Part II: How buyers can finally take a seat at the grown-up’s table
When a potential home-seller calls me to set up a listing appointment, very often the first question I will hear is, “How much do you charge?” A motivated seller is done with the house, and now all that matters is money. Sellers — usually — are practical, phlegmatic and open — if not at first then eventually — to logical persuasion.
Buyers, on the other hand, are giddy and emotional and mercurial and fun. They are on a safari to capture something big and exciting, and mere matters of finance are the farthest thing from their minds. This applies even to move-up buyers, people who are also selling their current home to buy the next one. On Friday evening, meeting about the house they are selling, they are coldly rational. On Saturday morning, shopping for the new house, they are swept away by their emotions.
Why do sellers pay the buyer’s agent’s commission, with or without sub-agency? Because it works. Buyers get to look at houses “for free.” The agent will set up searches “for free,” driving the buyers from house to house “for free.” And when it comes time to write a contract, the more the buyers pay for the home, the more the buyer’s agent will get paid. The seller is paying a percentage of the sales price, so the buyer’s agent’s pecuniary interest is aligned with that of the seller, not the buyers, his nominal clients. But — what the heck? — it’s all being done “for free.”
In the feast of residential real estate, buyers sit at the kiddie table and they don’t even know it. If a buyer even thinks to ask who is paying for all these free gifts of information, transportation and advice, the buyer’s agent will blow him off by saying, “Oh, the seller pays me.” We like to think we are smart shoppers, suspicious if not outright cynical, but no one ever thinks to ask, “The seller pays you for what?”
There’s more. Since the advent of buyer brokerage, the claim has been that Read more