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Is it OK for your Agent to work with COMPETING BUYERS?

It is often that a buyer will search listings on their own. When they find something they want to see they ask their Agent to meet them there and open the property. After watching the market for 6 months, I found some waterfront property back home. I emailed the listing flier to my Agent and asked if she could meet me there first thing in the morning.

Now, for me to go "back home" is an all day event at least. It is a minimum 2 hour drive. I rescheduled my calendar for the day and went to view the property. I loved it! It was sub-dividable where I could build 2 homes on no bank waterfront in a quiet neighborhood......absolutely beautiful. As an experienced investor, I knew what I wanted and told my Agent how to write up the offer.

As we were leaving the property an old time friend and mentor of mine was pulling in. I thought it was a surprise, and thankful we hadn't missed him. He turned around and never answered the phone when I rang. I asked my Agent if she knew why he was there, and she said yes. She had sent him my listing because she knew he was also looking for waterfront in the area. I couldn't believe my long-time-Agent had put me in a position to compete against my old friend and mentor.

Needless to say, I pulled my other property off the market she had listed for sale. My entire day was lost. I never put an offer in on the piece I wanted. And I never worked with that Agent again. I lost a trusted business partner and friend.

Other Agents have told me they refuse to work with buyers looking for the same thing. I really think this situation could have been avoided had the Agent not shared the property unless she knew I didn't want it.

What do you think? Should an Agent maintain representation to their client that prevents competing circumstances?

Posted by Melissa Olson ~ HOPE Lending LLC on 07/24/2007 07:14 PM

Comments (34)

melissa olson, hope lending, mortgage planning, investing

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Post is included in group: What NOT to do in REAL ESTATE - BAD BUSINESS

34 Comments on Is it OK for your Agent to work with COMPETING BUYERS?

JUL

2007

Did your agent know her other buyer was your long time friend?

I don't see anything wrong with showing the same property to two different buyers. I understand you are upset because you found the listing and you were put up against your best friend. Put yourself in the other buyer's shoes. Would you have been upset if you had found out your agent didn't show you a certain property because another buyer was interested in it as well?

Melissa:

Very interesting situation. When I work with buyers it is usually me who sends them the listings. I see them before my buyers. And I do have buyers looking for the same type of housing in the same areas, so there are occasions when I send multiple buyers the same listing.

However, I have never had a buyer send me a flyer and then forwarded the flyer on to another client. I would not do it.

Sandra

Andrea - Yes, my Agent knew the other buyer was my long time friend that I call "Pop". Turned out we both wanted the property and would have gone into a bidding war against each other using a "meet or beat" clause up to $100,000 above the listing price. So NO, I would not be upset if my Agent failed to forward a listing to me they thought I was interested in if they were already serving another buyer.

More importantly, I want to know my Agent is working for me. That they have my best interest. And at best, that they know how to do the right thing without hesitation.

Do you see anything wrong with this now?

Sandra - I can understand if you have search perameters in common for your clients that sends multiple listings out to your clients, with some being common. But with the Agent in this situation not doing the work, I felt like I finally found my next property for my portfolio only to have it taken from me. Like I commented to Andrea, this would have put us in a meet or beat clause up to $100k over the listing price. Hopefully the Agent wouldn't have allowed it to go that far, but who knows. Are they required to present all offers? Was she motivated by her commission alone?

With the agent knowing the other buyer was your friend - that's a different picture then. Other than that, i have no problem showing the same property to two different buyers. If that's what they're looking for, I'd do them justice if I keep it a secret from them. I would however say something like "Yes, this property is very desirable, I've shown it to buyers before."

Melissa.... I don't care if your agent knew that you were both friends or not. That shouldn't be the point. What I would be irked about is that this agent told someone else about something that you found.

If they had found the property for you? Then isn't it part of their job if they have other clients looking for the same property. Just my .02.

jeff belonger

TRUST is a necessity.

i think the agent could have worked with both of you. all they had to do was wait until you saw the property. asked if you had an interest and did you desire to make an offer, and if not was it okay with you that they show the property to another potential buyer with similar interests.

I would never dream of asking my buyers if it is okay to show a property to other buyers as well. Eventually I would end up telling buyers "Sorry, I ran out of properties to show because I only show each property once and the one you're requesting has already been shown to another buyer I'm working with."

That is given the fact that I do not know buyers are friends. Even if, all it takes to let them know IF I'm aware of it. If not, oh well.

Jeff - good point. Yes, I found it and had a heavy expressed interest in it enough to reschedule an entire day to come look at it. I had just told her my terms for the offer. If she had found properties through her work to serve her clients it is fair game. Thank you for your .02. :)

Jay - Trust is everything and the root of the problem here. She knew my interest and should have waited before offering it to another client. She put us in competition with each other.

Andrea - I think the key is to not show the property to another client if you're already working with one who's interested in it.

Thank you all for commenting. This is really helping me to identify what the true problem is so I can go talk to the Agent about it. The Agent is also a long-time friend. It has been dificult for me to separate my personal feelings from the professional aspect to give me a clear choice of words to use. I hope to repair this friendship because I care enough about her that it is important to communicate what she did wrong to make me not want to do business with her.

It really helps getting the perspective from other professionals.

THANK YOU.

JUL

2007

Sounds like a conflict of interest....BUT who ever gets to the property and makes an acceptable offer that is accepted by the seller should win the property....

I am not too sure I would be comfortable with two of my byers competing against each other for athe same property.,...I would rerfer one of them and go it alone with the other one.....

Of course what you are saying is that YOU found the property...but SHE told another buyer about it..... If I were her, I only would have told the other buyer if YOU did not put in an offer that was accepted by the seller...I would have given You first dibbs...because YOU found it......

Alexander - thanks for sharing your take on this.

I would show it to others after you viewed it and decided it's not for you. Since you brought it to my attention it would only seem the right thing to do.

Armando - thank you for respecting my time and effort in finding the property. I agree, if I didn't want it I wouldn't have had a problem with this.

I wonder, if the role was reversed.......If an agent found a property for me and I went to look at it, how would they feel if I bought it using another agent?

Melissa, I would not be comfortable representing 2 friends over the same property. That is not to say that I would not have 2 buyers vieing for the same property. I would disclose to them both that there are other interested parties and I will be showing the listing to other clients....

Diane

Diane - Thanks for commenting. I could understand an Agent might not be aware of a client's personal relationship so I don't think that would prevent the problem. Our comments have helped me see that the problem was with her sharing the property that I found and expressed an interest in. She created a competitive environment for me, thereby not my best representation.

JUL

2007

I'm weighing in fairly late in the game but I agree with those who indicated that if they have multiple buyers looking in the same price range etc. that if they learnedabout a new listing they would send it to both of them. However, if one of my buyers found a property independently I would definitely not show it to any other buyers until the first buyer had seen it and eliminated it from their list. Now, with the auto MLS updates most of my buyers find out about new listings simultaneously. Again, I would then treat them equally until it became clear they both wanted to write an offer. Then, I would ask my broker or another agent to step in and represent one of my clients. In my old office our Broker/manager always stepped in to help is these situations and the clients usually felt well represented.

JUL

2007

Diane - I agree with how you're following it. Thanks for sharing your comments.

AUG

2007

As an agent and a Realtor, we have a duty to show all the available listings whether in the MLS or not to our clients. It would be illeagal and unethical if a Realtor would act any other way.

Christian - I seriously doubt it is "illegal" for my agent to take a listing I provided her with, was shown the property, and told her to put an offer in on it......for her to stop showing it to other clients. I think it is unethical for her to put me in a competitive environment after I gave her my terms for the offer. Some agents have even left a remark that they would refer to another agent in their office in this situation. How can you represent both?

Did you even read the entire post here? If you were my agent, I wouldn't do business with you knowing that's how you operate. I wouldn't even refer business to you. BTW, spell check is the "ABC" with the blue checkmark in the Comment box.

SEP

2007

I think that I agree with Diane Aurit on this one. If you brought the listing to me I would show it to you and ask if you want to make an offer on it before showing it to someone else. I would also tell you that I have other buyers that are looking for listings like this, and that if you don't want to commit to making that offer right now, I am obliged by my relationship to those other buyers to show it to them also. Would that feel fair?

Do try to make up with these people, I bet they both feel bad about how this happened. I don't know that I would be able to do business with them, that would depend on responses, but don't slam the door on them either, they probably see things a bit different from their point of view.

Melissa, I too would be perturbed about your agent sending another buyer info that you had found. Clearly it seems to me that they did not have your best interest at hand.

SEP

2007

Wow, Hugh....you're assumptions are about as intelligent as hers. I don't spend my money with her any longer, which my new partner is grateful for. Good luck to you. I found your "ass-u-me" so fine I gave you the same. "delete"

Rob - thank you for understanding. As an investor spending time finding my buys, the last thing I want to see is my agent hand my homework over to another buyer. Great things learned and life goes on. All the best to you.

Michael - yes, thank you for thinking to save me the opportunity to make my offer clean and without competition.

Nothing wrong with working with buyers looking for same thing - but NEVER in this situation. She knew you were looking for a specific property for some time. SHE should have seen the listing first anyway. But to think she sent another buyer that info BEFORE you saw it and had a chance to saw NO.

That's slimy. I too would have fired her so fast her head would have spun!

Sorry you felt that way I was just trying to get you to see the other side of the coin.

God Bless You

SEP

2007

I would ask how much interest the first client who viewed it to see if a contract is on the horizon. If he/she says that he/she is still in the "thinking" mode, I would tell him/her that I have another buyer who may fit their needs.

SEP

2007

James - I appreciate your understanding. Thank you for commenting.

Hugh - Business often has two sides to the coin: doing it the right way, or doing it the wrong way. I'm not confused of either in this circumstance. I work with people I can trust not to loose my money, and have ethical standards. Thanks for considering.

Loreena - I was thinking about it and hadn't seen it yet. I sent the listing to her, drove 2 hours the following morning and said I wanted to make an offer. This was all before seeing the other client come down the driveway. Thanks for commenting.

SEP

2007

I have come across so many properties that were "objects of interest" to several people - and I have also had several people seem "hot" for a particular property.

Then.

Pfzzzt. For whatever reason they lose interest. And very few have the common courtesy to say so.

I suppose if someone sent me a property asking me to show it to them, I'd wait until they said they weren't interested in it after all before sending it to someone else...but expecting agents to always wait until the buyer says "no thanks" is kind of unreasonable.

I don't see why you didn't make the bid on the property anyway - how do you know that the other guy REALLY wanted it? Maybe he got there and decided it wasn't what he wanted. Or maybe he wouldn't have bid as much as you. Don't blame the agent because you lost heart and didn't pursue it yourself.

SEP

2007

Sending two people concurrently to the same piece of property is absolutely absurd. Sure, you want your seller to have the benefit of showings, but COME ON. Surely, there was a way (and the time) to accomodate each person without putting them in a situation that was uncomfortable, to say the least. I'd have dumped this agent as well- the only person that benefitted from two potential prospects showing up in such a tight time frame was the agent. It's certainly a bad plan for the seller- people can't objectively and peacefully look with another person there on their heels. I'm glad that she lost your business- she deserved to. The moment that you sent a property of interest and she forwarded the opportunity, it was clear that fiduciary to you was history- fiduciary to her bank account was primary. Just my opinion.

SEP

2007

Laurie - thanks for sharing. I appreciate that you are able to recognize what I believe to be obviously poor business.

OCT

2007

Yes I believe what she did in your circumstance was not right and definitely was not to benefit you. Each situation should be evaluated by the Realtor and handled ethically.

But in general and our Alaska Real Estate Consumer Pamphlet specifically states " Your Real Estate Licensee may also work with a variety of other clients (they represent) and customers (they provide specific assistance to) in different working relationships. In those situations, representing or providing specific assistance to other sellers, buyers, lessors, and lessees does not create a conflict of interest while working with you, or within the duties mentioned above."

As a matter of respect to my client, I would make sure you did not want to write an offer on the home before passing the information on to another buyer. Especially when you had brought the property to my attention in the first place.

However, it is to be expected that many of your buyers may be looking at the same homes at any one time and buyers should be informed of this fact when you begin a working relationship.

OCT

2007

I have often been in a position of having more than one client interested in purchasing a particular investment property. In that situation, I have disclosed to both clients (and one time, three clients!) the other party's offer. I've told each client that I would not disclose any other information to the others and would treat each offer objectively when negotiating with the listing agent. It is not an easy position to be in, but it can be handled if you're up front with everyone.

Technically, your agent was in her rights to notify her other clients about the property, no matter how she found out about it. However, she should have told you that she had other clients looking for that type of property. Since you brought it to her attention, I think it would have been courteous to agree that only after you decided you weren't interested would she show it to others.

Other agents would have been telling their clients about the property, too, so the competition probably wasn't just between you and your friend. But it was certainly twisting the knife if she knew that the other client was a good friend of yours! At least you found out--what if she hadn't scheduled your friend's showing while you were still there?

Good luck!

Robin

OCT

2007

Sara - I appreciate your understanding and comments, thank you.

Robin - Nicely said, thank you.

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