Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
12y
Nick had it to the dual agency part, then...well,
No, an agent has a fiduciary responsibility only to the seller.
Anything you say to a transactional broker that would benefit the seller, that agent is required to inform the seller, the agent has no duty to inform you of anything the seller may say, or what they may do.
It is not an arrangement for new buyers/investors. You'd need to know what that agent must and can do and you're not represented at all, the agent usually gets the full commission, so why would anyone do that (unless the price came down and the agent agreed to less). If that Realtor is pulling full commission, you might as well be represented, it won't really cost you any more......at this level. Get an agent! :)
Wholesaler · Holiday, FL · Member since 2013 · 571 posts · 221 votes
12y
Brenda,
Yes; there is a benefit to the seller - as you, the buyer, would then have no one actually representing you.
Any selling agent who suggests this has already demonstrated that they won't have your best interests foremost in their attentions. They are offering to "represent you" to avoid having to additionally share the commission with the Realtor that you would otherwise have.
Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes
12y
Though I would not necessarily recommend it to everyone, I actually prefer to work with the selling agent whereby I represent myself. Here's the deal - in a negotiation the objective is to get face to face with the seller. This is one reason I typically don't go after listed properties, but any time I do it's because the seller's agent understands that I need to be face to face with the seller. I can not put multiple offers together without having access to seller. Most agents run from this like the plague, but some will play ball - if not, I pass. There are better ways to get deals than a hostile negotiation...
Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
12y
There's a BIG benefit for the agent as they do not have to share the commission {other than the bit that goes to their broker}!
That said, I share Ben's approach - I like to sit across the table from the Vendor and the fewer other folks {agents} interjecting themselves into the dialogue {looking out for their interests} the smoother it usually goes.
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
12y
Keep in mind guys, we have mostly new people here, having no idea of the agency relationships, just isn't fair to suggest they go in the lion's den, they can learn what the do's and don'ts are without having to get messed over.
Now, Ben, Steve and Roy, what do you think I do? I naw on listing agents, feed them a few lines of counter intelligence stuff to relay, play some, then tell them to kick in some commission to make the deal and tell why they'll be months trying to get a better deal and explain why, just as I did on my last REO. She threw me the "what's your highest and best, I have two other offers" she got the same number, but a grand over any legit higer offer, but having to show the other offer prior to close, it comes back, oh, you got it at your offer Bill! Like, give me a break! Ya know....
But newer investors aren't going to be pulling the strings. They do need to be represented in some manner.
You certainly don't want to tick off agents either, trying to negotiate when you're stepping on your bottom lip may not impress the agent in front of their client, I suggest you know RE, know what the agent can and can't do and how to sell your deal before you go it alone. But, the day will come, they will know when they get there, IMO.
No, an agent has a fiduciary responsibility only to the seller.
Anything you say to a transactional broker that would benefit the seller, that agent is required to inform the seller, the agent has no duty to inform you of anything the seller may say, or what they may do.
Just to be clear, while this is the case if the agent is only acting as a transactional broker for the buyer, if the agent is acting in a dual agent capacity (legally representing both parties), then the agent has a fiduciary responsibility to both parties. And the agent cannot reveal information to either party from the other party.
That may have been what you were saying, Bill...just wanted to clarify...
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
12y
@Bill Gulley - let's keep the newbies out of the lion's den - I'm OK with that.
But unless the agent they use has some kind of referral arrangement with the listing agent, I've found it's usually a waste of time to put in an offer on any REO. The buyer side of the commission is the juicier side; the seller side usually has some referral fees to be paid to the asset management folks, and can be a smaller cut to start. So the listing agent wants that buyer's side (or at least a part of it if there is a referral fee being paid).
Real Estate Investor · Desoto, TX · Member since 2013 · 560 posts · 528 votes
12y
Somewhat similar to what J Scott mentioned; in Texas a broker may act as a intermediary (dual agent) but cannot be held to the law of agency requirement of "loyalty" and therefore could not reveal information to either party from the other party. The broker could appoint individual agents to represent the respective parties and the agents would look out for their client's best interest. The broker would also need to get written consent from buyer and seller to act as an intermediary.
I made a rental property purchase a few months ago with an intermediary. The broker was my long time agent and property manager and informed me of a rental that one of her clients wanted to sell. She facilitated the transaction but I saw no clear advantage or disadvantage from my experience. She didn't give me any confidential information and I am confident she didn't reveal any based on the transaction outcome.
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
12y
Yes, all true, you're right guys, states vary, we had dual agency, but it didn't last long they changed the laws quickly, transactional agents here, as I stated above. I was thinking the OP was in IL too, is the same as Mo. now I see he's in Cali, so I got no idea what they do. Either way, it could still be getting fed to the lions.
Investor · Fort Lauderdale, FL · Member since 2012 · 1k+ posts · 465 votes
12y
It's nice to have your representation if you are not familiar with the process.
However that's theoretical, in reality, especially in Miami, if you use your own agent on the buyer side you have zero chance. Sometimes an honest buyer agent will even tell you that it may be a waste of time because your offer may not be presented, or may be delayed, didn't get the email, fax machine jammed, or most likely ignored.
Either way, it could still be getting fed to the lions.
100% agree, and I wouldn't ever recommend that a new investor or rookie homebuyer get into a dual agency relationship. The only one who will win is the broker...