1 out of 2 people polled by the Consumer Federation of America believed real estate agents are required to work in the best interest of the buyer or seller they represent.
There are several situations where they may not be.
For instance, if you're selling your home and you're asking for $350,000, but an offer comes in for $340,000, the agent may push for a sale even if there is a good chance you can get your asking price from another buyer.
Here's why: At the average commission rate of 3%, your agent's commission only decreases by $300 if you take the lower offer. They still make $10,200, so of course they want to get your home sold so they can get paid and move onto the next. It's in their best interest to get started on another $10,000 commission than it is to stick it out with you for a "measly" $300.
Another situation where they may try to coerce you into a sale that is not in your best interest is when both your agent and the buyer's agent are from the same brokerage. The brokerage now stands to earn the full 6% commission and make over $20,000! So let's say you get an offer for $2k less than a buyer outside their firm. They may tell you that the lower offer is a "safer bet".
Don't let your agent choose your title/closing company. They live in the industry so odds are they have a deal worked out where they get a kickback. Where does that kickback come from? You, of course. You're already paying them thousands of dollars, don't let them make more off you. Shop around and find the best rate. If you can get the best rate AND share your agent's kickback, that's a win-win.
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Published on 01/24/19