Why not just purchase a home directly from the Seller’s agent? This is an important question, and one that can dramatically affect the purchase price and terms one may receive on a purchase.
The Seller’s agent is required to seek the best possible outcome for the Seller of the property, which generally means that they must seek the highest possible price—and to limit concessions to a Buyer as much as possible. Of course, a Buyer’s optimum outcome would be to pay the lowest price the Seller will accept, and to obtain as many concessions as the Seller may allow. Therefore, while California real estate law allows a real estate agent to represent a Seller and a Buyer simultaneously, it is hard to imagine how an agent could effectively provide the most aggressive possible defense to two parties who want exactly the opposite outcome.
In most cases, the total of the real estate commission is subtracted from the sales proceeds, which is split between the agent who represents the Seller in the transaction, and a “cooperating” agent who brings the Buyer. If one allows the Seller’s agent to represent both sides, this cooperative broker’s commission is coming from the purchase price that is paid. This may mean that a Buyer choosing this kind of limited representation may be paying for an advocate–but receiving only a referee. For best possible results, a Buyer should choose an agent that represents only the objectives of that Buyer. This should result in a lower price, more effective use of inspections and disclosures, and more favorable closing cost and term benefits. If a Buyer is already in a binding relationship with another Broker, this section is not intended to be a solicitation of that Buyer.