Are you considering purchasing a Newport Beach home for sale? And are you asking yourself if you should use your own Newport Beach Real Estate agent, or maybe just go direct to the listing agent? This should be carefully considered when beginning the Newport Beach home buying process. 
I would like to explain what “dual agency” is in the State of California, and the reasons for using your own Newport Beach buyer’s agent when considering purchasing a Newport Beach home for sale.
As referenced at the C.A.R Form DA 11/06 “Seller and Buyer agree that: (a) Broker, without the prior written consent of the Buyer, will not disclose to Seller that the Buyer is willing to pay a price greater than the offered price; (b) Broker, without the prior written consent of the Seller, will not disclose to the Buyer that the Seller is willing to sell property at a price less than the listing price and (c) other than as set forth in (a) and (b) above, a Dual Agent is obligated to disclose known facts materially affecting the value or desirability of the property to both parties.”
This is a disclosure that is utilized in California Real Estate transactions. Lets examine what it says though, and then we can discuss the benefits of utilizing your own Buyer’s agent with your Newport Beach home purchase.
The paragraphs (a) and (b) are pretty straightforward in my opinion and basically state that the Listing agent shall not disclose what the Seller is willing to sell the home for, and the Buyer’s agent shall not disclose what the buyer may actually be willing to pay for the Newport Beach home. Referencing (c) above is important as well, because a Dual Agent must disclose facts that perhaps the Seller has mentioned in passing (oh the neighbors are so loud; the dog barks all the time; the neighbor built that entire house without a permit; or they never clean up the dog’s yard) are just a few that I have heard.
If as a buyer, you think that the listing agent is going to somehow get you a better deal on the property, consider this. When a property is listed for sale, a commission is agreed upon before you ever came in the picture. Therefore, if the listing agent also is the selling agent, they will be getting both sides of the commission. Why wouldn’t you want your own representation?
In my opinion, the reasons you should have your own Newport Beach Buyer’s agent is as follows:
- The Listing agent has a pre-established relationship with the Seller before a buyer comes along. It may be difficult to be objective.
- The listing agent is inherently loyal to the seller; no matter how ‘honest’ one is, it is difficult to be completely objective and fair to both parties.
- The commission is already established in the Listing Agreement. The Seller is the compensating party when the property closes escrow.
- Listing agents have a fiduciary responsibility to the Sellers.
- Having an independent objective Realtor as a Buyer’s Agent provide the comparable sales for you so that you can make a fair market value offer.
Sharon – I can’t tell you how many people who call me without being represented. When I ask them if they have an agent, they say no, they want to save the fee. I usually go along with their plan, but when we go through the process of the contract, they get a shock to find out that the commissons are already negotiated by the seller and the broker. Buyers don’t negotiate commissions, unless they want to pay it. In most cases, a good buyers agent would save them more money anyway, so it’s a foolish idea. In some cases, with new construction, the buyers are really being dumb because the builders will not reduce the price, it changes the comparables for future sales and appraisals. When a buyer is unrepresented, it’s just more money for the builder or listing agent, depending on the listing agreement.
Sorry for the long comment, this is just a sore spot for me. I don’t like to see consumers make big mistakes, and this is one of them.