Use discount broker or Listing agent's colleague when buying?

Question

Is it better to use a buyer's real estate agent recommended by the listing agent, or use a discount broker and use the commission rebate to bid higher?

I’m assuming that the seller really only cares about getting the highest price, but the listing agent probably prefers to deal with a buyers agent she knows and likes and someone at her firm so her firm keeps both sides of the deal for commission.

Would using a buyer’s agent recommended by the listing agent, who works at the same brokerage as the listing agent, give me an advantage in a competitive bidding process because the listing agent might tip my agent off about how high I need to bid to beat the other offers?

Or would it be better to just use a discount broker and be able to bid a bit higher since the discount broker will rebate 1.5% or 2% of their 2.5% commission split to me?

Nathan Gesner · Answer

I'm a REALTOR and we handle both sides of the transaction within our office all the time. We do well with this but that doesn't mean it's in the buyer's best interest. It has a higher potential of problems and is not the BEST scenario for you.

I think your BEST scenario is to find a Buyer's Agent that is independent of this brokerage or transaction that you can trust to represent your best interests. Period.

Discount brokers? Only if you want discount services.

Nate Si · Answer

@ Nathan G.

Thanks. Since I've found the property that I want to bid on without the assistance of a broker, I think using a discount broker is probably reasonable. I think it's unlikely that a full service broker could negotiate a better price, since it's a competitive bidding situation--i.e., no negotiation, just who is willing to pay the most. I know the comps pretty well. And I doubt during inspection and escrow they could save me more money than the rebate from a discount broker.

What is it that you think a full service broker would offer that a discount broker wouldn't? In my experience, full service brokers are a little faster to respond, but they also can be pushy. And they rarely offer advice more helpful than "bid more" which is great for them and not so great for the buyer.

What is it that you think a full service broker would do for a well informed buyer that a discount broker wouldn't that would justify another $15,000 in cost?

They're basically just filling in a form contract, collecting signatures, and managing a process. I already have a bank and inspector lined up.

Use discount broker or Listing agent's colleague when buying?

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