Dual agency for a lower price: yay or nay?

Question

I am in the process of purchasing a condo as investment, and it occurred to me I may get a deal on the purchase price if I ask the listing agent to represent me as the buyer as well. I thought the agent, in wanting to get both sides' commission, would try to make the deal work even if my offer price is lower than the market price.

Has anybody tried this? Am I mistaken in my reasoning? I have purchased properties before and am fairly familiar with the documents and purchasing process myself.

Thank you!

Has anybody tried this? Am I mistaken in my reasoning? I have purchased properties before and am fairly familiar with the documents and purchasing process myself.

Thank you!

Russell Brazil · Answer

I see people on BP post this idea time in and time out, and frankly it is ridiculous. This only works if the listing agent happens to be unethical and is more concerned with double ending the deal than representing their client. Sure there are some people out there like that, but how many of those people are listing a ton of properties? Not many.

As a listing agent, I love when unrepresented buyers come directly to me, not so much since I can make more commission, but because I know that buyer is going to pay more and waive contingencies than if they had proper representation....then I convince them what a good deal they got, and how smart they were for not getting another agent involved.

Mindy Jensen · Answer

@Patricia J. , did you see it with a buyer's agent? I have heard people have success with this strategy, however I don't recommend it because then no one is looking out for your interests.

Account Closed · Answer

In most states the listing agent is a "fiduciary" of the seller and is required to get the highest price they can negotiate. My question is "how can a realtor who is getting money from the seller to represent them honestly represent both sides in a negotiation?" Seems to me the agent is obligated to the seller. You can however represent yourself and tell the seller that you will agree to a 3% fee to the listing agent but not dual agency (6%). The selling agent is expecting 3% and will not or should not argue. You then reduce the asking price by 3%.

JoJo Tucker · Answer

I believe Dual Agency is much more prevalent in Business Brokerage. It appears it has already been mentioned, but the Listing Agent owes fiduciary responsibilities to the seller and that includes getting them the best offer possible. You would benefit more from hiring your own agent as the commission is usually contracted to be paid by the seller. Dual Agency restricts the advice that can be given to a potential buyer, especially when it comes to the offer. Hoper this helps!

Lee L. · Answer

I probably wouldn't do it if it was your first deal. But if you know what you're doing, then yes, it's a way to get in front of the line, especially in a competitive market such as L.A. Don't expect your "agent" to look out for you at all though.

David Avetisyan · Answer

I’m not opposed to the idea, but be prepared to do your own negotiating with the realtor. The chances of them protecting your best interests is slim.

To your success!

Charlie MacPherson · Answer

@Patricia J. Unless you are experienced in both buying real estate and in negotiating your way through difficult deals, I don't recommend going in unrepresented. And that includes using a dual agent.

You need a sharp agent who puts YOUR interests ahead of everyone else's, including their own - which is why you shouldn't go with a dual agent.

When push comes to shove and you need your agent to push hard for a concession, a dual agent won't be able to do so because they're required to act as a neutral party.

I'm really surprised to hear that a broker won't allow an agent to do their own deals. That seems short sighted at best and REALLY dumb at worst.

I think the better idea is to use a buyer's agent from your own firm and get a 30% referral fee.

Patricia J. · Answer

@Russell Brazil When I was posting my question I felt there was something not quite right in my reasoning. This is it!

Patricia J. · Answer

@Mike M. Thanks! I thought about going without a buyers agent too. What complicates matters for me is I am licensed in California, and my employing broker doesn't allow me to do my own deals :(

Since I can't represent myself as an agent, I thought about using the dual agency method.

Patricia J. · Answer

Thank you everyone! It's good to know this could be an option at least.

Dual agency for a lower price: yay or nay?

Dual agency for a lower price: yay or nay?

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