Why do buyers use the listing agent to buy the house and should they?

By
Real Estate Agent with Alain Pinel BRE 01367196

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.

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Rainmaker
2,773,526
Kathleen Daniels
KD Realty - 408.972.1822 - San Jose, CA
San Jose Homes for Sale-Probate & Trust Specialist

Pacita, while it can work ... I feel for the most part it is a dicey proposition. It's my firm belief that best practice is each party has their own representation. There are times when it may make sense ... but in general, for the reasons stated above ... I think not.

Oct 02, 2015 08:56 AM #1
Rainer
402,215
Dan Hopper
Keller Williams Realty Downtown LLC - Denver, CO
Denver Realtor / Author / Advocate/Short Sale

Thanks Pacita for this topic... there will always be pros and cons to either procedure of representing buyers.  Many States, just as in Colorado, we do not have "dual agency or sub'agency" as both are defined as illegal representaions.  Yet, we can still have both worlds of working with buyers in an agency  or transaction broker (non-agency relationship), thus the ability to work with both the seller and buyer on same transaction as a transaction broker.  Cleary define what that means to the buyer / seller, and PERFORM in a proper manner that is defined by that working relationship.

Oct 02, 2015 08:57 AM #2
Rainmaker
2,496,665
Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

Personally, I believe using the listing agent when you are buying a home is a double edged sword.  While best practice usually dictates that the buyer and seller have their own agents to represent them, I have also found that inside information the listing agent has, can often give a buyer an edge when it comes to getting an accepted offer in a brisk market!  

Oct 02, 2015 09:58 AM #3
Rainmaker
449,514
Diana Dahlberg
1 Month Realty - Pleasant Prairie, WI
Real Estate in Kenosha, WI since 1994 262-308-3563

There are a number of scenarios where using the Listing Agent also works in the best interests of both parties ... and isn't that the goal in real estate?  We are to be open, fair and honest with all parties and when I think of the few times I was involved in the double bubble situation I can honestly say, things were better for all parties and due to the complexity of some of the situations could have been aweful had the 'wrong agent' been on the "other side". Every situation brings with it -- different challenges.  Although I said all that ... there have also been times when my buyer lost out trying to buy one of my listings ... and it would not have mattered who their agent was, their offer would not have made the grade!  Nuf said =)

Oct 02, 2015 11:56 AM #4
Rainmaker
195,174
Antonio & Alexia Cardenas
Alameda County - San Leandro, CA. - San Leandro, CA
"The Realtors In Motion"

The listing agent always has that opportunity because of the simple fact that it is his/her reponsibility to get the listing sold. All the advertising dollars invested are to get the buyer. Money talks and the facts are the facts, having home inspections done in advance, presenting them to the buyers before they write an offer, counseling the seller about the possibility of representing the buyer at the listing appointment goes a long way to get prepared for that eventuality. I do my number do "double-enders" and in some areas it is not that different from single representation. Thank you for the post Pacita.

Apr 28, 2016 02:03 AM #5
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Rainmaker
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Pacita Dimacali

Alameda/Contra Costa Counties CA
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