Ana Maria Sencovici

You're ready to buy a new home: thrilled, right? But somehow, you can't shake that nagging feeling that maybe you're paying more than you needed to. Did your agent act solely in your interest? Or did he/she have other incentives to weigh?

The fact is, you may never know for sure. There is no one national governing body that dictates agents' behavior or disclosures. The National Association of Realtors has a Code of Ethics and Standards, but laws vary by state. Some states don't allow agents to represent both buyer and seller without full disclosure, while others give carte blanche to any and all incentive fees to sell a property.

The agent disclosure issue has become a flash point in some states.

It's understandable that many sellers are looking for agents to shave commissions at a time of economic distress. What few people understand, however, is that saving a few dollars on the commission may actually hurt you in the long run. The clichés of "you get what you pay for" and "there's no such thing as a free lunch" never rang more true. (Note: Foxtons tried the model of 2% commissions and they're out of business.)

Here are the five reasons why you may want to rethink your negotiations.

1. Times have changed: Counter-intuitively, downturns are the worst times to cut commissions. It's actually times like these in which you get the best bang for your buck for every cent of the commission. Why? During the boom years, houses basically sold themselves. Therefore, the difference between a good selling agent and a bad one became murky because everything was selling so quickly. Now, properties are on market for 2-4 times longer, meaning that the quality and skill of the broker actually matters, and then some.

Walking down Fifth Avenue recently, I couldn't help but be struck by the number of empty storefronts, particularly at this time of year. So much for those green shoots. Talk of an economic double dip is rising, as typically happens at the tail end of every recession. What backs up the argument for a double dip? Let's have a quick run-through of the major reasons:

• The government stimulus is limited in reach. Many experts argue that double the fiscal punch would have been needed to do more than merely prevent a depression (which we have, indeed, averted).
• Unemployment continues to rise, as corporate downsizing continues and stimulus programs wind down.
• Consumers are (still) tapped out. Already, we are seeing projections of holiday sales decreasing versus last year. With homes no longer functioning as ATMs, and job prospects uncertain at best, cash is tight in most households.
• The stock market's bull run is losing steam. For the last few quarters, it has built in little downside to an upwards economic trajectory. Couple that with a weak dollar and ever-increasing gold prices and... it just doesn't smell right. Robert Shiller's recent statements underline my view that this is not just another recession.
• Housing prices are still in negative territory. The fact that the latest Case-Shiller index has been used as evidence of stabilization is like congratulating a gambler on losing just $500 dollars instead of $2,000.

These same fundamentals, however, can be sliced and diced to support either point of view.