Why you want to work with the listing agent.
Why don’t I just call the listing agent to make an offer on the house? You can call the listing agent and talk to them, but this is not the best move for you. That agent has a fiduciary responsibility to their client that they listed the house for. What this means is that they are required by law to look at for the best financial interest of their client. If they sign a contact with you then they become a “Limited Agent” (in Utah it maybe named different in other states) in the transaction. Then they become hindered in giving the best financial advice to both clients. That agent may know the exact amount that the seller is will to sell the home for, but they can’t tell you without breaching the fiduciary relationship with the seller. Then they can’t fulfill the best financial advice for you as the buyer as well. It does happen that an agent can represent both sides of the transaction, but they have to make this aware to both the seller, and the buyer to make the agreement fair for all parties.
@Jacob Cogswell Did you put the correct title for your post? I recently blogged about the very same topic: https://www.biggerpockets.com/blogs/8070/51438-the...
This is what I wrote:
"Hunting for your next deal or residence? If you are getting a deal from the MLS (and yes, there are still some on there), you need to be aware of something important if you are using the listing agent while you are the Buyer: The listing agent's hands are tied during the purchase negotiations. They are NOT negotiating for you.
"The thing about listing agents is that their hands are legally tied when they represent both the seller AND the buyer. It's easy to see that you can't on negotiate on behalf of your client - against your other client. In real estate they call this "limited agency." Agents "representing" both sides should have you sign something recognizing that their ability to negotiate on your behalf is curtailed.
"Some listing agents bring in another agent to help any buyers so they don't have this conflict of interest. Better yet, bring in your own buyer's agent."
Hopefully between the two of us the investors will get the message!
@Jacob Cogswell I am with you 100 %!!
