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What Would You Do? - A Real Estate Question

What do you do when you find a buyer for a listing that has recently expired?

Agent #1: Since the listing is expired, there is no obligation to the former listing agent. I would approach the owner of the home with my buyer and if he still wanted to sell it, I would list his home and double end the deal.

Agent #2: I would approach the former listing agent, not tell him I had a buyer, find out if he was going to re-list the home and if he wasn't, then I'd go work with his former client myself.

Agent #3: I would call the owner of the recently expired listing, tell him if he would list with me I'm sure I could find a buyer fast (versus his old agent). He would then be more apt to list with me. The seller would be all the more impressed in my ability to come up with a buyer so quickly. My reputation would receive a boost.

Agent #4: I would contact the former listing agent, tell him I had a buyer for his listing and give him the opportunity to approach his former client to re-list the home.

What do you think about these answers? Which approach do you think most agents take? Which one do you think is ethical? Is there another scenario that should have been added to the mix? I look forward to your comments.

Posted by Mother Lode Real Estate Master on 02/12/2007 04:36 PM

Comments (31)

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31 Comments on What Would You Do? - A Real Estate Question

FEB

2007

Hmmm....I'd say that more agents than not would take approach #1. Me personally, since I don't like having both sides of a deal since I think it's inherently a conflict of interest, would take approach #4 if the buyer were truly serious.

None of the above - If I truly had a buyer, I would approach the seller and tell him I have a potential buyer. If my buyer wants it, I would facilitate the deal for a lesser commission (4-5%) than if I were to list it (since I won't have to spend the $$ marketing, I'm willing to do it for less). Less than a double sided but I get paid for my work.

Emmett, thought provoking question. I hope you didn't mean ANY of those answers were right, but were being tongue in cheek.

Answer #5

Tell the truth. Approach the seller like any other unrepresented seller. " I have a buyer who would like to see your house, are you willing to work out compensation for an agent who brings a qualified buyer to your house?"

Would probably do a one time showing agreement, show the house, STILL REPRESENTING MY BUYER, and if it was suitable, everything else is business as usual.

Any of the other approaches are just not right, and would ultimately result in your buyer paying more in fees than he or she needs to pay, or puts you working both sides, or any number of bad things

Are we ready for answer #6? I agree with Wally's #5 but would add, if my buyer doesn't buy the home, I would like to list your home.

I have done answer #4 in the past. I do like Wally's $5 and Rob's #6. I've never done either of those, and would likely stay with #4. I like having another agent in the picture to take care of the other side, whichever side that is. It's cleaner and the lines are drawn more solidly in the sand on who represents who. Of course, depending on who the listing agent was, I may decide to contact the seller on my own. Some agents are far too difficult to work with.......

AnnCummings.com

I don't have to think about this one. For me it is always #4. I've done it many times in my 30 year career. I wouldn't do it any other way.

Guess I like #5 and #6. Would want to be sure my "buyer" hadn't already seen the property with someone else (I ran into this exact scenario). I, too, am leary of double-ending and would probably handle my buyer as I would with a FSBO if the buyer wanted to proceed.

Jeff

Hi there,

Interesting topic and comments.

I'm not so sure there is a right or wrong answer, it depends.

For me personally, without question #4, and I've done it multiple times over the years. My call would be something to the effect that I have a buyer and is his/her seller still willing to sell? I would extend the courtsey to the listing agent first. They've already established a rapport and relationship. Occasionally, yet rarely would I call the sellers directly without talking with the l/a.

In the event the listing agent is not willing to pursue the listing, then I will make the call to the seller myself. I should also say that normally I would NOT prefer to be a dual agent (as allowed in CA, although I know not all states). Some agents are also lenders on their own transactions and I think some may do it well, but I prefer to wear only one "hat" in a transaction.

I too would also go with scenario #4, but it doesn't always turn out how you think . . . I actually had that situation and called the LA, who was either completely green or had no interest in working with the seller anymore. He actually told me to call the seller - he actually gave me his home, work, and cell numbers along with his e-mail address. I called the seller directly and I handled it like a FSBO. I knew my buyers would want me to represent them and this how I felt comfortable. I have done both ends of a deal and I try to avoid it at all costs. Some may call me crazy, but I can't seem to figure out how it works ethically for me personally.

Count me in for #5, but #6 is very interesting, too.

I'm an Exclusive Buyer's Agent. Since I don't take listings and I don't service listings, I would call the former agent and ask if she/he would convey my buyer's interest to the seller. Then if anybody has to shepherd the transaction through to closing, it wouldn't be me. And he could work out whatever relationship with the seller she/he wanted to.

Like Laura, my view is that working both ends of a deal is unethical. Shortly after I became an EBA I did work a transaction with a FSBO and I couldn't be truly objective with the seller. They were being hard-nosed, but they wanted somebody (me) to handle their end of it. I had already been showing my buyers fiduciary duty, and I wasn't going to turn that off just because they wanted to buy from a FSBO. I swore I'd never do that again. I ask the FSBO to find somebody to represent them, explaining the agency relationships and how it would benefit them to have their own agent.

Congrats on the Gold Star and the question you pose definetly is a great conversation item. I might do #5. I to am not sure if there's one correct answer, depends on the agent. Thanks for the post.

Well based on the choices that you have given. #1 and #4 are ethical. 2 and 3 are big no nos. If I had the choice of 1 or 4 I would go with 4 if the listing had not been expired for more than 30 days. If it had been expired for a while I would go with #1 since being in Florida, I am a transaction broker and would not be in a dual agency relationship. I would certainly do it at a reduced fee.

I also have to vote for answer #4. I really don't like selling my own listings. I find it to be a very uncomfortable position to be in.

I'll take door #1, Monty.

I'm not sure I'd call it "unethical" to approach the seller on an expired listing and ultimately do both sides, if that's how it plays out. Everything, and I mean everything, would have to be disclosed so everything's above board, everyone knows who represents whom (or not...), etc.. Therefore, I'll reiterate,"I'll take door #1, Monty".

I don't know about your neck of the woods, but in Marin County and Sonoma Valley there is a clause in the listing agreement on the CAR forms, item 4.A.2. where the original listor designates a certain number of days (anywhere from 30-180) after the expiration or cancellation of any listing to protect themselves against something like this. The original listing agent must, however, provide the seller with the names of potential buyers that have come through the property during their listing. If this particular potential buyer has not already seen the property, which seems like the situation you are describing, but it is recently after the listing has expired, the right thing to do would be to contact the original listor--as you would want them to do for you.

Most of us work very hard and put a lot of time, effort and funds of our own into listings and sometimes the reason it hasn't sold is simply because the right person hasn't come along. If the right person does come along right afterward, I would say that it is due at least in part to the efforts of the original listor.

#4 Of course. Do unto others....

Very good timing on this blog! I showed a listing a couple of weeks ago, which expired on 2/8. My buyer liked the property, but not enough to write an offer and I gave the listing broker that feedback. On 2/9 the former listing broker left me a voice mail which said the seller would reduce his price by 10,000 if we submitted an offer by today. I did not return that call. Over the weekend, a mutual friend gave me a new lead - you guessed it, that exact seller. Apparently they sellers were not happy with their former agent. Today I called the seller and expressed my interest in listing the property. I am third in line already and probably on the outside looking in at an appointment.

I only work with buyers and the reason is to avoid conflicts of interest or the appearance of a conflict of interest. I would simply contact the seller and explain I have a buyer, give the proper disclosures and help my buyer client buy the house. I think some of the other senarios may be "ethical" under NAR's rules, however, I think it most professional and prudent to avoid conflicts of interest.

I would go with answer #4. I think what goes around comes around and i definately would appreicate the same opportunity if the shoe was on the other foot.

I would go with #4, but I liked #5 and #6 too.

I also use approach #4, because it is how I would like to be treated.

Although it must be said that it is perfectly acceptable practice for an agent to utilize #1 & 2. Now I don't want to get shot for saying that, but it is true and you know it is.

Once the contract is expired the relationship is over.

How many of you work expired's for the listings? #1 isn't much different than that, except you already have a buyer in this scenario.

#2 at least extends some courtesy to the former listing agent, but again, the listing is expired and this is a contract based business.

#3 is unacceptable, sneaky and deceptive.

OK I am done. I use #4 because it feels best to me and is how I would like to be treated after spending a small fortune marketing and advertising the listing.

Definitely #4 is the right way to go. I would expect the same respect if the listing had been mine. I would always check with the previous listing agent and proceed from there.

I agree with Teri's response.

FEB

2007

I'd take #1, as long as they weren't planning on relisting, but I'd tell them I'd do both sides for 1% less then they would have done it for before, presumably 5% instead of 6%. And I bet if I approached them with a contract and a loan commitment letter, they'd jump at my offer.

Definately Number 4, I want GOOD relationships with other realtors.

Ok so it is a win-win for all 4 of us !!

I have to say that I'm amazed at the number of "4" responses there have been on AR. Shows why I enjoy this environment so much!

Do I honestly believe that this would be the case in Delaware Ohio for most agents? No. They are going to double-dip and smile all the way home.

For me, it would be No.4 or No.5 depending on the definition of "recently" and whether I've solicited the expired listing.

Agents Beware: I once had a friend who had seen a house that had been for sale the year before. My friend never went inside the house. She had seen the sign and found out the house was over 200,000, so didn't go inside or make any further inquires. The house stuck in her mind though, and a year after the sign had come down, she and I knocked on the door and asked the "little old lady" if she still wanted to sell her house? The lady let us inside and my friend LOVED the house. The lady wanted to sell the house to my friend. I asked her about the original listing on her house, which I had assumed had expired over a year ago. The lady found her old listing agreement and I could not believe what I read! The listing had a protection clause in it for 1 year and 6 months! WOW Smart Listing AGENT!! The lady had no idea, what she had signed? She thought the listing was over when she took it off the market. ALWAYS CHECK EVERYTHING!! You just never know!

Oh, and my answer would be NUMBER #4 - to stay ethical and stay out of trouble!

Good Post! I would stick with number 4, it's fair and would be be the most ethical route. Especially with our recent market, I watched many agents lose their listings in the end of Dec.06 just to see the seller put it back on in Jan 07 with a new agent at a much lower price and then boom the house goes under contract!

Interest question to ask! ~ My answer is # 4 Always do the 'right thing, or it'll come back to haunt you if you don't"

Patricia Aulson/REALTOR/SEACOAST NH,ME & MA

URL: www.patricia4realestate.com

FEB

2007

I am very impressed with total amount of replies and the different opinions. I would have to go with idea #1 myself

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