Reply to Benefit of hiring a real estate agent for buyer if we found the property?

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[quote=Anonymous][quote=Anonymous]If I were you I'd go knock on the home-owner's door and say you love the house and want to pay fair value. 
Also say since you do not have a "buyer's agent" that you will pass some savings on to them.

A seller only cares about his bottom line, after whatever fees. More fees equals more money the buyer must bring to the table, and less money the seller gets. [/quote]

Elaborating on this...

As a buyer, you have to realize that the listing agent has a fiduciary duty only to the seller. Keep this in mind. Setting aside the principal-agent problem that ultimately the agent wants to maximize his or her fee and get the property sold, the listing agent really isn't going to do you any favors unless it is in his or her interest. This matters in three ways: 1) Negotiating price of the house; 2) Negotiating the home inspection items; 3) Getting to the settlement table.

That said, the pp is right. If you are a good negotiator, you can buy without a buyer agent. HOWEVER, I wouldn't let the seller agent pocket the entire 6%. You want a piece of that percentage yourself if possible.

Imagine the property sells for $1 million (simply for the sake of easy math). The real estate commission is $60,000.

Under a typical arranagement, that $60,000 would be split between two agents. $30,000 a piece.

Now, say you want to put in a house without a buyers agent. You write an offer for that $1 million (again, keeping the math simple) but ask for all closing costs to be paid by agent. On a milllion dollar house the closing costs will be about $17,000 or thereabouts, including prepaids. Now the agent is making $43,000 in commission, which is less than the full $60,000 but more than the $30,000. The seller is happy b/c he gets full price.

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