I always purchase a listed property from the listing agent and never use an outside agent. During the last run on property 2000-2007 I lost so many properties because of unscrupulous realtors. I mean realtors were ripping sellers off by selling their property to close friends and investors without giving newbies like me a chance.
I would put bids on properties for over the asking price and the listing agents would eventually sell the properties to their own clients at a lower price and collect the 6 percent commission instead of selling it to me at a higher price and receiving a 3% commission.
That made me so mad that now I do not care who my agent is, I will only purchase from the listing agent because I understand greed. Greed does something to realtors and generally cost the unsuspected home owner.
And guess what I have landed just about every property since I started that philosophy.
We recently try to purchase a duplex. The listing agent only allow buyers to go during their scheduled open house time. The deal ended up close before the open house even took place =(
Rental Property Investor · Louisville, KY · Member since 2020 · 3 posts · 1 vote
6y
@Thomas J. Budka
Did you notify the original listing agents’ broker? I can’t imagine they would be pleased to learn they lost a sale due to their agents’ personal greed.
Investor · The Creek, WV · Member since 2014 · 890 posts · 1k+ votes
6y
I do the same thing. I never use my own agent. I'm capable of negotiating and representing myself.
I also think the listing agent is more willing to work with me because they are keeping the full commission. I could be wrong, but I truly feel that is the case.
Investor · Menomonie, WI · Member since 2016 · 5 posts · 0 votes
6y
I never went the route of buying a property using my own realtor because of exactly what you stated however I use their greed against them by playing hardball in negotiations! I had one realtor tell me that a bidding war was about to start after we submitted an offer.
I told the realtor to contact the seller immediately because we are rescinding the offer. We want nothing to do with a bidding war and if someone else wants it they can have it we're onto the next property.
The seller never countered, just signed the agreement and we were way below the asking price. Sale price was $196,000 and we offered $176,000 with $3100 in rents coming in and very few expenses besides taxes, insurance, etc..
Cash on Cash basis was 14% so we didn't balk and got it financed. We just received an offer to buy it for $325,000 3 years later and we turned it down because it's worth more than that now.
We recently try to purchase a duplex. The listing agent only allow buyers to go during their scheduled open house time. The deal ended up close before the open house even took place =(
Investor · Niceville, FL · Member since 2017 · 451 posts · 366 votes
6y
Can I play Devil's Advocate for a second? (I'm a new agent and haven't been on both sides of a transaction, but I have put lots of offers on small multis for myself before becoming an agent)
These commercial brokers have been in the biz a long time (perhaps too long, but that's another discussion). They know the types of investors who kick tires and the types that close deals. I don't see much wrong with going right to the folks they know will close the deal first - it is good for the seller, good for the buyer, and good for them. Everyone (hopefully) wins. Does it screw the little guy? Yep. Have I been screwed? Yep. But hey when I'm the "big" guy I would want that treatment from the listing agent as well. And generally in commercial, what you guys are considering dual agency is usually allowed with agreement (though it is usually NOT allowed in residential without signing a no-brokerage relationship agreement). When it comes to residential transactions, like everyone is pointing out, it is unethical to not present all offers.
On the other hand, in my area, I see agents preying on young unwitting military families PCSing to the area and it infuriates me. Another military spouse and I are working on a way to fix this but it's really disappointing. They're putting their wallets before the financial interests of these families.
Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
6y
Having lots of lead sources helps when one dries up or isn't working the way you want it to. I don't get mad at this kind of stuff . I just focus my efforts on a different lead source or create a new one.
Real Estate Agent · Philadelphia, PA · Member since 2013 · 451 posts · 369 votes
6y
This thread is specifically why dual agency should not be allowed. The agent's incentives will never be properly aligned to do what is best for their clients.
Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
6y
Dual agency sucks!!
I have done it a few times as a listing agent and very much dislike beeing in that position: you can serve only one master. In any case you need consent from both parties. If you are a seasoned investor and are buying low priced properties it may work here and there, but to assume that it will automatically give you a competitive advantage is a litte naive and stems probably for superficial understanding of how it works.
Here is why:
No better way to break trust with your seller client, than favoring the offer you stand to make twice the money. It's also against the law (State law defines fiduciary duties, at least Wisconsin does), not to speak of unethical and the agent might loose NAR memebership and the Realtor designation.
Every succesful agent will tell you that most of their business is referral based; no client refers a bottom feeder who plays dirty.
If your offer was not selected and you should get it back as rejected and signed by the seller. If the agent will not provide that, reach out to the agents broker.
Dual agency is not only a tricky balance that can blow up in your face very quickly, but it also takes a lot more work for the listing agent. Keep in mind the work only starts when you have an AO. I'd rather have a good buyer's agent on the other side..
A great buyer's agent will give you a competitive edge, not cost you one. When you do a lot of deals, you get an intuitive feel for the market, pick up a lot of "clean" tricks and save or make your client a few chuncks of money along the way.
If you have had a bad experience, you've been working with a bad agent!
I will say this however, as with every tool in the bag, there is a time when it's right and the circumstances are such that working with the listing agent is indeed the best way to do it, but that's the exception and not the norm!
Rental Property Investor · Los Angeles, CA · Member since 2019 · 35 posts · 35 votes
6y
@Marcus Auerbach you are spot on! My first home I thought I had an edge by going with the listing agent.... I got screwed!!
I was young and I didn’t understand that although I felt like I had a one up on everyone, I was at the mercy of agreeing with the agent that continued to remind me of the other buyers. Issues that would be found after inspection, to include what I would typically ask for if I felt like there was room to negotiate monies, would be talked down and presented to me like The agent got me in the door.
I’m an agent and I tell my client when I’m selling a home, that I will not represent the other side. I’ll pass it to another agent in my office. I’m transparent in telling my seller that when a buyer feels like they would have an edge if they used me, that I have the sellers best interest in mind.
I’ve seen these agents you all speak about! In fact it makes me so mad they’re still in the business.
Real Estate Agent · Geneva, IL · Member since 2015 · 403 posts · 172 votes
6y
As a Realtor, this infuriates me! BUT let’s talk facts. The listing agent’s sole responsibility is to get the highest price for their seller. The buyer’s agent responsibility is to get the house at the lowest price for their client. When buyers call the listing agent, the listing agent doesn’t have any fiduciary responsibility to the buyer because they represent the seller. You should never use the listing agent when you’re the buyer.
Now, let's talk dual agency. When an agent acts as a dual agent they have to have permission from both sides. They lose the ability to negotiate to for the seller or to advise them. If everyone is playing by the rules, the only things you're allowed to do is to tell the seller that the buyer is preapproved and can afford the house and then share the same comps with both sides. The seller and buyer negotiate the price, the closing date, earnest money etc. in these cases for Agent gets both sides of the commission unless there was some type of variable commission discussed and disclosed in the MLS.
Real Estate Agent · Memphis, TN · Member since 2019 · 261 posts · 253 votes
6y
You hate to hear it, but I can understand why some Buyers want to go directly to sellers/LAs. Anytime I submit an offer for a client and we don't hear back/it's turned down with no explanation, I immediately bring in that Agent's broker to confirm that this was shown to the Seller and to provide a response on record to the offer. I think a big part of the problem is that a lot of Agents don't really fight for their clients like they should which disheartens the buyer and forces them to do exactly what they want: go running to them so they can double-side. I even warn my clients about this tactic and that we will need to be aggressive to get a response out of certain Agents.
Sad to hear. The true victims are the selling homeowners. The persons selling their nest-egg, retirement cash, savings. The seller pays 6% to the realtor and will most likely never findout that additional money was left on the table.
And guess what, I like good realtors. Especially, when they have pocket listings and graciously makes me one of their first few calls.
Keep in mind in the real world its very common for a listing agent who double ends a deal to take a big discount. If one of my listing agents procures the buyer the total commission goes down.. its never the full commish.. this is very standard for those that have experience at this.
...Wow I didn't know there was a difference, other than saving ink on the typewriter...Realtor vs real estate agent.
I've been a Realtor in the past and currently am a real estate agent, not a Realtor. When you become an agent, you quickly realize that there is an entire industry out there feeding off of agents, fees to join different memberships like Realtor, fees for marketing, lead generation, etc. This industry likely makes more from agents than the agents do because many agents pay the fees whether they are successful or not. I am very careful about what fees I take on as I'd rather work efficiently and pass the savings onto my clients.
There is no difference in ethical requirements that I can find after both researching it and living it. The same ethical requirements apply, at least in my state, whether you're a real estate agent or real estate agent that pays to put the Realtor logo on your card. We are all required, Realtor or not, to pass the same licensing requirements, take x hours of continuing education on ethics, law, etc., before renewing our required state license every 2 years. The state requires us to perform ethically, presenting offers timely, dealing fairly with clients and customers, etc., and it''s the state Real Estate Board that can remove an agent's license or issue other penalties, or state legal authorities that cover criminal prosecution if an agent breaks the law. The Realtor association does not have that authority. Those that say only Realtors are required to act ethically are just misinformed.
The biggest difference I can find having been on both sides of this is simple marketing -- Realtors can use the Realtor logo, receive created Realtor designations if they pay more to take association classes, which they can use to promote themselves (more marketing like the logo), and may benefit from the Realtor commercials promoting their membership. I've worked with many agents of high character, Realtor or not, and also some that are extremely questionable, Realtor or not.
Real Estate Broker · Indianapolis, IN · Member since 2016 · 32 posts · 12 votes
6y
@D Turner
When I list properties that need any sort of work done to them, I refuse to represent out of state buyers on the buying side. Considering they aren't here to view the property, those buyers could always come back at me and say I just wanted to double end the deal and didn't care about their best interest. It's not worth the risk in my business because an inexperienced buyer is hungry for a deal...which ends up not being a deal for them. My job as the listing agent is to represent my seller while also being an ethical person for all in the transaction. You could actually say I'm doing best for the buyer by telling them to get unbiased representation and opinion, especially in a quick multiple offer situation.
My mindset does change a bit with local people but I don't run into that nearly as much. Most local investors have their own Realtor.
In addition, a lot of buyers try to lure me to represent them in those situations by saying "I'm buying so many properties in said area and you could represent me all of those deals" But I know that's not the case. They'll call the next listing agent the second a new one comes up for sale. The attraction of potentially collecting all of the commission from future puchases doesn't change the duty to my seller first.
So I say be prepared to have a buyers agent as well in case you get a listing agent that won't represent you. But good luck finding a good experienced buyer's agent that knows you only use them when it's convenient and in a pinch. I believe creating a good relationship with someone experienced and hungry is invaluable.
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
6y
I made an offer $30K above list on a rare property. The seller's realtor got the offer because he had a question that my agent answered. We were willing to increase the offer. We thought we would at least get a counter. We would have been unlikely to not buy this based on what we were willing to offer. No response at all to our offer until we were told it was under contract. Guess the price? Exactly what we had offered. Guess the buyer's agent? Of course it was the selling agent.
I suspect he told his buyer our price. Maybe he presented both offers to the seller. He likely sold his buyer to the seller. He may have discouraged a final and best.
I would have paid at least $30K more (maybe even $50K more) than the selling price ($60K to $80K over ask) because it was the only property like this one to enter the market in at least 3 years. I was willing to remove appraisal and inspection contingencies. Basically we wanted this RE and were not given a decent chance due to the agent having his own preferred buyer. The agent cost the seller at least $30K, but he got his check.
Flipper/Rehabber · Seattle, WA · Member since 2015 · 333 posts · 459 votes
6y
I do the same. On every Purchase and Sale Agreement I insist it be filled out completely, including the seller's information. I would not try to bypass the agent to negotiate with the seller but I have contacted the seller just to verify they got my offer. The percentage of unethical real estate agents is probably the same as unethical people in any profession - too darn many.
@Nick C. How do you approach the listing agent without representation? How do you get them to be a dual agent?
In Florida, Dual Agency is not allowed, however Florida supports three agency models, Single Agent, Transaction Broker and No-brokerage. By default all agents are Transaction Brokers when there is no prior notification to the parties; Because some of the duties to the public as a Transaction Broker of dealing honestly and fairly, of limited confidentiality, AND of care and diligence, many agents that are transaction brokers should probably think twice about working both sides of a transaction. If found in that situation, at least in Florida, the agent should enter into agreements with both parties as a no-brokerage agency which is a signed document removing the duties of care and diligence and limited confidentiality. I agree with some of the other posts I read - if you're a great agent you will do the best for the side you were hired for. Doing both sides means you're working for the completion of the transaction not either side, and frankly in a residential transaction, the buyer needs to be more aware and take on all the care and diligence. This may be fine for sophisticated buyers/investors, but I wouldn't want to see new buyers in this situation. My 2 cents. I sit on the Professional Standards committee for my association - so this is something I care about.
Realtor · Hendersonville, NC · Member since 2015 · 51 posts · 24 votes
6y
@NA Turner - I always request the sellers initials on the offer to be sure that they saw it. I hold the other agent’s feet to the fire on this. It they don’t deliver you can upset the contract and force the seller to sell to you (I haven’t done this forced sale but have heard of it happening).
Any agent that works with investors deserves their full commission. I have worked with many investors and a lot of investors will suck an agent’s time. I go above and beyond for my loyal clients and those that value my time and expertise. They know I will fight for them to get the best deal possible and make sure that they are treated fairly.
Involved In Real Estate · Somerville, MA · Member since 2013 · 8 posts · 1 vote
6y
I can confirm this has happened to me, as a buyer's agent, on multiple occasions. We've submitted offers above asking, with more than favorable terms just to have the property sold to the listing agent's own client which would be confirmed on MLS after the property sold. Alternatively, while listing properties, I've encountered buyers attempting to use the commission as leverage by offering less and saying if their offer is accepted it's more favorable to us since we'd make more commission.
Rule of thumb, at my office, will always be as an agent representing any party, you to do what's in the best interest of your client, not your pocket. Doing the right thing will always outweigh the few thousand more you'll make on one deal.
Engineer · Portland, OR · Member since 2014 · 1k+ posts · 1k+ votes
6y
@NA Turner as someone else said I believe these “inside sales” where much more common with bank owned property during the housing bust. I once lost a bid then later found out I had a higher cash offer but the winner offered to “clean out the house” while I didn’t explicitly say that. Pretty sure it was a bull$hit, CYA story to give the realtor some semblance of a flimsy excuse if needed.
Another deal I lost by a last minute “blind” bid that was magically $100 more than my offer.
