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.

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  • Anson YoungBusiness Member
    Flipper/Rehabber · Denver, CO · Member since 2009 · 1k+ posts · 726 votes
    16y
    Originally posted by Eddie Ziv:
    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.

    Out of the 35 banks we work with, none accept escalation clauses unfortunately. That isnt to say there isnt a bank out there that will do it, but the big/med. ones dont.

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

    Some qualifications of a good buyers agent: they should be an ABR, experience in the specific types of properties you are making offers on, and also be experienced investing for themselves.

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  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    16y
    Originally posted by Steve A:
    Back to my original question...

    What should I look out for when using the listing (split loyalty) agent?
    Nothing other than your standard due diligence on the property (assuming your are talking about REO agents/brokers).
    So long as you understand contracts and addendums, you should be fine. You will want to watch out for specific wording in the bank's addendums they send over, as some will attempt to sneak some things in there you may not be in agreement with. I always suggest you have your RE attorney review all the contracts and addendums you sign (for those that are complicated or beyond your scope of knowledge)

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  • Joanne Freedmon
    Real Estate Consultant · Member since 2009 · 24 posts · 1 vote
    16y

    I agree as mentioned above. As an reo agent the relationship is the main purpose for selecting the correct offer even if the buyer has an agent. If we know the agent understands reo's and is easy to work with then it is a slam dunk. I have also had some great luck working with a buyer direct to my listing from one of my am companies [LINK REMOVED]. Their system is pretty nice when you get a buyer and double end a deal without having to do anything.

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