Two Buyers, One House... One Agent?

Real Estate Agent with Homebuyer Representation, Inc. DRE# 5467433

Finding a Buyer's Agent - Proceed with CautionLet's talk about agency, representation, and conflicts of interest.

We received a call today from a gentleman who had just fired an agent he had been working with for a few months. We'll call him Bob.

Bob and his agent were out together looking at a HUD home when a man "off the street" came to the door and asked to see the home. Bob's agent let the prospect in to tour the home and spent time with the man, giving him her card as he left. Later, when Bob expressed a desire to write an offer on the home, his agent informed him that she would... and that she would also be writing an offer for "man-off-the-street".

Bob was confused and upset when the person he thought was HIS agent, seemed perfectly fine with helping someone else who was competing against him for the same property. He tried to ask her how she could continue to fully help him obtain the property, if she was also helping someone else who would be bidding against him. Her response was that "HUD encourages us to bring as many buyers as possible."

Bob was bothered by the agent's actions and response, fired her in writing, and began searching the internet to find answers to his questions, such as:

  • Didn't I hire an agent to represent me?
  • Why did that same agent offer to help someone else compete against me?
  • How can I find an agent who will remain true to me throughout the process?
  • Is what the agent did legal?
  • Was it ethical? 
  • Did I do the right thing by firing the agent?
  • How can I avoid this situation in the future?

We are firm believers in agency and representation. We have learned to turned away those "people off the street" who come knock on the door while we're showing a home to a client. What if our client likes the home and wants to make an offer? We believe that even showing the home to someone else who may be our client's competition would be a direct violation of the agency representation owed to the client.

How does a client feel when "their" agent spends more time courting another buyer-client, than being engaged with them in evaluating the house they are in? I have heard this story told more than once. The buyer does not feel respected. They feel ignored, less important than your bottom line, and sometimes even feel like you are being disloyal.

So what if two of our buyer-clients do happen to be interested in the same house?

While we seek to eliminate the possibility of as many conflicts of interests as possible, (one of the main benefits of working with an Exclusive Buyer Brokerage is we do not list homes or represent sellers, completely eliminating a big and very common conflict of interest in many real estate transactions), conflicts such as this could arise. Two buyer-clients of the same agent wanting the same house is pretty rare, but we do know it has happened before, so we have a policy to address it, should it arise.

Our office policy is that whenever we become aware of a conflict of interest, we make all parties aware. We try and make parties aware of even the potential of a conflict of interest. Buyer-clients are not forced to work with us if they have any reason to believe we may not be able to remain loyal to them.

It is also our policy that once a client directs us to write an offer on a property, unless and until that client moves onto another property, we can no longer offer any other client the exclusive representation we have promised (for that exact property). A true conflict of interest will have arisen. We wish we could continue to offer exclusive representation to both parties, but unfortunately, we cannot. So we have implemented a first-come first-served policy. When we think two clients might potentially end up wanting to take action on the same property, they are briefed on the policy so they know that the first to direct us to write an offer will have secured representation on that property until they are done with it. The second client can choose either to not pursue the house until client 1 fails, or they can choose to be released from our agreement without penalty (i.e. any up-front retainer will be returned) so they can seek representation elsewhere. 

While this policy is not perfect, it is more fair to consumers than no policy at all, or a policy that results in neither party receiving the representation they believe they have contracted for.

Feel free to suggest other potential policy solutions for the scenarios discussed above! We are always seeking to improve our business to give buyer-clients the best experience possible.

Buyers, answer the following questions:

  • Do you have excellent credit?
  • Do you plan to purchase a $300,000-$800,000 home within 90 days?
  • Do you have a good down payment, or are you paying cash for your next home?
  • Do you want an agent who takes the agency relationship seriously and will act in your best interest throughout your transaction?

Homebuyer Representation, Inc. - Exclusive Buyer Agents

Don't work with just any agent. Get YOUR OWN agent!

Call us at (801) 969-8989 or contact us today via the link on this page for a free consultation.

©2012 Homebuyer Representation, Inc. - "The Real Estate Agents on the Buyer's Side" TM

Salt Lake City, UT - Exclusive Buyer Agents (EBA)

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Rob D. Shepherd
Windermere/lane county - Florence, OR
Principal Broker GRI, SRES

What the agent did might have been legal but it still wasn't right. The gall to show the home on her original clients time, takes the cake.

Oct 09, 2012 10:22 AM #1
Larry Riggs
Century 21 Redwood - Frederick, MD
GRI, SRS Your Frederick County Specialist

I'm not sure what your laws are there but in Maryland it is illegal for an agent to represent two buyers on the same property. At best it is an extreme conflict of interest.

Oct 09, 2012 11:09 AM #2
Janna Scharf
Keller Williams Realty Coeur d'Alene - Coeur d'Alene, ID
Coeur d'Alene Idaho Real Estate Expert

I had competing offers yesterday and the first thing the second buyer's agent asked me was if I was representing the other buyer.  :)

Oct 09, 2012 11:37 PM #3
Susanna Haynie
CO-RE Group, LLC -Real estate sales and services - Colorado Springs, CO
Colorado Springs Realtor GRI CNE MCNE ePro MRP

Had exactly this scenario the other day (buyer off the street), I decided I was representing only the buyer that I actually buyers agency with. I lost the other buyer on this house, but that was ok with me. I want my buyers to feel 'taken care of'

Oct 24, 2012 12:23 AM #4
Dana Hollish Hill
Hollish Hill Group, KW Capital Properties - Bethesda, MD
Lead Associate Broker

Unbelievable! Consumers are never going to understand agency if agents are able to act in such confusing ways. I work in three states with slightly different laws and what is needed is a national law that encourages single agency. 

As for the conflict of interest you address, it is a problem for all agencies and it is important to have a clear policy in place to address the issues if or when it arises. 

Nov 04, 2012 11:55 AM #5
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Benjamin Clark

Buyer's Agent - Certified Negotiation Expert
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