5 Reasons Why a Buyer SHOULD NOT to Talk to a Listing Agent

By
Real Estate Sales Representative

5 Reasons Why, as a Buyer, You SHOULD NOT

Talk to a Listing Agent

 

Author’s Note:

This article is based on real estate practice in the South Durham Region of Ontario and, in particular, the Cities of Oshawa, Whitby, Clarington, Ajax and Pickering.

The position may be different in other geographical jurisdictions.

 

1.    The Listing Agent is the agent of the Seller – not you!

 

image showing the word CONFIDENTIALYou have the right to expect the sales representative, who works with you to find your future home, to deal with all information that you give them with total confidentiality and to represent your interests, and your interests alone, without any actual, or perceived, conflict of interest.

 

image of a house and a salespersonIt is important for you to understand that the Listing Brokerage, and its sales representative, whose name is on the FOR SALE sign and on advertisements of the home for sale, IS THE REPRESENTATIVE OF THE SELLER.

 

2.   image of law booksThe Seller’s agent has significant legal obligations to the Seller.  They are required to inform the Seller of all relevant information that they have received from you.

 

Personal information that you provide to a sales representative, can be very important, from a strategic perspective, when negotiating with the seller.

 

You should be aware that, if you speak to the Seller’s agent at all, you may, inadvertently, give information to them (and through them to the Seller) that will weaken your negotiating position.

Provision of this information could seriously affect the price that you may have to pay to purchase your future home!

 

For example, you may tell the Listing Agent that you have to relocate by a certain date. In negotiations, if you decide you want to buy that property, this information could be used, against you, to the Seller’s advantage. Your deadline could be used to put you under pressure and cause you to pay a higher price. This is a standard tactic used in business negotiations.

 

3.  image showing hands pointing on opposite directions  If the Listing Agent also attempts to represent you, they inevitably encounter conflicts of interest.

 

The problem is that, even if they do everything correctly “by the book”, you can suffer doubts during the negotiation process – “are they REALLY acting in your best interests in all aspects of the process?”

 

This position is recognized by the law in Ontario which requires Real Estate Brokerages, and their sales representatives, to explain to you the implications of them representing both the seller and the buyer in the same transaction.

 

Most sellers’ representatives try to get around this by “distinguishing” between representing the seller as their “client”, and “providing services” to the buyer as their “customer”. The rational for this is that they have lesser responsibilities to a “customer” than to a “client”.

 

In these circumstances, the Listing Agent has significant responsibilities to the seller (their “client”) but very limited responsibilities to YOU as the buyer (their “customer”).

 

Frankly, the distinction is contrived.

 

A brochure titled “Working with a REALTOR ® – the Agency Relationship” provides the explanation, required by the law of Ontario, about the legal and ethical obligations in an real estate agency relationship. Click here for a copy of the brochure.

 

The only way for a sales representative to completely avoid any perceived conflict of interest is for them to only provide advice to either the Seller OR the BuyerNOT to both.

 

image showing the word TRUSTThe issue of TRUST often arises in these circumstances.

 

If you don’t use an independent agent to represent you in negotiations, you may get the impression that you can’t trust the Listing Agent.

 

However, this is not a question of trust.

 

As explained above, the Listing Agent’s legal responsibility is to the Seller; i.e. to get the maximum possible price, on the best possible terms, for the Seller.

 

Here, it is not a question of trust. It is a question of legal responsibility.

 

4.    image of person with an adviserBy using an agent, independent from the Listing Agent, you give yourself every opportunity to buy the property of your choice at the best possible price and on the terms that suit you best.

 

When you sign a Buyer Representation Agreement with an independent Brokerage, you can confidently provide them with all relevant information about your circumstances. Their legal obligation, then, is to YOU.

 

This means that you can have full and open discussion about all of your circumstances with your independent agent; the information you provide to them is totally confidential; and they can advise you on the best way to negotiate the purchase of the property of your choice on the best possible terms.

 

You are well advised NOT to discuss a property with the Seller’s representative but, rather, appoint an independent agent as your Buyer Representative to assist you to find, and negotiate, the purchase of your future home.

 

The role of your independent agent is to represent YOUR interests, and your interests ONLY.

 

It is impossible for a Listing Agent (as the Seller’s Representative) to provide YOU with the level of confidentiality, and the focus on YOUR interests, that you are entitled to!

 

image showing a hand with an OK signAND THE GOOD NEWS:

5.    In virtually all circumstances, you will NOT have to pay your independent agent for representing you.

 

The reason?

In almost all circumstances, your agent will be paid by the Listing Agent.

 

Some people choose to deal with the Listing Agent because they think that this will help them to buy the property cheaper than if they work with an independent agent.

 

For the reasons mentioned above, in these circumstances, it is very likely that the buyer will end up paying more than if they used their own agent.

 

Keep in mind that the commission being paid by the Seller to the Listing Agent is an arrangement between those parties. You have no benefit, or entitlement, from that agreement.

 

If you do not use your own agent, the Listing Agent will still be entitled to the full commission from the Seller and does not have to share it with anyone.

 

Conclusion:

Doesn’t it make sense to use your own agent?

·     You will receive independent advice about the market value of the home

·     You will receive independent advice about any issues with the home or location that you may not have discovered for yourself

·     You will have the benefit of the advice of a skilled negotiator whose responsibility is to help you buy the property at the best possible price and on terms that will suit you best

·     You could well end up paying less for the property than if you dealt with the Listing Agent

·     And you get all of this by using an independent agent

·     And in most cases you won’t have to pay for all of those benefits!

It’s a no brainer!

 

Find Houses for Sale in Oshawa, Whitby, Clarington, Ajax & Pickering, Ontario

 

image showing magnifying glass over housesYOU ARE INVITED to visit my website, at any time and as often as you like, to find pictures & details of homes for sale.

 

For photos and details of homes currently for sale:cartoon depiction of Durham Region

 

In Pickering

 

In Ajax

 

In Whitby

 

In Oshawa

 

In Clarington

 

You can also arrange to be notified when homes, that meet your criteria, come onto the market.

These services are available to you without obligation.

 

If you are thinking of selling, you can also:

ü Search on my website for homes, similar to yours, that would be competition for your home, if you list it for sale

üimage showing a figure looking at housesObtain an indication of the market value of your home

  

For answers to your questions, email me; or call 905-723-5944.

 

About the Author:

photo of Brian WisemanBrian Wiseman LL.B., CIPS, is a Sales Representative with Keller Williams Energy Real Estate Brokerage in Ajax & , Ontario, Canada.

 

In past lives, Brian was a Partner in Legal Practices, specializing in Real Estate and Business Law (not in Family Law!) in Australia and a Principal of a successful Financial Planning Practice in Australia.

 

After the sale of his business interests in Australia, Brian started a new adventure by relocating to Canada with his Canadian wife.

 

He is particularly interested in relationships in real estate:

ü when 2 or more are purchasing a property;

ü when a relationship has ended and the home is to be sold – see The Future Focus Method

 

Brian has completed a basic intensive training course in Dr. William Glasser’s Choice Theory Psychology, upon which The Future Focus Method is based.

 

Brian is not authorized to give legal advice or financial planning services in Canada.

 

He is not authorized to provide marriage counselling.

   

He IS AUTHORIZED to provide real estate advice in Ontario.

Comments (7)

Pete Xavier
Investments to Luxury - Pacific Palisades, CA
Outstanding Agent Referrals-Nationwide

Brian-Absolutely great post, it's the same deal here in the United States.

Jan 14, 2015 07:31 AM
Brian Wiseman LL.B. CIPS
Oshawa, ON
The WiseMan of Real Estate

Thanks, Pete!

I appreciate the feedback.

Jan 14, 2015 11:14 AM
Chuck Willman UtahHomes.me
Utah Homes - Alpine, UT
Utah Homes

Nice post Brian! I have had the sad experience of working with buyers who go to an open house or new home development unaccompanied. In many of these instances they nullify their right to be represented by an agent who will represent their interests.

Jan 31, 2015 07:59 AM
Brian Wiseman LL.B. CIPS
Oshawa, ON
The WiseMan of Real Estate

Thanks for your comment, Chuck.

For some time I thought I was the only one who had this view!

Feb 02, 2015 02:07 AM
Scott Turner
Realty Source, Inc - San Diego, CA
REALTOR(r)

Love your style of marketing. Excellent. 

Dec 17, 2015 11:41 AM
Troy Erickson AZ Realtor (602) 295-6807
Good Company Real Estate - Chandler, AZ
Your Chandler, Ahwatukee, and East Valley Realtor

Brian - 5 great reasons why a buyer should be working with their own agent.

Dec 17, 2015 12:12 PM
Sana Solanki
Kingsway Real Estate - Brampton, ON
Homes!

Yes great style of marketing... most buyers are now going to open houses, having signed a buyer rep. agreement, and talking to the listing agent directly.

Sep 14, 2016 01:38 PM