Using the Listing Agent as Your Buyer’s Agent?

Buying & Selling Real Estate
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Using the Listing Agent as Your Buyer’s Agent?

Steve A
Member since 2009 · 14 posts · 1 vote

What do you think about using the listing agent to help facilitate a buy?

For the last three months, I’ve been using a seller’s agent to make offers on a SFR.
But have been outbid on three houses.

For my next try, I’m thinking about using the listing agent. I see a couple of definite advantages:

1. Enables the total cost to be reduced by up to 3% (if the agent forgoes the buyer’s agent’s portion commission). Some agents are amenable to this, others aren’t. One guy I’ve talked with was very upfront about it. “If you have me represent you, I can lower the commission from 6% to 3% and the seller can drop the price by 3% and still net the same amount from the sale.â€

2. The other advantage is information sharing. “If you have me represent you, I can help you make the winning bid because I’ll know what the other bids are.â€

I understand that both “advantages†may have some ethical issues attached to them. But, putting that aside…

What are some of the disadvantages to having the listing agent (or someone from the same office) also represent me (the buyer)? I understand that conflict of interest makes this practice illegal in some states, but not in CA, where I’m located.

Are there some specific issues I should lookout for as a buyer?

Please, this isn’t meant to be an ethics lesson.

Thanks,

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Will BarnardPro Member
Moderator
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
16y

I will chime in here as I have quite a bit of experience in this area.

What Jeffrey stated is spot on. I can't even count the number of times agents have pushed a buyer who they are representing to purchase house A rather than house B because their commission would be higher. If that is not a violation of ethics, nothing is!

At any rate, I somewhat disagree with what Richard stated, although I respect his opinion. He is right in that you need to be careful who you trust, however, countless times I have formed great relationships with top REO brokers (which is a necessity in the REO biz) and although they represent the banks as the sellers, there is somehwat of a non-personal attachment as banks are just big corporate entities and I am a real person in their office whom they like, whom they drink beers with, whom they joke and laugh with on occasion.

These relationships produce great deals. I get deals at lower prices then what others have offered at times. I get deals and know about deals before anyone else. I only get this if the brokers and agents are capable and williing to quote, unquote bend the rules.
Just make sure they bend the rules (as far as their rules are concerned) in your favor and not the banks. They still have to bring in a reasonable BPO price as it will be checked via the banks outside appraiser and they still have to perform the duties for the bank.
But having the listing broker dual represent gets them the ability to double dip the commissions (rarely will you find that they will represent both sides for only the 3% (and why should they, they take on double the liability!).

Moral of my long story, I believe that it is essential to make your offers (at least for REO's) through the listing broker and not through another buyer's agent.

Podcast Guest on Show #130
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  • Jamie Keeton
    Title Representative · Fort Lauderdale, FL · Member since 2009 · 62 posts · 24 votes
    16y

    I think you should really be careful. If you do not know the listing agent, it could also be a disadvantage. You would have to make sure that the listing agent isnt only telling you what you want to hear in order to get another sale under their belt and commission check. I think there are an enormous amount of great realtors out there, but how do you know if you are dealing with the most honest realtor unless you get to know them.

    From my personal experience, I had a dual agent during my closing and they convinced me to use their inspectors. Everything passed with the exception of a few cosmetics. Then my heat and air immediately went out, electrical wiring had to be replaced and the roof began to leak. I never outwardly blamed the agent or the inspector, but it was very hard not to keep thinking I had been duped as a first time homebuyer.

    0Reply
  • Richard Warren
    Real Estate Investor · Las Vegas, NV · Member since 2008 · 1k+ posts · 447 votes
    16y
    Originally posted by Steve A:


    2. The other advantage is information sharing. “If you have me represent you, I can help you make the winning bid because I’ll know what the other bids are.â€

    This violates the agent's code of ethics. If the agent is willing to do that what else is he/she willing to do? I NEVER use the listing agent to represent me. The listing agent has a legal and ethical obligation to act in the best interests of the seller. I would not want to work with an agent who is willing to violate that.

    :cool:

    0Reply
  • Jeffrey K.
    Real Estate Investor · Milwaukee, WI · Member since 2008 · 1k+ posts · 671 votes
    16y

    The "realtors code of ethics" is a joke. Most of them do not follow it. They all talk behind their buyer's/seller's back to get the deal done. They are just as bad as any other salesmen, but pretend to follow this nobel "code." Don't be fooled. Do whatever gets the job done. I cant stand realtors (as you might be able to tell) so I used the listing agent until I find an agent that I like to represent me on my next deal. I am usually able to work with an agent for a few months before we get in an argument because I am not offering what they want on a GREAT deal that covers PITI! Realtors call these deals "CASH COWS."

    1Reply
  • Bienes Raices
    Orlando, FL · Member since 2009 · 2k+ posts · 282 votes
    16y

    What about using a transaction broker (representing both buyer & seller in a limited capacity), has anyone experience with this?

    0Reply
  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    16y

    I will chime in here as I have quite a bit of experience in this area.

    What Jeffrey stated is spot on. I can't even count the number of times agents have pushed a buyer who they are representing to purchase house A rather than house B because their commission would be higher. If that is not a violation of ethics, nothing is!

    At any rate, I somewhat disagree with what Richard stated, although I respect his opinion. He is right in that you need to be careful who you trust, however, countless times I have formed great relationships with top REO brokers (which is a necessity in the REO biz) and although they represent the banks as the sellers, there is somehwat of a non-personal attachment as banks are just big corporate entities and I am a real person in their office whom they like, whom they drink beers with, whom they joke and laugh with on occasion.

    These relationships produce great deals. I get deals at lower prices then what others have offered at times. I get deals and know about deals before anyone else. I only get this if the brokers and agents are capable and williing to quote, unquote bend the rules.
    Just make sure they bend the rules (as far as their rules are concerned) in your favor and not the banks. They still have to bring in a reasonable BPO price as it will be checked via the banks outside appraiser and they still have to perform the duties for the bank.
    But having the listing broker dual represent gets them the ability to double dip the commissions (rarely will you find that they will represent both sides for only the 3% (and why should they, they take on double the liability!).

    Moral of my long story, I believe that it is essential to make your offers (at least for REO's) through the listing broker and not through another buyer's agent.

    Podcast Guest on Show #130
    3Reply
  • Dee Xixi
    Real Estate Investor · waltham, MA · Member since 2009 · 212 posts · 8 votes
    16y

    just to add to Jeffrey comments. I have a buyer agent which we get along pretty well as a person but she paralyze whenever i am making certain offers, either she thinks the bank or the other party will reject them. few times we bump head but still she wont submit any offer than not typical or straight from the RE book. i have been thinking of dumping her she is so ice a great to me.

    0Reply
  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    16y

    Dee, you are experiencing just one of many problems with using a buyer's agent to purchase REO's.

    Podcast Guest on Show #130
    0Reply
  • Brian LevredgePro Member
    Investor · Chattanooga, TN · Member since 2009 · 1k+ posts · 903 votes
    16y
    Originally posted by Dee Xixi:
    just to add to Jeffrey comments. I have a buyer agent which we get along pretty well as a person but she paralyze whenever i am making certain offers, either she thinks the bank or the other party will reject them. few times we bump head but still she wont submit any offer than not typical or straight from the RE book. i have been thinking of dumping her she is so ice a great to me.


    You need to find a new agent ASAP. Your agent's job is to represent your interests. When they argue with you on submitting offers, then they really aren't representing your interests. There are millions of agents out there (literally). You should be able to find one that is hungry enough and willing enough to work with you on your terms.

    It's tougher in the beginning when people don't know who you are, but when you can start taking down some deals word will get out and you will start to hear about better deals. One of my buyer's agents is also an investor and has the same mindset as me. I'll look at a property and talk to him about what to offer. I low ball offers because I'm not going to overpay. What's funny is that he is the one telling me to offer less some of the time. You gotta love that.

    0Reply
  • Mark Brian
    Involved In Real Estate · Anderson, SC · Member since 2008 · 350 posts · 70 votes
    16y

    Your agent should not refuse to submit an offer but should advise you that it might not fly and to expect a counter. But what does it hurt to get the negotiating ball rolling with a lower offer? Got to start somewhere and it might as well be at a price that is better for my client.

    Just always remember the listing agent is working for the seller. If you are experienced, competent and very knowledgeable regarding the contracts and addendums, then there is nothing wrong with approaching them.

    1Reply
  • Steve A
    OP
    Member since 2009 · 14 posts · 1 vote
    16y

    Good discussion.

    Thanks.

    So the take away seems to be:

    Information is king. The listing agent is a great source of dope. While E code says not to, it's common practice to share info 'among friends'. Enlisting the listing agent is a good way to make friends. But don't forget which side the agent's bread is buttered.

    0Reply
  • Dee Xixi
    Real Estate Investor · waltham, MA · Member since 2009 · 212 posts · 8 votes
    16y

    Do you guys think is wrong to contact an owner behind my buyer agent to submit an offer or talk to the owner about a deal. Two weeks ago, i ask my realtor to submit a particular offer, afetr much back and forth, supposely she submitted it, a day later she told me that the owner wants more money down. my feeling tols she just dont feel confortable with my wording and my price.
    Any thoughts

    0Reply
  • Jamie Keeton
    Title Representative · Fort Lauderdale, FL · Member since 2009 · 62 posts · 24 votes
    16y

    Dee,

    Me personally... I would say it is not wrong. It is your transaction. If you feel that something is not right, you can take any steps necessary to feel comfortable. You may find that your gut is speaking correctly. And you may find you were not correct. Either way, you will have a peace of mind that you currently do not have.

    I think it would be respectful for you to give your realtor the heads up that you would like to speak to the seller directly. If she supports you as your buyer, she would support you in your wishes as well. Just my personal opinion and I am not a realtor so hopefully I didnt offend anyone.

    0Reply
  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    16y
    This advice is premature and is given without the knowledge of all the facts.

    First off, do you have a written agreement with this buyer's agent? If so, it may very well stipulate that you can not. You should consult an attorney.
    If you don't have any written contract between you two, then it is just a moral issue and not a legal one - your choice which way you want to swing.

    Podcast Guest on Show #130
    1Reply
  • Jamie Keeton
    Title Representative · Fort Lauderdale, FL · Member since 2009 · 62 posts · 24 votes
    16y

    That is very true. Of course you first always want to take into consideration any legal obligations and/or ramifications. My response was provided under the assumption that Dee does not have any since Dee did not mention any.

    Thank you Will for pulling that point out of my response because it is a very valid and important point to make. Will, I am curious however, what would your choice be if you were in Dee's position and you had no binding legalities between yourself and your realtor whom you were second guessing?

    To my response, I would also like to add that if you are dealing with bank sellers, they do not like to be contacted by anyone other than their listing agent and it could be a turn off for them.

    0Reply
  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    16y

    Jamie, that is a fair question. To answer, I would not be using a buyers agent in the first place, so I would not be in that position. Hypothetically, if I was in that position, it would depend. Is the agent not submitting offers I want to submit? Is the agent not actually pulling their weight? If so, I would not go around their back, rather, fire them and then go direct.

    Podcast Guest on Show #130
    2Reply
  • Jamie Keeton
    Title Representative · Fort Lauderdale, FL · Member since 2009 · 62 posts · 24 votes
    16y
    Originally posted by nationwidepi:
    Jamie, that is a fair question. To answer, I would not be using a buyers agent in the first place, so I would not be in that position. Hypothetically, if I was in that position, it would depend. Is the agent not submitting offers I want to submit? Is the agent not actually pulling their weight? If so, I would not go around their back, rather, fire them and then go direct.

    HAHAH, a much better answer than I could have given. :D

    0Reply
  • Anson YoungBusiness Member
    Flipper/Rehabber · Denver, CO · Member since 2009 · 1k+ posts · 726 votes
    16y
    Originally posted by nationwidepi:
    I will chime in here as I have quite a bit of experience in this area.

    What Jeffrey stated is spot on. I can't even count the number of times agents have pushed a buyer who they are representing to purchase house A rather than house B because their commission would be higher. If that is not a violation of ethics, nothing is!

    At any rate, I somewhat disagree with what Richard stated, although I respect his opinion. He is right in that you need to be careful who you trust, however, countless times I have formed great relationships with top REO brokers (which is a necessity in the REO biz) and although they represent the banks as the sellers, there is somehwat of a non-personal attachment as banks are just big corporate entities and I am a real person in their office whom they like, whom they drink beers with, whom they joke and laugh with on occasion.

    These relationships produce great deals. I get deals at lower prices then what others have offered at times. I get deals and know about deals before anyone else. I only get this if the brokers and agents are capable and williing to quote, unquote bend the rules.
    Just make sure they bend the rules (as far as their rules are concerned) in your favor and not the banks. They still have to bring in a reasonable BPO price as it will be checked via the banks outside appraiser and they still have to perform the duties for the bank.
    But having the listing broker dual represent gets them the ability to double dip the commissions (rarely will you find that they will represent both sides for only the 3% (and why should they, they take on double the liability!).

    Moral of my long story, I believe that it is essential to make your offers (at least for REO's) through the listing broker and not through another buyer's agent.


    As an REO agent, this is 100% correct
    Podcast Guest on Show #235
    0Reply
  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    16y
    Thanks, where are all my votes? :wink:
    Podcast Guest on Show #130
    1Reply
  • Anson YoungBusiness Member
    Flipper/Rehabber · Denver, CO · Member since 2009 · 1k+ posts · 726 votes
    16y
    Originally posted by nationwidepi:
    Thanks, where are all my votes? :wink:


    Why vote for you if I could have written that myself? j/k vote'd!
    Podcast Guest on Show #235
    0Reply
  • Steve Babiak
    Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    16y
    Originally posted by nationwidepi:
    Thanks, where are all my votes? :wink:


    Hey Will,

    Rich is heading to Cancun for a few days, and won't be online so much. So you'll be able to easily increase the "influence score" gap soon enough!

    0Reply
  • Eddie Ziv
    Investor · Mableton, GA · Member since 2009 · 1k+ posts · 465 votes
    16y

    I use a buyer agent mainly to do the paperwork but I wouldn't trust his opinion (If I could find any...) as far as I can throw a chair...
    He is a very nice guy but he always try to push for the most expensive properties and it is way too obvious why... more Commission... I don't blame him, he just want to make money and I just want to save it....

    0Reply
  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    16y
    Originally posted by Eddie Ziv:
    I use a buyer agent mainly to do the paperwork but I wouldn't trust his opinion (If I could find any...) as far as I can throw a chair...
    He is a very nice guy but he always try to push for the most expensive properties and it is way too obvious why... more Commission... I don't blame him, he just want to make money and I just want to save it....
    This is exactly right and evidence of what I have been saying all along in numerous posts. THERE is NO ethics for agents, if there were, they would not push the higher priced properties or pass on the listings with lower commission percentages!

    Thanks for your example Eddie. By the way, what happened with that potential rehab near you that you were going to send me info on? Send me an email or PM.

    Will B

    Podcast Guest on Show #130
    1Reply
  • Eddie Ziv
    Investor · Mableton, GA · Member since 2009 · 1k+ posts · 465 votes
    16y

    Will, I went there again last week (Doing my occasional Dog-walking there) and there was a realtor sign already. That was after the house was empty and bare all spring and summer, I followed up and apparently it's listed for $500,000
    http://www.trulia.com/property/1086219153-3411-Bonnie-Hill-Dr-Los-Angeles-CA-90068
    I don't think it's a great deal anymore, although for a long run it is a good buy considering the area and the view...

    0Reply
  • Steve A
    OP
    Member since 2009 · 14 posts · 1 vote
    16y
    Originally posted by Steve A:


    bla bla bla...
    Are there some specific issues I should lookout for as a buyer?
    Thanks,

    Back to my original question...

    What should I look out for when using the listing (split loyalty) agent?

    0Reply
  • Eddie Ziv
    Investor · Mableton, GA · Member since 2009 · 1k+ posts · 465 votes
    16y
    Originally posted by Steve A:
    Originally posted by Steve A:


    bla bla bla...
    Are there some specific issues I should lookout for as a buyer?
    Thanks,

    Back to my original question...

    What should I look out for when using the listing (split loyalty) agent?

    A good "buyer's agent", and as mention before, is hard to come by, should be creative when it comes to negotiation. For example, in a case of multiple offers, your run-of-a-mill agent will tell you to secure your buy by submitting a higher (and some times much higher offer) because he /she gets nothing if you lose. They don't care if you overpay.
    A good agent who think more about long-term relationship with you would suggest a conditional offer:
    $1,000 (or $1,100, $1,200, etc) over the highest offer not to accede X dollars. That means that you can practically eliminate the most of the competition, you may pay lots of $ bellow of what you would have paid in the first scenario and at the same time you set a maximum price.
    0Reply
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