I was talking with a home buyer (now home seller) about how he bought his properties. And he said he has always used the listing agent. And he claims he's had the best deals doing it that way.
Does the buyer really think he can get a better deal by using the listing agent which results in dual agency.
Apparently, a lot of them do. And in states where dual agency is legal, many buyers are still exploring this idea.
What are the pros from the buyer's point of view?
I asked a Buyer why he always used the listing agent during the times that he bought property, and here's what he told me:
- Listing Agent (LA) is more knowledgeable about the property than any other agent
- LA has a relationship with the seller which may make it easier to communicate buyer's requests and concerns, and have the seller more willing to cooperate (at least, that's what the buyer thinks!)
- LA will make more money representing both parties and therefore will work harder to make it happen (Does he really think the Buyer's Agent works any less?)
- LA may be willing to rebate part of his commission to the Buyer (On the other end, the seller may also ask the agent to reduce his commission because of double-ending the deal....not that this is going to happen or that the agent will agree either way.)
What are the cons from everyone's view? It's worse than walking on egg shells.
- The biggest problem will occur when there is a breakdown in communications. Sometime during the negotiations, one side may think the agent is not representing their best interests. Just remember, the agent serves as a conduit between two parties, cannot disclose confidential information shared by one party to the other party.
- Seller hired the agent and is paying for agent's service --- so seller will want to believe that agent is working for him, not the buyer. This is understandable because it's the seller who is paying the agent's commission.
- It's walking a fine line when presenting requests for credits, concessions, repairs because of fear of offending or insulting either party that may lead to cancellation of contract.
- Suspicions may arise when neither side is getting what he wants. Clients want to know who is the agent really representing, what information is he sharing or not sharing to the detriment of one party over the other?
It's risky...and although some agents can handle this type of transactions, there is always a possibility that it may not end well for either party to use the same person to handle both ends of the deal.