Do I really need a buyer's agent to purchase a home?
If you're new to the real estate market you may not be aware that there are typically two agents involved in every real estate transaction; the listing agent and the buyer's agent. While the listing agent, who originally works for the seller, and lists and advertises the property, can also be a buyer's agent and assist buyers in purchasing that home, it may not be in the buyer's best interest to do so.
A buyer's agent works solely for the buyer in any real estate transaction and they do not have a hidden agenda at selling any one particular property over another. As a Portland buyer's agent it is my duty to make sure you find the right home in the right neighborhood and for the right price regardless of any homes I may personally have listed.
There tends to be a conflict of interest when dealing with dual agency. Because the listing agent originally started working for the seller first their interest is to the seller and not necessarily the buyer. Their only goal for the seller is to sell that home not necessarily finding the buyer the best home for their needs or price. Also, letting the listing agent become aware of all of your financial details and pricing strategies may not work for your benefit is the buyer.
Let me show you an example:
Say, a couple of buyers were looking at an open house and when touring that home the listing agent, sitting the open house, asks politely if they are working with a buyer's agent. If not, the listing agent will promote themselves as their buyer's agent and if the couple finds the home desirable can put an offer into the sellers through that listing agent. Most listing agents will want to know if the buyers have been preapproved for home loan if they’re financing the property. The listing agent will also want to know how much they have been preapproved for to verify they can afford the home they are looking at. Here's where it gets tricky; let's say the home is listed for $300,000. The buyers have been approved for $350,000, but the home has been on the market a while and the buyer's want to offer $275,000. Although they love the home and would probably pay full price they want to offer less to see where the seller sits. Because the listing agent knows how much they are approved for, knows how much they love the house, and also knows they would probably pay full price, they are armed with this knowledge to return with to their sellers. Because the sellers now know this as well they counter offer for $295,000. The buyers are unsure if the seller can take any less or if there other offers on the table because the listing agent can manipulate the deal (although it's unethical to do so). The buyers end up paying $295,000 for the home and the listing agent now walks away with the full commission.