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Is it better to negotiate on a home with the listing agent, who is also your agent?

Should I go into look at a house with a different agent, or let the listing agent represent both parties. Could I get a better deal if I work with the listing agent of the house without any other realtors involved?
  • July 06 2013 - Las Vegas
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Answers (20)

I highly advocate utilizing Realtor with a skill set of working with BUYERS.  It would be advantageous to have your own agent, your own representation.   The agent you choose should be well versed with the entire transaction process.
  • December 20 2013
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I recommend using your own agent to represent your best interests. The seller pays the commissions either way and having your own agent will help separate you from any conflicts of interest. In a perfect world an agent should be able to facilitate the deal and represent both side by fulfilling his/her fiduciary duty to both clients. However, this is not always the case. Agents are humans and they sometimes make mistakes. You don't want the mistake to cost you money. I recommend using your own agent so you take this risk out of the equation. I hope this is helpful to all who read it.
  • October 21 2013
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Profile picture for aracz
Hi,

It is best to have your own representation, so you can strategically make decisions with your point of view being presented in an independent way.

All  the best,

Arpad
  • October 15 2013
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Well, SS, as it turns out, those aren't the requirements for representing a buyer as their agent on a real estate transaction. Maybe there's something else to try?
  • October 15 2013
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Profile picture for SteadyState
Amy Smits says: "Ultimately a buyer's agent is the only person truly able to work for you.".
Amy if what you say is true please answer the following:
1. Provide the legal definition for a buyer's agent that is acceptable for contract law in CO. (Bet you can't).
2. On the purchase agreement in CO please indicate if the term "buyer's agent" is used?
As I said (I guess use of "buyers agent" is now a pet peeve of mine).
There is no accepted legal definition for a "buyers agent". The seller hires a listing agent and the listing agent contracts with a selling agent to sell the home to the buyer. Thus there are only two types of agents listing agents and selling agents. Buyers Agent is a marketing term used to make consumers feel comfortable when there is conflict of interest (see below).  I challenge a Realtor (R) to provide a legal definition recognized by US contract law for "buyers agent" (see the NAEBA quote below in my previous post).
  • October 15 2013
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Profile picture for Amy Smits
The best way to look at this is would you want your attorney also representing your wife in your divorce? The listing agent works for the seller and you want someone working for you. Whether you choose (in Colorado) a transaction broker or a buyer's agent is up to you, but you should know the difference. I am going to use another analogy here because I think it is easier to understand. A transaction broker is like a referee. They make sure everyone plays by the rules and that the "deal" gets done. A buyer's agent is more like a coach. They can provide advice on the price, condition and provide comparable sales information. Ultimately a buyer's agent is the only person truly able to work for you.
  • October 15 2013
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Profile picture for SteadyState
Please note that there is no accepted legal definition for a "buyers agent". The seller hires a listing agent and the listing agent contracts with a selling agent to sell the home to the buyer. Thus there are only two types of agents listing agents and selling agents. Buyers Agent is a marketing term used to make consumers feel comfortable when there is conflict of interest (see below).  I challenge a Realtor (R) to provide a legal definition recognized by US contract law for "buyers agent:.
A quote from the NAEBA website:
"However in recent years brokerages have made an intentional shift in their business models so an individual salesperson can act for a buyer. This allows the brokerages to continue to take advantage of the lucrative dual agency business, while making consumers more comfortable with the conflict of interest. This has required changes to license law and different states have different terms for these "almost buyer agents."  They may be called designated buyer agents, delegated buyer agents or something else in your state."

In your case approach the listing agent and inform them that since you have no buyers agent you expect a 1.5% discount on the purchase price from them at closing.
  • October 15 2013
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I always recommend having a buyer agent represent you.  That way you have someone looking out for your best interest. 
  • October 15 2013
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This has a lot to do with the people involved. Apart from that....
Listing agent splits the commission credited by the seller with the buyer's agent. A listing agent could shave off maybe a percent or so if they represented both sides and still make more, though they do have double the liability and work. The listing agent has incentive to "double end" a transaction for this reason. There are buyers that think that they have a better chance of getting the best price on a house because of this extra percent or two and increased agent motivation if they use the listing agent.

In some states, it is illegal for one agent to handle both sides of a transaction because of conflict of interest. Some agents aren't comfortable with handling both sides, even if they are allowed to do it because they fear the liability.

Personally, I've "double ended" listings several times. There is a fine line I must walk in order not to divulge the secrets of either side. On the other hand, seeing both sides make it easier to create a win win for both, and is more efficient because there is less uncertainty about getting responses, paperwork, etc. through another agent throughout the transaction. As far as negotiating, I used a CMA to help the seller arrive at an asking price and I use a CMA to help the buyer decide on an offer price. It is understood by both sides that I can not give "insider information". If there is something unusually complicated about the sale, I may decide to ask that a different agent represent the buyer.

If you use a buyers agent, they are free to be more aggressive on your behalf and use any information they can get to your advantage. An agent's "fiduciary duty" (legal obligation) is greatest to their client. These are the facts forming the basis for the argument for having your own buyer's agent.

As you can see, there are pros and cons for either decision. Hopefully this information helps you in making it.
  • October 15 2013
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Dual agency deals happen all of the time, especially if a buyer seeks out the property without an agent representing them.  Keep in mind that the listing agent's fiduciary duty is to the seller and cannot disclose whether or not the seller is willing to negotiate a price break to the buyer.  Agents representing the buyer's side is working only for the buyer which is important especially for a first time buyer because they may be able to provide you with advice. guidance and some insight that the listing agent may not be able to divulge.  Personally, if one of my buyers best or only chance to get the home they REALLY must have relies on them signing with the listing agent, I give them my blessing and hope it works out.. after all, we're trying to help people/families get into homes aren't we?
  • October 15 2013
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There are a lot of great answers here, and I agree with them.
It depends, but mostly you want an agent that is not representing the seller. 

A listing agent is biased and sometimes, not always, have bias in their decision making toward you and your interests.

If an agent is selling mostly their own listings, and not many others, that should be a red flag.

Your current agent should understand that you want to work with someone else, and you may be able to work with someone in their office that you like just as much.
  • October 15 2013
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That is called dual agency and think of it this way – If you were in a court of law, would you hire the prosecutor to also be your defense? It can be done successfully but should be (my opinion) reserved for unique sitations. 
  • October 14 2013
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If you work with the listing agent, he could possibly get you a better deal depending on the commission structure because he is representing both sides
  • July 08 2013
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Profile picture for VickiMorris
You should definitely have your own agent negotiating on your behalf.  Realtors represent their clients.  If you and the Seller have the same agent, then who is the client?
  • July 08 2013
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Hello, great question. There are no definite Yes or No answers to your questions, as each transaction and agent vary. If it's a property you truly want, and you don't already have a buyers agent working for you, and it means that you'll get your offer accepted, than yes, it's worth it. A lot depends on you. Are you a truly confident buyer? Do you understand the real estate process (comparable analysis, contracts, due diligence, inspections, disclosures, etc)? Are you comfortable with the agent? If you answered No or Maybe to any of the above questions than you should seek your own representing agent. From the start I recommend having an agent who represents you as a buyer (aka Buyer's Agent or Selling Agent). This agent should be showing you everything on the market, not just their listings. If they happen to have a listing that matches your criteria, great! Also, many listing agents have a buyers agent on their team so they never have dual agency. Again, situations may vary, and both are legal.
  • July 07 2013
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Profile picture for Jason Muse
I'm sure you'll get plenty of responses, but I would suggest getting your own agent.  

I've worked both sides before (only a handful over 8 yrs) , but what Michael said earlier is correct.  Working both sides requires written permission from both sides.  In a dual agency, the agent is essentially a paper pusher without any advice given to either side.  If you are a savvy buyer and feel comfortable without any advice on pricing, then go ahead.  Most buyers will will want some representation and advice.

You can't always assume that the commissions will be less as the Listing Agreement has already been signed & fees agreed upon.  

Good Luck
  • July 06 2013
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Do yourself a favor and get your own agent. It costs you nothing as the seller pays the commission. The seller's agent is looking out for the seller. You need an agent looking out for you.

I've been a licensed agent for 10 years and although I've been a dual agent, I always offer and usually recommend the other party have their own agent.
  • July 06 2013
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Let me give you some honest answers to your questions and not the standard canned ones. It's my style.

You are talking about a dual agency situation and you have to disclose to both parties you are doing this. It's not a big deal, it happens a lot. The agent must treat each party equally which means that anything you tell the agent they are not going to keep it a secret, so don't say, "I am offering $200k but I will go up to $220k" because the agent would have to tell the seller that. So you won't get an agent that is sneaky and aggressive, you will get an agent that does what they can to make the deal work and make both parties happy. It happens every day.

Since the agents company gets all the commission, the agent splits it with their company so the agent DOES NOT get all the commission, you can ask the agent to discount the commission they are asking from the seller and this can help sweeten the offer you make to the seller to buy the house. This is a fact and happens everyday too.

tim
  • July 06 2013
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Profile picture for Rada Ann Labe
I heard many years ago that most law suits were from an agent representing both sides.  Whether that is true today or not, I don't know.  But I don't represent both sides - I'll refer you to another agent in my office instead.  Generally, the better deal that you are looking for -- well, u can usually get that by working with your own agent and negotiating.  What are you talking about, a few thousand dollars???  Remember the agent representing the seller is the one who gave her opinion on the sales price, etc. 
  • July 06 2013
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First of all, both buyer and seller would have to agree to this arrangement. It's called dual agency.

And 2nd, if the agent is representing both parties, they can't assist you with negotiating price and terms of the purchase agreement as that would favor one client over the other.

3d, if the agent represents both parties, they keep the whole commission. So there's no savings of commission if both parties work with the same agent.

Personally, I would find yourself your own agent. As for me, I won't do dual agency transactions.
  • July 06 2013
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