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Paul Loeb, a certified buyer’s representative with Lloyd’s Realty in Greenport, says sellers have ‘nothing to fear’ from buyers who have their own agents.
When Glenn Jochum started thinking about buying a home, using a broker or real estate agent as his own representative simply didn’t occur to him.
“I’d never heard of the idea,” said the Laurel resident. “I thought you just went out and looked on your own” and contacted the seller’s broker if a property looked interesting. “But by a happy accident someone I went to high school with said she knew just the team to help me through the process.”
That team turned out to be Laurie Mindich and Sean Stark of Options Realty in Riverhead. “It was a great experience,” said Mr. Jochum. “What we found was a bank-owned property and without Sean and Laurie I might not have gotten this house.”
Mr. Jochum was thrilled with all the background work performed by Ms. Mindich, locking in the mortgage rate and other esoteric parts of the purchase process.
“Sean showed me accurate comparable properties and he saved me a couple of times when my instincts weren’t right on,” said Mr. Jochum. “Plus it was really nice to know that the buyer’s agent fee came out of the sale price of the home.”
Ms. Mindich explained that when a seller puts a house on the market, the real estate commission is typically contained in the price of the house. “If a buyer’s agent is involved in the transaction, that commission will be split between buyer’s and seller’s agents,” she said.
“A lot of buyers wrongly think they’ll be responsible for a big fee and that might put them off the idea” of using a buyer’s agent, said Southold Century 21 agent and attorney Patrice Keitt. “But if you’re a purchaser who has an agent working for you, you’re now on an equal playing field with the seller. You’ve got someone going to bat for you, someone who can offer counsel and judgment, find accurate comparable properties and even make an offer on your behalf that includes the buyer’s agent commission.”
So if it’s a win-win situation for purchasers, why is the notion of using an agent to help you buy a property still rather novel on Long Island?
Paul Loeb of Lloyd’s Realty in Greenport isn’t sure. “I think it might be a question of simply not being informed about the process,” he said. “I find most people are accepting once it’s explained.”
A certified buyer’s representative, Mr. Loeb has been acting on behalf of purchasers for a couple of years and believes buyer’s agents are particularly useful for house-hunters coming in from outside the area. “They probably don’t know their Cutchogue from their Peconic,” he said. “I do, and I can scour appropriate neighborhoods on their behalf. I can also interpret information for them.”
Mr. Loeb pointed out recent sales within a three-block radius in a certain section of Southold that ranged from $400,000 to $2.5 million. “That’s where being able to interpret the comparable sales becomes really important,” he said.
But having a buyer’s agent in the mix can result in one potential problem ¬– that of dual agency, which occurs when a single real estate brokerage employs both the seller’s and the buyer’s agents. According to a New York Department of State memorandum, this situation should be avoided because it negates the principle of undivided loyalty inherent in the agency relationship.
There’s nothing illegal about it, however. “It’s not desirable, but as long as both parties are informed, it’s an acceptable practice,” said Mr. Loeb.
Dual agency complications aside, Ms. Mindich believes there is no question that it’s a good thing for purchasers to use their own agents.
“You’ll be getting vital information you might not normally be able to access. That doesn’t mean that seller’s agents are dishonest; but because they have a fiduciary duty of good faith and undivided loyalty to their clients, that translates into simply being unable to disclose certain information to a buyer if that would be detrimental to the seller’s interest,” she said.
Even so, Mr. Loeb thinks it’s important for sellers to know that when he acts as a buyer’s agent, “I’m not coming into the transaction in a hostile way. On the contrary, as long as a property is priced appropriately, sellers have nothing to fear from buyers who are represented by their own agents.”
Ms. Mindich agrees. “There’s no downside for buyers or sellers. When a house closes and no one feels duped, it’s wonderful.”