Don't Buy Directly From the Builder. It Could Cost You.

It's been a while since I wrote in here, but I will try to get back into the swing of things. The first thing I wanted to write about is dual agency. This is when you let the same agent represent both the buyer and the seller. Of course, both parties have to consent to this. Why would anyone do this? Good question. It seems like a great thing for the agent, but is it so good for the client involved? The seller might be able to pay a reduced commission, but for the buyer? What do they get? This happens all the time especially when a buyer goes directly to a builder to purchase a home. They are under the false impression that the builder will save them money if they don't use a buyer's agent, and were probably told so. So they agree and let the builder's agent represent them too. Although this is perfectly legal, I ask how can the seller's (builder) agent represent the builder's best interest and your best interest at the same time? It just doesn't make sense. Money wise, either the builder's agent gets paid double (called double ending) or the part of the commission intended for the buyer's agent just goes into the builders pocket. I saw some very bad behavior from builders during 2005. Now that the market is soft, I imagine some of builders who are in financial trouble are going to be desperate and it could be potentially dangerous to enter into an agreement without your own representation. I am not saying that all builders are dishonest. Even just the opposite, there are many here in the Treasure Valley who are honest and just making their living. In the big picture, cutting out the buyer's agent is not saving you any money and could end up costing you in the long run.