by Linda Surovick
The National Association of Exclusive Buyer Agents (NAEBA) is warning home-buying consumers about new business models that may be good for some companies’ bottom line but can be a big mistake for first-time homebuyers and those new to a market.
One such model is “Redfin Direct” where buyers can buy Redfin listings without an agent assisting the buyer during the real estate transaction. By foregoing buyer representation, consumers are risking serious financial harm by attempting to negotiate directly with experienced agents who have historically worked for sellers.
Buying a home is an adversarial process, regardless of how friendly everyone may seem. The seller’s agent is required by law to try to get the best price and terms for the seller, and their commission structure rewards them to that end
“As we have experienced, in nearly 30 years of representing home buyers exclusively, many buyers do not know what they don’t know. The difference is, do you want to be SOLD a home or walk away from the table with a home you BOUGHT? The subtle difference in words is the difference between sales (working with you as a customer) and advocacy (working for you as a client). Do you want to work with a mere facilitator, or confidently entrust yourself to a fiduciary? These are significant differences”, said Ron Huth of Wenham, MA who only works with buyers 100% of the time and member of the National Association of Exclusive Buyer Agents, a non-profit national association that is dedicated to protecting consumers throughout the real estate transaction. Members of NAEBA and their companies only work with buyers and NEVER with sellers thus helping eliminate any perceived conflicts of interests that may arise when consumers embark on the home-buying process.
Rona Fischman, Principal Broker of 4 Buyers Real Estate, LLC in Cambridge, Massachusetts says of Redfin Direct, "This is an invitation to get fleeced, masquerading as a way to save money. In the Boston market, properties are selling at asking price, below asking price, and for as much as $100,000 over asking price. Bidding wars start when properties are intentionally underpriced, making it hard for buyers to know what the legitimate fair price for the property might be. In a bidding war market environment, going at it alone is a great way to lose your head, and tens of thousands of dollars. Redfin is saying that having a buyer's agent doesn't matter; it actually matters, in spades, in a hot market like this. Notice that the sellers still have an agent telling them what offer to accept."
Redfin Direct is currently available in Boston, MA and in the state of Virginia for home buyers who would like to speak directly, without their own agent, to a seller regarding any Redfin Direct listings.
Additionally, Gary Dwyer Exclusive Buyer Agent in Boston, Massachusetts who founded his company, Buyer Agents of Boston in 2005 said, “I think the tag line on the web site says it all, it saves the seller money and leaves the home buyer without the valuable resources they should have by their side. In this model, Redfin becomes the order taker for the seller and is not providing any advice or counsel to the buyer for one of the most complex and expensive purchases they will make in their lives. It is really a glorified For Sale By Owner (FSBO) website.”
To learn more about TRUE Buyer-Representation and be matched with an Exclusive Buyer Agent that will ONLY represent the buyer throughout the real estate transaction, consumers can visit www.naeba.org for more information.