Buying a Home Without a Massachusetts Realtor
Author Bill Gassett owns Maximum Real Estate Exposure.
Sometimes potential home buyers think they can circumvent the system when purchasing a home. They think they can buy a house without a real estate agent, saving them a boatload of money. Fat chance - it isn't going to happen.
Buying a house without a Realtor is not possible in the sense that some buyers think. Some buyers believe that if they go directly to the seller's listing agent and this will mean that the seller will not have to pay half the Realtor's commission. Therefore it can be credited to the buyer. Nope, it doesn't work that way.
Most agents will laugh if a buyer goes directly to them and the buyer asks for half the commission. They will quickly learn that real estate sales do not work how they want.
Also, buyers fail to understand that most listing contracts state that if a buyer goes directly to the seller, the agent will still be entitled to receive the full commission.
It is called an exclusive right-to-sell agreement and is what most sellers sign up for with a Realtor.
Selling a house without a Realtor is different than buying one when it comes to commissions.
Why You Want a Buyer's Agent When Making a Home Purchase in Massachusetts
When buying a house, having a buyer's agent is essential. A buyer's agent provides various services that make the process much smoother and save the buyer money.
When shopping for a home, a buyer's agent can help the buyer find the right house, provide guidance during negotiations, and ensure the buyer is protected throughout the process.
Protection includes doing proper due diligence on the property, negotiating a reasonable purchase price, and negotiating any potential problems found during the home inspection.
A buyer's agent can help the buyer identify their needs and then search for homes that satisfy their goals. The agent can also advise and guide which neighborhoods and school districts to consider. With the buyer's agents' help, an educated decision on which home to buy is more straightforward.
Once the buyer has identified a home to purchase, a buyer's agent should provide valuable assistance during the negotiations.
Realtors help the buyer determine the best offer to submit based on comparable sales and then negotiate a favorable price and terms. The agent might also be able to provide insights into the seller's motivations that might not be obvious to unseasoned buyers.
Finally, a buyer's agent can help protect the buyer throughout the process. The agent can advise the buyer on any potential issues with the home and help them navigate the closing process. They can also advise the buyer on any applicable laws and regulations that must be followed in Massachusetts.
A buyer's agent can be invaluable when purchasing a home.
Why You Never Want to Go Directly to The Seller's Real Estate Agent in Massachusetts
When buying in Massachusetts, you should never go directly to the seller's real estate agent. The listing agent works in the seller’s best interests and cannot offer the buyer guidance like a buyer's agent.
The listing agent works to get the best price and other terms for the seller. The buyer is unrepresented in what is likely one of the most significant purchases they will ever make.
The seller's agent's job is to ensure the seller gets the most out of the sale, regardless of whether or not the buyer gets a fair deal.
The seller's agent is a fiduciary of the seller, meaning their interests and loyalty are to their sellers.
While you might get a small commission discount from the listing agent because they are getting both sides of the transaction, is it worth it?
Would saving a few thousand in commission be worth a 20,000-dollar mistake? Without protection from a buyer's agent, it could easily happen.
Going directly to the seller's agent becomes a significant gamble that usually isn't worth it.
A buyer's agent can provide valuable guidance, negotiate in the buyer's favor, and protect the buyer's interests throughout the process. Having a buyer's agent is essential.
What if The Seller's Agent Practices Dual Agency?
Dual agency is a situation in real estate where the same real estate agent represents both the buyer and seller in the same transaction. This means the agent is representing two parties simultaneously and, as a result, has divided loyalties.
Dual agency is not illegal in Massachusetts but is a conflict of interest and should be avoided. The agent must be fair and impartial to both parties, but this is impossible because they cannot advocate for them in the same transaction.
The most vital takeaway is that with dual agency, a real estate agent cannot offer you any advice like a buyer's agent would. It is illegal to do so, as it would conflict with the seller.
Finally, dual agency can lead to less favorable outcomes for both parties. The agent is not looking out for the best interests of either party and so might not be able to get them the best deal. This can result in the buyer paying more than they should or the seller getting less than the market value for their property.
The agent is the only party in a dual-agency transaction that gets any benefits. Since dual agency is so bad for consumers, it has been illegal in several states.
In short, dual agency is a conflict of interest and should be avoided. Home buyers should only work with a buyer’s agent to ensure their interests are properly represented.
Final Thoughts on Buying a House Without a Real Estate Agent
As you can see, buying a house without a Realtor is not a wise move. It is certainly not worth getting a small commission discount to go unrepresented.
An excellent buyer's agent does a lot for their clients and should be embraced when buying a home.
Did you enjoy this advice on buying a house without a Realtor in Massachusetts? See other real estate articles on NewsBreak for more timely tips and advice. Bill often writes about general real estate, mortgages, finance, moving, and home improvement.
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