My first day job is as an expert witness/appraiser. Having a broker represent you in a transaction has been deemed sufficient as "due diligence" in both state and federal court. When something goes wrong with your house purchase, the defendant's side will make you establish the fact that you performed your due diligence. Without doing so, you will have a lot less claim to any damages. Now I know what you thinking, what could go wrong? All sorts of stuff!
The seller's broker has a legal fiduciary duty to the SELLER, not the buyer, unless they are acting as a dual agent.
As a fiduciary, a real estate broker is held by law, to owe specific duties to his/her principal, in addition to duties or obligations set forth in a listing agreement, buyer representation agreement, or other contract of employment. These specific fiduciary duties include:
Reasonable Care and Diligence
One of the most fundamental fiduciary duties an agent owes to the principal. The duty obligates a real estate broker to act at all times, solely in the best interests of the principal, excluding all other interests, including that of the broker.
An agent is obligated to promptly and efficiently obey all lawful instructions of his/her principal that conform to the purpose of the agency relationship. However, the duty does not include an obligation to obey unlawful instructions, such as instructions to not market a property to minorities or to misrepresent the condition of a property.
An agent must disclose to the principal all known relevant and material information that pertains to the scope of the agency. The duty includes any facts affecting the value or desirability of the property, as well as any other relevant information pertaining to the transaction, such as the other party's bargaining position, the identity of all potential purchasers, information concerning the ability or willingness of the buyer to offer a higher price, any intent to subdivide or resell the property for a profit.
An agent is obligated to safeguard his/her principal's lawful confidences and secrets. Therefore, a real estate broker must keep confidential any information that may weaken a principal's bargaining position. The duty of confidentiality precludes a broker who represents a seller from disclosing to a buyer that the seller can, or must, sell a property below the listed price. Conversely, a broker who represents a buyer is prohibited from disclosing to a seller that the buyer can, or will, pay more than what has been offered for a property.
Reasonable Care and Diligence
An agent is obligated to use reasonable care and diligence when pursuing the principal's affairs. The standard of care expected of a buyer's or seller's real estate broker is that of a competent real estate professional. By reason of his/her license, a broker is considered to have skill and expertise in real estate matters superior to that of the average person.
An agent is obligated to account for all money or property that belongs to his/her principal entrusted to that agent. The duty compels a real estate broker to safeguard any money, deeds, or other documents entrusted to them relative to their client's transactions of affairs.
Big deal right? You probably have the potential of saving 2-3% of the sales price if you don't get buyer's representation. But what happens when the deal goes south, who is your advocate? You don't have one. I have seen cases where the buyer literally buys a house that is falling apart, the inspector doesn't catch it, and the judge decides that the buyer didn't do their due diligence; therefore, the buyer, the new owner of the house falling down, lost everything. I have seen cases where a buyer fails to meet the contract requirements by thinking that the word "Days" in the contract means week days and not weekends, and loses their earnest money. I have seen cases where a buyer buys a house from a bank and later finds out the entire subdivision is involved in a class action lawsuit against the builder for not including a drainage plan in the original subdivision plan - many of the houses flood, all have major landscaping damages. I have seen cases where a buyer buys a house in the flight path of an airforce base and not know it...
Most states have something called a Real Estate Recovery Fund
. They make licensed sales agents and brokers pay in to the fund. Google it and read when and where a recovery fund pays out, sales brokers rob people all the time!
Most Realtors, IMO, don't know what the heck they are doing, but some are true professionals. You don't act as your own surgeon, your own lawyer, your own what ever.... A professional Realtor can help you negotiate the purchase, be your advocate, walk you through a headache free process, etc... GET A REPRESENTATION! It rarely goes wrong, but when it does, it pays to have one.
BTW, for disclosure, I am a licensed real estate broker, licensed appraiser, licensed mortgage broker, and have a master's degree in real estate development, so I am biased...