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Ethics of a listing/buyers agent switch

We contacted a Listing Agent directly via contact-form on the listing (it had the Listing Agent's name and picture on it).  In our request we stated that "We see that you are the Listing Agent on this property".  Our goal was to work directly with the the seller and seller's agent and have our attorney complete the transaction. 
A Second Agent from the same brokerage then contacted us.  We thanked the Second Agent, but indicated that we did not intend to use a Buyer's Agent for the impending transaction, and that it was our wish to use our attorney to complete the transaction.
We agreed to visit the property under the aforementioned stipulations.
When we contacted the Second Agent following the showing (to write an offer), we indicated that we wanted to work directly with the Seller. We arranged a meeting at the Second Agent's office.  When we arrived at the office, the Second Agent acknowledged our desire to not obtain a buyer's agent – but, stated that "at this point in time, we are required to sign a buyer-agency contract in order to submit an offer on the property".
1.If we wrote directly to the Listing Agent to request a showing of a property (we located on our own) – but were presented with a different agent (same brokerage) who never indicated he/she wasn't representing the Seller nor affiliated with the Listing Agent – was it a necessity for us to enter a Buyer's-Agency Contract with the Second Agent?
2. When we told the Second Agent that our intention was to work with the Listing Agent and our attorney, was it his/her duty to tell us that he/she was not affiliated with the Listing Agent and decline to show the house?
3.At any point, should the Second Agent have referred us directly to the Listing Agent?
4.fter viewing the house, did the Second Agent have procuring cause had we refused to sign the Buyer's Agency contract?
  • September 20 2013 - US
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Answers (6)

Many listing agents will not write a buyers contract which makes them a dual agent.  If you have a dual agent you have no expectation of aggressive representation.

The second agent in the office might have been a "designated" buyers agent.  It is legal in some states (PA is one) to designate another agent within the brokerage to represent buyers on in house sales.

You can never negotiate directly with the seller. You won't get a better deal because you are working with the listing agent. "If" you were to get a better deal on the price of the house then the listing agent would be in violation of ethics and open to a lawsuit by the seller.

In PA the agent writing the contract must disclose on the contract whether they are a dual agent, designated or buyers agent.  To present a contract a buyers agent must have a buyers agency with the buyer.
  • September 21 2013
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The Seller can also refuse to let the listing agent act as a dual agent in a state where it may be allowed if the Seller didn't care. It sounds like you fell for the myth that you could get a better price if you were unrepresented. What's the attorney going to cost? The Buyer's Agent is kind of like free, or as close to free as anything ever gets. This will rankle the haters, but it is a fact.
  • September 20 2013
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Your problem first: you should have skipped the part where you write an offer with either agent, and gone straight to your attorney. Regardless of however you made contact, the "sales office" is under no obligation to force the listing agent upon you, and you have every right to go and get your attorney.

Ethics answer: It is not an ethics violation to refer callers to a "buyer's agent."

Basically, a real estate brokerage has a contract with a seller, and with some buyers maybe, but certainly not with you. They get a lead on their listing, they have every right to try to keep that prospect buying "in-house," but that's not really your problem. You just have to know that you don't have to have them write up your offer.

All the best,
  • September 20 2013
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Profile picture for hpvanc
You may want to indicate what state you are trying to buy in as laws differ. I question whether agents in any state can legally require you to sign a contract with a "buyer's" agent, however I know there are at least a couple of states in the SE where agents have interpreted the law as saying they can require it. I would look up the laws in the state, and find out what provisions and disclosure are required to be a non-represented buyer, and possibly contact the DOJ Antitrust Division if the brokers/agents in question will not allow you to proceed as an unrepresented buyer.

You have already arranged to work with an attorney to protect your interests in the transaction. I don't see a need for signing an agreement with a Selling Agent to act as a Salesperson and sell you a house while misrepresenting that as Buyer's Agency. A salesperson calling themselves a buyer's representative isn't puffery, it is outright fraud even if it is sanctioned by the real estate authorities in many states.
  • September 20 2013
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Agency in MD is pretty complicated however it is my understanding that on your first meeting with any agent they are supposed do disclose to you who they work for and show you an understanding whom real estate agents represent document. 

1. Why do you not want a buyers agent? It cost you nothing, they represent you and your best interests and you have the lawyer anyway in addition to that.  Either the listing agent gets the full commission or they split it with the buyers agent. You cant get a discount for working directly with the listing agent. I believe any change in commission after listing in MLS breaches several codes of ethics and maybe even laws.  Who gets paid what should  not be your concern, unless it affects you, and it does not. You don't ask your doctor what his annually salary is you just pay your co-pay and see him.

2. The second agent can work as a sub-agent of the listing agent and disclose they are working for the seller. This is rarely if ever done anymore since we adopted buyer agency. 
 
3. Do you hate your buyers agent so much that you don't want them to get paid for showing you the house and helping you write the offer? When they showed you the home they were considered a presumed buyers agent, a sub agent or a co-operating agent if they are from the same brokerage. They should have disclosed  this. This is the law to protect you from having to deal with the selling agent and not have your own representation. Put in place after so many years of there being noone to represent the buyer. if they are from the same agency, they cant be a buyers agent they are a co-operating agent. The BROKER is the "agent".

4. Procuring cause is an issue for the courts to sort out.

at least that is how I understand it - ask 10 agents they will tell you something different  :-)
  • September 20 2013
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When a buyer works with the listing agent and the listing agent represents both buyer and seller, it is called "dual agency" and that is illegal in some states. In states where it is legal, many agents do not want to be a dual agent because you cannot equally represent the best interests of both the buyer and seller (typically, the buyer wants to purchase for the least amount of money and the seller wants the most. Also, when it comes to other negotiating items, the agent can't take both sides) I'm not sure if it is legal or not in your state, but that may be the reason for a designated agent in your case. I'd call the broker at this point and explain your situation and concerns. The broker may be able to straighten out any problems with the agents and you and get you on the right track.

  • September 20 2013
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