Some buyers believe in the myth that it is better to work with the listing agent directly because you will get a better deal. Nothing could be further from the truth. It would be like going to court as a defendant and not having an attorney.
Without a Formal Broker Buyer Relationship all Agents represent the Seller. In Ontario, all Realtors work in the best interest of the Seller – it’s the law. The Listing Agent (the agent who represents the Seller) has a primary duty to the Seller. The other Agent who finds the Buyer is working for the Seller too – unless he’s signed a Buyer’s Representation Agreement with the Buyer which in effect makes him a Buyer Broker. A Buyer Broker’s duties are to you, the Buyer. Agents do have to act fairly, honestly and with integrity with all potential Buyers, irrespective of who they work for- but they don’t for example, have to respect confidentiality.
A Buyers Representation Agreement sets out in writing that the Agent is representing your interests exclusively. Your Buyers agent goal is to get you the best price and conditions. Your Buyer agent will share historical sales information about the neighborhood and make sure that your interests are protected at all times.
You don’t stand to gain anything if the Agent represents you and the Seller. When an Agent represents both the Seller and Buyer they are getting the full commission since they don’t have to share it with a Buyer’s agent. If any commission discount where to be given it is given to the Seller, not to the Buyer. The Seller pays both the Listing Broker and Buyer Broker out of the proceeds of the sale. That is why is doesn’t cost a Buyer anything to hire a buyers agent as the commission is already set between the seller and the listing agent. That means you can have some work exclusively for you and your best interests and they get paid by someone else.
You cannot just hire any buyer’s agent you need to hire a good one. The wrong agent with a lack of experience could cost a buyer tens thousands of dollars during an offer negotiation. They need to protect your position and help you pay as little as possible. Once you’ve picked someone to represent you, ask to sign a Buyer’s Representation Agreement confirming that THEY work for YOU.