For a home seller, acting as your own real estate agent is fairly simple. Stick a for sale sign in the yard, advertise for free on Zillow or craigslist and you are in business. You can even get on the local MLS in most areas for a relatively modest fee and give your property much the same exposure to buyers that any agent can. The seller of course has to do all the work the real estate agent might typically do – price the property, develop marketing materials (photos, descriptions, floor plans, fliers, web sites, etc.), schedule and conduct showings, negotiate offers, inspections, repair requests, monitor buyers loan progress, coordinate items needed to close, etc., but as a seller you have the ability to control the transaction from start to finish and to pay or not pay for additional help as you choose. You may be approached by real estate agents working with buyers asking you to pay their fee out of your proceeds (and you may find it to your advantage to do so), but you don’t have to do that if you choose not to.
For buyers, the option to act as your own agent and control the fees paid is much trickier to achieve. You can probably do all the work a buyer’s agent might typically do, but for listed properties, a buyer can have a very difficult time capturing the buyer’s agent’s share of the commission. This is due to the way that real estate commissions have evolved over the years and the fact that the buyer’s agent commission is built into the sales price and subject to terms of the listing agreement between the seller and the listing agent.
This seems pretty crazy to many buyers – you can hire someone to be your agent and represent your interests, but you have little say over how much that person gets paid, and if you decide not to use a buyer’s agent, you will likely still end up paying that same fee rather than be able to claim it for yourself. While I understand why buyers think the current system is crazy, I also understand how the current system evolved (basically from a system where all agents, including those working only with buyers, worked for and were paid by the seller to one where agents working with buyers now represent buyers but commissions still come out of the price paid to the seller mostly as a matter of convenience and custom) and why it works the way it does at this point.
The typical listing agreement for real estate calls for a total commission to be paid out of the sellers proceeds when a property closes. That agreement also likely says how much of that total commission will be offered to agents working with the buyer, whether as a buyer’s agent, dual agent ( a murky concept at best), or as a seller’s agent working with an unrepresented buyer. The total commission stays the same usually, no matter whether the buyer elects to have an agent represent their interests or not. So you can act as your own agent when buying, you just can’t get paid for acting as your own agent. I guess that is pretty crazy.
Goddin Real Estate has developed programs for working with buyers that allow the buyer to have control over the process and fees involved. Our programs allow buyers to pay us by the hour or pay a retainer up front and a closing fee when the transaction is completed and we then rebate the buyer’s agent commission that the seller agreed to pay to the buyer. It is way to work within the current system to give buyers both excellent service and advice and the ability to control how much time and money they need to spend on an agent. Until the system is changed to one where sellers pay their agents out of their pocket for services rendered to the seller and buyers pay their own agents out of their pocket for services rendered to the buyer, Goddin Real Estate’s unique way of doing business gives buyers the best options in today’s real estate market.