Thread: noob question from first time buyer #2

Each state has slightly different rules so you'll need to ask the agent or check with the state's real estate commission, but in general if you don't sign a contract/agreement with the agent, they are usually working for the seller, even if it's NOT the agent's own listing.

Often times the listing agent contracts with the seller to receive X% for the sale of the home. To help sell the home they offer part of that commission to another agent. (Any agent can take listings (sell a home) and also act as a buyers agent. Some choose to do only one or the other but most will engage in both.) If another agent brings a buyer, that buyer's agent will receive part of the commission (many time about half). If there is no "other agent" and the listing agent sells the home directly to the buyer there are two possible types of agency that may have existed: 1. The agent could be representing both by having agreements with both sides and acting as a Dual Agent. In a Dual Agency situation, the agent almost becomes a neutral party. They can't help "negotiate" or really work on either sides' behalf. They simply become a paper pusher. Many people are perfectly fine with this.
2. The other scenario is that the agent acted only as a Listing Agent and the buyer was simply a customer with no representation.
In either of these scenarios the agent would receive the full commission (no split). If you go unrepresented, the Listing Agent can still write up a contract for you and help you through the buying process but you have to be careful about what information you reveal. If you are not their Client, the Listing Agent has an obligation to reveal any information they know about you (the buyer) to the seller, possibly ruining any upper hand you might have in negotiations.

However, if you want someone to truly work for you, find a buyer's agent and make sure your agreement states that you won't accept Dual Agency. And yes, in most cases the seller has agreed with the listing agent to pay the buyer's agent, so you (the buyer) don't have to pay the agent.

Make sure it's legal in your state first, and if it is, you can ask the agent to rebate some of their commission. There are a number of discount (some call them limited service brokerages) in which their policy is to rebate a certain percentage of their commission. Just make sure, if the agent agrees, you have it in writing before you sign the agency agreement or submit your offer to purchase. Keep in mind, you may get what you pay for.

BTW, this post is so long because buying and selling real estate isn't easy. There is a reason why most people use an agent.

Best of Luck!