MYTH 1: I'll get a better price.
Some people think the agent will share negotiating information with them, such as how low the sellers are willing to go. Not so - make no mistake about this.... the listing agent is hired by the seller to get the best price possible for them, even if they know what the seller will do they can't disclose it to anybody without authorization by the seller. They are ethically and legally bound to sell that house for the most money possible. Along that same line, there also exists the misconception that since the seller is saving half of the commission, they can lower the sale price by that amount. This is not the case - the commission is set in the original listing contract which is a contract between the listing agent's Broker and the Seller, so the unless the Broker also becomes part of the negotiations, or they have agreed up front to what's called a Variable Rate or Dual Rate commission (the seller pays a different rate if the listing agent sells the house themself) the seller is paying the full amount no matter whether the buyer has their own Buyer's Agent (representation) or not.
MYTH 2: I will get a kickback of at least 1% from the listing agent
Almost all Real Estate brokerages discourage or don't allow kickbacks. No Realtor I know would do this. Although there seems to be the urban legend style "I know someone whose [friend, neighbor, cousin, coworker...] did this" it is actually very rare. You also need to know that your mortgage provider may have a serious problem with a kickback, and that well into the buying process you could lose your mortgage approval. Also, reputable Brokers who agree to a kickback will send the IRS a 1099 form documenting the payment so you may face tax consequences.
MYTH 3: I don't need a Buyer Agent - the listing agent is my agent and will help me
Oh boy, this one always gets me.... Even if you agree to "Disclosed Dual Agency" which means the listing agent's Broker works for both you and the seller, but the listing agent still works for the Seller, their primary responsibility is ALWAYS, ALWAYS, ALWAYS to help and protect the Seller. No matter how nice the listing agent may be, when a choice has to be made that is a conflict between your interests and the Seller's, the agent will always do what is in the Seller's interest. This means they do not need to tell you that a outdoor wood boiler powerplan has been approved to be built on that lot behind you, or that 30 years ago this land was a gun club and no one really knows how much lead is or isn't still in the ground. The agent you’re buying through also has a vested interest in your buying THEIR listing (house) and will not encourage you to look at similar ones of better value even if they know of them. It is important to remember that if you buy through the listing agent, no one in this whole process is looking out for your interests except you.
MYTH 4: The listing agent will get the seller to take a lower price because they are highly motivated to put the deal together.
This can really backfire for reasons related to Myth 3. First of all, the listing agent cannot legally assist you in deciding your buying strategy, which includes preparing a comparative market analysis to determine the correct buying price for the home and determining the terms that you will make a part of your offer. Only a Buyer's Agent can do this. The listing agent's sole responsibility is to take the offer you have decided to make with the terms you have decided to include and deliver it to the Seller. They can analyze your offer and prepare a fresh market analysis for their Seller to determine if it's in the Seller's best interests, but ultimately any decision on your offer is solely that of the Seller.
MYTH 5: A Buyer's Agent is going to cost me a lot of money.
A Buyer Agent is paid out of the commission the seller has agreed to pay to the listing agent's Broker, they have decided on what the "split" will be and both Seller and Broker have signed it in writing. So here's the thing, it costs you nothing to have a Buyer's Agent and your Buyer Agent is the only person in the whole home buying process that is totally and completely looking out for your interests. So why wouldn't you want one? They will protect you from knowable pitfalls and get you the home you want for the lowest price they are able.
I function as both a Listing Broker/Agent and an Accredited Buyer Agent. My preference is definitely to be one or the other in all my transactions. I find ultimately that all the parties involved are much happier and better off with a clearly defined set of roles and loyalties and no question at any time who it is I'm working for.
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