Looking at houses tobuy with our agent. After a lot of persuading by us, she showed us a house she is also the selling agent for. She says tht the sellers have ok’d her acting as the buyers agent too. She seems to be straight, we have not had any reason to question her professionalism.
What are the downsides to her buying and selling the same house?
“When asked if you can do something, tell’em “Why certainly I can”, then get busy and find a way to do it.” T. Roosevelt
Replies
If I'm understanding your question right I think that senario is done all the time.
My last house that I sold the realtor that I listed it with also sold the place. By doing so I saved 2% on the comish, something that I negotiated pryor. He also made more money on the deal as the seller and lister.
Doug
Is there an issue with who the agent is actually representing? Who is she looking out for?
"When asked if you can do something, tell'em "Why certainly I can", then get busy and find a way to do it." T. Roosevelt
Is there an issue with who the agent is actually representing?
No disrespect to any realtors in particular but I dont trust any of them! <G>
I use a realtor that I trust and who I think does things above board so I dont feel that there is a conflict.
I dont feel that if the realtor is trustworthy that I have anything to worry about.
To tell you the truth I really dont know that if I had a really crappy realtor that they would be able to screw me on a sale, what could they do? I ask that with all seriousness, I dont know that a realtor, even a crooked (sp?) one could get one over on me either way.
I think the practice of both listing and selling the same piece of property is very common though. I think the realtor is supposed to be representing the seller but if they are any good at there job, know it well and so forth, that they can act as both with no compromise to there integrity or your money!
EDIT; I went back and read all the post about the responsibility of the realtor. The best advice that I seen was never tell them everything.
But even if she(your realtor) knows your qualifing amount that shouldnt hurt you any, you would see a pattern of her taking you out to see houses exclusively for that amount if she was just trying to get all she could out of you. If you havent seen that then I wouldnt worry about it.
When my wife and I were looking for a house here in San Marcos we qulified for $400K, but we told the realtor that we were not even interested in anything anywhere near that and he didnt even bother showing them to us.
Doug
Edited 8/21/2006 11:04 am ET by DougU
but I dont trust any of them! <G> I use a realtor that I trust
I'm sure if I squint and stick my tongue out just right as I read that, it will eventually make sense. :)
The one downside that I can see is that she would try to keep the selling price as high as possible to keep her commission up. Of course they will all try that I suppose.
We told her what we wanted to spend, and every day when DW came back to the apartment the listing prices of the houses she had seen had inched up a little. I can hear the conversation now: "Well, since you don't like those houses, maybe you need to look at these." At one point she was looking at places 50% higher than where we started.
"When asked if you can do something, tell'em "Why certainly I can", then get busy and find a way to do it." T. Roosevelt
but I dont trust any of them! <G> I use a realtor that I trust
Yea that was a little tonge in cheek comment.
Just like any profession there are good and bad.
I usually use a realtor so that I have access to the houses and for the closing, I know what I want most of the time so the realtor is just there for entertainment value!
With all that stuff said about an hour ago I had a man come to my door and ask if I was going to be selling my house, dont know where he heard it but I told him yes we were, his brother lives two houses to the east of us and his father lives about 4 houses down to the west, he's moving here from Ft Worth and wanted to talk a deal, or the potential of one!
I told him that I could save him about 10-12 grand if we could do a sale w/o the realtor and that really interested him, so with my fingers crossed I hope something good from this little meeting comes to pass.
Doug
would she be double dipping or would she give a break on the comissions...
Life is not a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside, thoroughly used up, totally worn out, and loudly proclaiming<!----><!----><!---->
WOW!!! What a Ride!<!----><!---->
Forget the primal scream, just ROAR!!!
Break on the comish.
I made the deal before the listing was signed, you list and sell the comish drops from 7% to 5%.
I've done it before but the circumstances had never happened in that the same person did both so I was never able to save on it, finally I caught a break!
The house that were listing here in the next week or so will be done the same way.
Doug
I made the deal before the listing was signed, you list and sell the comish drops from 7% to 5%.
I do a thing with my sellers (unless they're going to be a PITA) where they pay the usual rate (4.8-5.4%) if another agents sells the house, but if I write the contract myself it's a flat 4.0.
I'd take 7% listings all day, but the market around here generally doesn't bear that.
Jason
Jason
As a side question to this thread......
I have had someone drop by my house and show interest in buying it, I havent listed it yet, apparently he heard that I was going to be selling in the near future.
I need the assistance of a friend who also happens to be a realtor to help me do all the closing stuff, down here in TX they do stuff different then they do in Iowa where I understand the rules of the game.
If I use my friend to help me do all the closing stuff, get survey, (yea, they do that after every sale) get septic pumped and inspected and all the other stuff involed that I dont know about, what would be a fair amount to pay him? He has to feed his family and I'm not going to take advantage of a friend so their must be some amount that would sufice. I dont feel that he should get 7% or even 5% since I did all the heavy lifting.
Got any ideas?
Doug
Thats how you learn how to do it .
Dont rob your self of the privaledge.
We dont know any thing until we learn it .
Just do it and ask questions as you go.
This is somthing you need to have knowledge.
Tim
Tim
Thats how you learn how to do it .
I agree with you 100% but I dont think I'll ever own any more property down here in TX so I'm not sure how much of this info I really need to know.
I know enough to muddle my way through up in Iowa so that part I got covered but Texas has some weird azzed rules about realestate and I'm not sure I'm ever going to need that knowledge.
I guess I can store it up in my head with all the other stuff that I can never seam to find when I need it. <G>
Doug
Doug,
Just a little suggestion. You may not need a new survey. If you have not significantly changed the outside of the house and your survey is recent (3 maybe five years) some title companies will accept the "old" survey.
Second, pumping and inspecting the septic is the responsibility of the buyer. You the owner need to give access, but it is the buyer's expense.
Hopefully we just saved you $400 on the survey and $800 on the septic.
BTW-How do I know these things, my wife is a realtor. She helps people make the right decisions when buying or selling their homes. Granted there are some complete bozos in the RE business, but good ones will make you money and save you money.
Texas has very stringent laws about disclosure-there is a new state promulgated form about the home condition (seems like it is about 10 pages now). Get it and fill it out-will save you from being sued for covering up defects. Get a warranty to cover appliances and HVAC.
Good Luck
Bruce
Bruce
I thought you mentioned that your wife was a realtor.
We bought this place 2 1/2 years ago, so thats good to know on the survey. No changes to the outside, really none to the inside either.
I know that your not from Austin, not sure where you hail from, but is the survey thing something that you did back there( I think you said Mich, not sure).
I dont recall ever getting a survey after selling a property, figured it to be a TX thing.
I wasnt sure about the septic thing either, I dont remember us paying for it but I'm sure we did!
I had the Home Warranty deal when we bought and would suggest that to new HO's as well.
This whole deal is sorta weird in that the guy just came to the door asking about the house, we talked about money and other stuff, he left and I thought well thats cool but who knows?
Then last night he shows up with his wife, three kids and his mother from down the street. I gave them the 50 cent tour and they seamed really interested. If this should develope into a sale I may be the luckiest sob around.
Doug
Hey Doug,
I've been here in Austin for 15 years. Grew up in NY.
if you do the transaction by yourself, get a free Comparative Market Analysis from one the big realtors in town so you know what your house is really worth.
Get the property condition report from the Texas Real Estate Commission web page, fill it out and get it signed by the potential buyer.CYA
If the buyers are serious get a letter from their lender saying the qualify for a mortgage to buy there home. Get a good deal of earnest money as well so you know they are not wasting your time. The easiest way out of buying a home without penalty is to not qualify for a loan. You do not want to show up to closing only to find out your buyers did not get approved or funded.
Lastly put deadlines on getting things done. Some folks have the ability to drag stuff out forever and it ends up costing you money.
Second lastly, whenever we sell something, we ask the title company to draw up separate closing statements-one for the buyer and one for the seller. It is our opinion the buyer does not need to know how much profit we are making on the deal. They only need to know their costs-the title company will probably whine but that's why they get paid the ridiculous fees they get.
Good Luck
Bruce
Bruce
Thanks a lot.
Doug
Realtors sell houses they own or have listed and work with both the Buyer and the Seller everyday on the same transaction. Realtors provide and opinion or assistance with:Price opinion
Earnest money
Deed related issues
Home repairs
Negotiation strategies
Contract issues
Property Condition Report
Contract addendums, groundwater contamination & lead paint
contract contingencies
Termite inspection
Buyer's pre-approval
Financing
Home Warranty
Inspections
Mediation
Final walk through documents
1031 exchange
First time homebuyer programs
Bank foreclosures & short sales
Property tax and special tax disclosuresYou do not need a Realtor to either buy or sell a home. If you are familiar with the process and procedures involved in buying or selling a home why would you want to bother with a realtor?^^^^^^
S N A F U (Situation Normal: All Fouled Up
The only downside is that legally her fiduciary(sp.) is with the seller. Although she is also working for you her obligation is with seller. Happens all the time, keep your cards close to your chest. If she is a good agent and you strike a deal go for it. I'am not a attorney, but I did stay at a holiday inn once.
Hi FastEddie,
As I understand it, that's dual agency, and I just bought a piece of property last winter as a buyer in such a situation. As in your case, this agent was the one I would've have used anyway due to excellent recommendations; she just happened to have the listing as well.
First off, at least where I'm at, every real estate agent works for the seller unless you have specific buyer's representation.
Now as for the dual agency, at least ethically if not legally (it may depend on state law), the agent should not deter you from looking at competing properties in which s/he does not have the listing; nor, when it comes to negotiation, should the agent divulge privileged information from one party to another in the negotiations. The agent should provide suitable comps as well.
The agent that sold my property to me has a "team," and so my end of the deal was handled by a buyer's specialist/associate. I did not deal with the listing agent directly during the transaction except to exchange pleasantries.
Regardless, I never discussed what my ceiling was, etc., with either agent. I knew what I wanted, and did my own due diligence; when I made the offer, I knew what I wanted to do and what compromises I was willing to make. I did not discuss any of that with the agent. I also made certain I had an attorney review period (which even the agent recommended).
It all worked out fine.
Good luck,
sojourner
Laws can and do vary from state to state, but as a general rule her first (and only?)loyalty is to the seller.
No doubt you have given her information which you would prefer a seller not know (like how much you are pre-qualified for.)
Under "general" rules of agency she could (and maybe should?) disclose that to the seller, which could well affect their willingness to negotiate the price.
But, as said, state laws vary.
I believe many (otherwise honorable) agents will downplay the downside of a situation like this, and you best seek a lawyter's knowledge and advice
Fighting Ignorance since 1967
It's taking way longer than we thought
#1 thing to remember about re agents the first person they work for is THEMSELVES period.they want to sell a house and put food on the table.# 2 they represent the seller. #3 i don't care if you would give twice as much than your offer -buyer or sellers agent you never tell them . larry
hand me the chainsaw, i need to trim the casing just a hair.
I am a Realtor in Minnesota, and this situation is called the "hogger". Be careful because dual agency is treated differently in different states. In MN, dual agency not only occures when the agent is representing both the buy and sell side, but also when two agents from the same company/broker are representing both sides. I am representing the seller if I am showing a RE/Max Results property to a buyer who is not under contract with me, and I am obligated to share with the listing agent any valuable info. Once a buyers agreement is signed, no info is shared between the parties.If you have signed a buyer rep agreement with your agent, you have entered into a fiduciary agreement with her, and she must act in your best interest - meaning she cannot share pertenant info about the purchase with her sellers. If you have signed no agreement with her, then she is obligated to share with her sellers any pertinant info about you with regards to the transaction (That is her fiduciary obligation to her sellers set up through their listing agreement). Keep in mind that fiduciary resposabilities last beyond the contract time limit. For example, if durring the course of your relationship, she finds out your absolute maximum is $500K, she cannot share that with her sellers even if you fire her and use a different agent to buy her listed property.Your state might be different. I have to disclose all of this type of info to anyone I work with, by state law. Remember, your state may be different with regards to representation. I would sit down and have a frank discussion with her about representation and if your state has stron buyer representation, or is more of a buyer beware place.Hope that helps,-SWS
If you have signed a buyer rep agreement with your agent, you have entered into a fiduciary agreement with her, and she must act in your best interest - meaning she cannot share pertenant info about the purchase with her sellers. If you have signed no agreement with her, then she is obligated to share with her sellers any pertinant info about you with regards to the transaction (That is her fiduciary obligation to her sellers set up through their listing agreement).
Good post GodSend. You described Virginia well. Other than "hogger" which I hadn't heard before.
I'm not currently licensed in Virginia, but dual agency was alive and well when I last was. Eddy should have gotten an agency lecture before seeing his first house. If that didn't occur, I'd be suspicious of that agent about everything. Way too sloppy. More likely, it occurred and didn't leave a lasting impression. Dual agency, being much more difficult, is often discouraged.
This is very straightforward and much-discussed here. When in doubt, head for the broker who has responsibility for the agent. This is serious business, and one which Virginia takes licensing seriously. Complaints are acted on.
Personally, I'd rather buy through the listing agent, seller's representative. It removes one person who might bring unnecessary static into the negotiations. Sharing very much personal information strikes me as an unwarranted risk, always. Leave that for the mortgage broker, who has to know. Also, with only one agent there's the possibility of agent/seller renegotiating the commission to aid a sale. Less likely with 2 agents.
For those who need more help with making an offer, perhaps unsure of necessary contingencies, buyer representation is readily available. Some brokers specialize in just that.
It's likely that Eddy's Realtor was not "his" at all, but a succession of sellers' representative. If she didn't explain it, she put her license at risk.
PAHS Designer/Builder- Bury it!
Technically, even on a house that she's not the listing agent for, her first responsibility is to the seller- the seller is paying the commission, not you. If you want a true "buyer's agent", you've got to pay the commission. At least that's the way it works here in NJ.
Reality is, you really shouldn't have a problem either way- there's only so much that a real estate agent is really going to do for you anyway. I'd go so far as to make the bold statement that probably 90% of them are pretty useless for anything other than driving you around town and printing MLS listings anyway (I know I'm going to get flak for that, but it's just been my experience).
Bob
Wow Bob, One year ago I would have been one of those people who would "give you all sorts of flack" about that sratement. Having lived in Texas and Iowa, and participating in no less than 20 real estate transactions either as the buyer or the seller, Pretty much every Realtor I have been involved with has been quite active in taking care of every little detail of the sale, holding everybody's hand and keeping all the details in order up to and including the closing. Some better than others, but all of them nonetheless at least understanding that their duty was to "handle" everything, and see to it that all the ducks were kept in a row. I would think that this is just common sense, after all, if the deal falls through for any reason, regardless of why, or who dropped the ball, it means no paycheck for the agent.
That was before we moved to Florida. This house we just bought, the realtor showed us a handful of properties, wrote up a purchase offer, and walked away from us. At one point my wife even called him to ask him something about some little detail, and he told her 'Oh that's your responsibility to take care of, you and I are all finished." He never even showed up for the closing, as a matter of fact, When I called and asked him about that, he acted quite surprised that I would even expect him to be there.
I have since done some asking around and evidently that's pretty much the norm for realtors in this area.
So, two hour's worth of printing up mls sheets, 5 or 6 phone calls, and 4 evenings of driving around looking at houses... Not a bad "day's work" for the several thousand $$ check he got out of that little deal. Perhaps I'm in the wrong line of work..." If I were a carpenter"
The scope of the agent's services varies greatly from place to place. Some "handle" the customers all the way through, while others won't return calls after a contract is signed.
Also, while state laws have specific obligations, some agents are very professional and responsible, while others don't take their duty seriously at all and violate their legal and ethical obligations all the time.
An agent who is both listing and selling has a strong incentive to make the deal fly because they're going to get both sides of the commission. Nothing wrong with that, and it often gives them a greater incentive to be more flexible on the amount, since they don't get anything if they can't make a deal.
As others have said, just remember that the agents works for the seller. As long as you remember that he/she is not your friend, everything should be fine.
SHGFor every complex problem, there is a solution that is clear, simple, and wrong.
-H.L. Mencken
This agent has worked hard trying to find us a suitable house. She happened to mention to DW one day about an open house she had that weekend so she would not be available for us, and DW just carried the conversation ... trying to be polite, killing time while driving around, etc. The agent was very reluctant to talk about the house. And even when she did show it to us, she has been acting different, more in the background, not promoting the house at all.
She know alot about what we can afford, and this particular house is well under the other we have been looking at. DW is finally coming around that just the two of us don't need 3000 sf. The sellers are retired and spend half the year traveling in a huge motor home (they are gone now), and the agent has said that she knows what their lowest acceptable offer is. So if we go after this one it should be an easy transaction. Even if we pay full asking price it's going to be cheaper than the others we have looked at. It's a long drive for me, but it has 4 acres, a nice storage shed, and a 12' x 30' concrete parking pad for the bus that I could easily convert into a shop.
"When asked if you can do something, tell'em "Why certainly I can", then get busy and find a way to do it." T. Roosevelt
1. she knows too much about both sides' price limits, probably making her a bit uneasy.
2. If you spend less than your max she make less money. She know alot about what we can afford,
If you spend less than your max she make less money.
I'm a Realtor, and I can tell you that this doesn't really enter into my thinking until the differential dollar amount gets quite high. Why? Because on a given sale, I'm highly unlikely to make more than 2% of the sale price. So a $10,000 bump-up in sale price grosses me MAYBE an extra $200. Usually more like $160.
For my part I truly don't think much about such stuff during the course of a house-hunt. I'm far more concerned about getting people a house that fits them.
When someone says to me (f'rexample), "We're thinking somewhere between $200-250K, I'll gladly show them any house I find in that range that meets their stated criteria.
More often than not in my experience, people wind up buying a house close to the top of their range simply because that's what fits their wants/needs best. Is it possible to "steer" a buyer into a more expensive home? Sure. I don't think the extra cash is worth the (for me) lost sleep, though.
Jason
I agree Jason. If a client told me that he wanted to spend 250k, I wouldn't waste my time dragging him around to houses that were 350k. I'd be afraid of losing him as a possible client.
blue
My only suggestion would be to watch what you say around the agent. As so many have pointed out, the agent basically works for the seller.
So anything the agent hears, the seller is gonna hear. I wouldn't rtust the agent to keep ANYTHING confidential.
Regardless of who holds the listing she is a sellers agent.
I believe there is an ethics issue that prevents her from being the buyers agent also.
You can use the link below to see the Realtor Code of Ethics - This code usually goes above and beyond state law, unless there is a direct conflict - state law trumps code. Poking around, it looks like Texas doesn't have "Dual Agency", so it might be more of a buyer beware situation... Be careful!http://www.texasrealestate.com/web/4/43/index.cfm"When Fascism comes to America, it will be wrapped in the flag and carrying a cross."-Sinclair Lewis
it looks like Texas doesn't have "Dual Agency",
Ed's moving away from TX, I think he's looking at houses in Viginia or someplace close.
Doug
why don't you work out a deal where the agent gives you an "allowance" to bring in a buyer's rep - say 1% or 1.5% of the transaction, otherwise you walk. That way the agent is still doing better than if the commission were being split with another realtor, but you get the benefit of somebody there to help you out.
"a realtor is someone who puts themselves in the middle of an inevitable transaction and then expects to get paid for it"
surmising & gleaning through this thread ( & responding to your still doubting post 22 )first of all she is Very incidental; you are the bldg professional and the house will sell itself or not
she has both ends she might not be as flexible on price - with you she has good chance for 6% (?) of total price / someone else comes along w/ another agent and the best she does is 3%at 6% of $300,000 a gross for her ( & the Co ) is $18,000
at 6% of $280,000 a gross for her is $16,800
both of those are much better than $9,000 for listing and I'd bet her % of selling both ends is better than if she just gets listingand she told you she knows what the lowest offer they will accept is - I would not want that of an agent listing my house - she may be playing into your hand / don't alienate anyone but now you know they will accept a lower offer
She was hesitant to show us the house because she did not want to seem to be pushing one of her own listings. That's all ... just trying to be fair to all houses on the market.
As noted, the sellers trael a lot ina motor home, and they are gone now. She was told what the lowest acceptable price was, so if someone made an offer she could immediately tell them if it would be acceptable without trying to track down the RV somewhere.
"When asked if you can do something, tell'em "Why certainly I can", then get busy and find a way to do it." T. Roosevelt
She was hesitant to show us the house because she did not want to seem to be pushing one of her own listings. That's all ... just trying to be fair to all houses on the market.
If she was my listing agent, I'd fire her.
blue
Some of your statements have sent flags up concerning this listing that you are interested in.
These may not be major, but they could be as simple as the sellers are have listed this home with the agent with a lower percentage fee and you agent is trying to steer you tow a home that has full commision fees. Just a 1/2% differnence on $400k home is $2,000 out his/her pocket.
Another this is that many times that when a agent acts as the buyer/seller agent, the broker takes less in commision, meaning more for the agent, so this doen't make sense either.
There might be other things going on the the agent is in privelged to tell you about at this time about the seller(such a probate, or damage) and is really is trying to protect you.
Personally, I'd probably pass on this one, something doesn't sound right
Some of your statements have sent flags up
Like what?
"When asked if you can do something, tell'em "Why certainly I can", then get busy and find a way to do it." T. Roosevelt
After a lot of persuading by us, she showed us a house she is also the selling agent for.
This statement seems to make me nervous . A job of an agent is to advertise a property to bring interested clients into to view the property. this is the same as having an open house. Most people that come to an open house are not coming with an agent.
She then had to ask the sellers for their permission to represent you also? This just doesn't sound right. But, then again, maybe she has been "bit" before in the past and is just overly cautious.
Another this is that many times that when a agent acts as the buyer/seller agent, the broker takes less in commision, meaning more for the agent, so this doen't make sense either.
Heh. That how they do things on the Left Coast? If I sell my own listing, my broker double-dips, I suppose on the premise that he's doing more work handling both sides of the transaction. I get double production numbers, and whatever's left of the cash (about 70% in my case).
There might be other things going on the the agent is in privelged to tell you about at this time about the seller(such a probate, or damage) and is really is trying to protect you.
In my neck of the woods (Nebraska) such matters are considered disclosable material facts, and cannot legally be concealed from the buyer, no matter who the agent represents.
She then had to ask the sellers for their permission to represent you also? This just doesn't sound right.
What sounds fishy about it? Round here, Realtors have to have written permission from all parties to a transaction to engage in dual agency. That way, everyone is on the same page. A representation contract with the second party (here, the buyer) is also necessary. In this case, both buyer and seller are my clients, as defined by state law.
Now, if I just sell one of my own listings to someone who walks into an open house, that makes the buyer a customer. The fiduciary bar is a bit lower there - for example, I have no confidentiality obligation to that buyer, as I do with a seller.
Jason
Don't know about how you are doing buyer representation, but here is a digression.
The best seller "Freakonomics" has a great chapter on real estate selling, and compares agents selling their own houses, their behavior re that, versus their behavior when selling for someone else.
When selling their own house, they are willing to wait for a longer period, often rejecting early offers in hope of getting a better offer later.
When selling your house, they will push you to accept that early offer, even though you might want to wait for a higher offer later.
It all has to do with the money, of course. Ten grand more, if gotten by waiting, is ten grand, if it's their house, but it is only about 2 percent of the ten, if it's your sale.
She cant represent you fairly. Kinda like asking you to wave your rights. She is telling you but she cannot fairly represent both.
Its not a good idea from your viewpoint. She is bound to protect her listing client.
Tim