggle about the price.
Well, OK, actually theycan. But because they are licensed professionals, there are more repercussionsif they do than for a private buyer or seller. If you are working with alicensed real-estate agent under an agency agreement, such as a conventional,full-service commission agreement in which the agent agrees to represent you,your agent will be bound by law to a fiduciary relationship. In other words,the agent is bound by law to act in his clients' best interest, not his own.
In addition, most real-estate agents rely on referrals and repeat business to build the kind of client base they'll need to survive inthe business. This means that doing what's best for their clients should be as important to them as any individual sale.
Finally, if you do find that your agent has gotten away with lying to you, you will have more avenues for recourse, such as through your agent's broker or professional association or possibly even in court if you can prove that your agent has failed to uphold his fiduciary duties.
When a buyer and seller work together directly, they can — and should — seek legal counsel, but because each is expected to act in his or her best interest, there isn't much you can do if you find out later that you've been duped about multiple offersor the home's condition. And having a lawyer on retainer any time you want to talk about potentially buying or selling a house could cost far more than an agent's commissions by the time the transaction is complete.
Many peopleeschew using a real-estate agent in order to save money, but keep in mind thatit is unlikely that both the buyer and seller will reap the benefits of nothaving to pay commissions. For example, if you are selling your home on yourown, you will price it based on the sale prices of other comparable propertiesin your area. Many of these properties will be sold with the help of an agent.This means that the seller gets to keep the percentage of the home's sale pricethat might otherwise be paid to the real-estate agent.
However, buyerswho are looking to purchase a home sold by owners may also believe they cansave some money on the home by not having an agent involved. They might evenexpect it and make an offer accordingly. However, unless buyer and seller agreeto split the savings, they can't both save the commission.