I Want To Buy From The Listing Agent
December 17th, 2008 categories: Buyer's Advice, Seller's Advice
I had a very interesting conversation with a potential buyer yesterday who thought I was the listing agent. When he asked if I was my response of course was no. He wanted to place an offer on a property for $200,000 less than the asking price. The home was a killer deal to begin with since it was lower than everything in its neighborhood and in a fantastic location. I asked why he wanted to speak with the listing agent. Knowing what his intentions were – solely to get a better deal.
I’m just going to jump right into it here. Let me ask the buyers out there some questions:
1. What if the Seller(s) instruct me (the agent) to negotiate the highest price possible for their property and you the Buyer also instruct me (the agent) to negotiate the lowest price possible for the property? Would you agree we have a problem right of the bat?
2. What sort of Deal are you thinking of getting?
The person I spoke with yesterday said he would probably get first preference, the offer would be on top of the pile and he would get a better price for the property. Okay, picture this. I am representing you (The Buyer(s)) on my Listing. We put in an offer of $300,000. Another offer comes in for $350,000. Later that night, two more offers come in one for $365,000 and the other for $375,500. Now you want me to give you first preference – to be on top of the pile – to get you a better price on the property. How is this possible? If it did materialize I would obviously be breaking every rule in the book. A Real Estate broker who is representing both Buyer and Seller should work with extreme care. We owe a responsibility to you both. Like I mentioned the Agent will have a conflict with negotiation of Price and Terms between seller and buyer also could have conflict with the negotiation of Loan Amount and terms with Lender and Borrower. Why would you even want to get into a situation when there is absolutely no need for it. As a Dual Agent I cannot disclose to the seller that the buyer is willing pay more than the buyer’s written offer to purchase. As a Dual Agent I cannot disclose to the buyer that the seller will take less than what the buyer is offering without the express written consent of the party authorizing the disclosure.
3. Do you want my commission?
So you want $3500 – $4500 of my commission. Why. Why do that? If you have your own representation, a Realtor that will look out for you and only has your interests in mind not yours and the sellers, could easily get you closing costs and much much more. I have gotten closing costs for my clients of $10,000 – $16,000. Which is more important my $4500 of my commission or $10,000 – $16,000 or more in closing costs. Why shot yourself in the foot when you can get more from a Buyer’s agent (me) than an agent double ending a listing.
Anyone heard of the word “FIDUCIARY” I did, but did not realize its crutial importance until I became a Realtor. It has become the most important word in my CAREER. FIDUCIARY = Care, Obedience, Accounting, Loyalty, Disclosure. It is of the upmost importance that buyers should UNDERSTAND the limitations of the dual agency situation.
Dual Agency is not easy it is quite difficult. It can be a rocky road to travel and with the most liability to the agent. Dual Agency can work with competent agents but with complete Disclosure and Consent in writing given by buyers and sellers. It is so important that you get representation in todays market. There are alot of short-sales and foreclosures out there and this is the time to have it. PLEASE PLEASE get yourself 100% representation not 50%. There is no point in getting yourself into a situation that could cost you. Its a buyers paradise out there use it to your advantage.
Patrick Canavan
Realtor / EcoBroker
