How Does Real Estate Work Behind The Scene?

Real Estate Agent with Re/Max 10 New Lenox Illinois

A Buyer calls me and says “hey a Relative you served in the past has recommended I work with you.”  “There’s this home I am interested in.”  “Can I forward you the details and arrange for the Agent who shared the property with me to call you to preview it?”  This scenario happens quite often with Buyers because they do not fully understand how real estate works behind the scenes.


Realtors take full advantage of technology to affectively serve the Consumer.  When a Consumer initially calls an Agent to inquire about a property they have found online, during the conversation a smart Realtor will ask qualifying questions like how soon you want to move, what is your price range, locations you most desire, your needs, wants, and best way to communicate with you?  This generally involves you sharing your email, and giving permission for the Agent to create an automated search of properties for you.


The automation is so good, it looks like the Agent has personally taken the time with each message to search out homes tailored to your specifications, including a personalized message.  All this is done to keep you entertained while you determine the right timing to get serious about purchasing a home. 


Finally when you are serious about purchasing a home, you may not necessarily select the Agent who set up the customize search, to represent you in purchasing a home of your choice.  In the amount of time you have been entertained in reviewing all the homes online, a Relative or Close Friend may refer an Agent who served them well.


Realtors work in a world of cooperation.  We input our Listings into a Multiple Listing system, affording technology to share them online.  It is very easy for a Consumer to think the Agent who created the customize search, are sending their own Listings to a Consumer, when in reality the Consumer is reviewing all the listings matching the profile of properties created for them.


Now imagine the conversation I had with the Agent who created the automated search for the Buyer who informed them, they prefer having me to serve them in their purchase?  This other Agent is naturally disappointed because there has been an ongoing sharing of property information probably for months with the hope the Buyer will state loyal to them for creating the automation convenience to be entertained with all the customized properties to review online, sent directly to the Consumer’s email.


The Consumer did not understand the moment they switch Agents, they basically rob the initial Agent who set up the automation, from earning a commission.  In the scenario I mentioned at the start, the Buyer wanted me to preview a home not the Agent’s Listing.  Had they stayed loyal to that initial Agent, upon purchasing and closing on a property with the Buyer represented by that initial Agent, that Agent would have been entitled to the Buyer’s Agent side of the transaction.


Listed properties generally have a certain commission agreement which is split 50/50 when there is a Buyer’s Agent and a Seller’s Agent involved in a transaction.  This split commission agreement is earned when the procuring Buyer’s Agent and the Listing Agent cooperate in representing their Clients in moving a mutually agreed upon transaction to the closing table.


When Buyers have been sent a property by one Agent and elect to have another Agent represent them in purchasing the same property, this creates a big huge grand gigantic possible procuring cause argument between Agents.  I am writing about this because it can be an action done by a Buyer innocently or out of unfortunate ignorance.


Agents, upon an initial conversation with a Buyer may attempt to get them to agree in writing to loyalty to avoid this kind of frustration, which can easily lead to a grievance filed among Colleagues, creating a arbitration leading up to court action between Colleagues, to determine if a Client was stolen, or if there is a proven uninterrupted chain of events by the initial Agent serving the Buyer, resulting in them earning some form of compensation.  The funny part in this senario is usually the Buyer has closed on the home, enjoying the home they purchase oblivious to a battle they created.   


Buyers can be driven by their emotions.  It can be something as simple as an Agent demanding the Buyer prove they are qualified, which can send an unreasonable emotionally thinking Buyer searching out another Agent, when they are still in the entertaining season of their property search. 


It is very uncomfortable for me to call an Agent to inform them the Buyer they have been serving for some time no longer wants them to represent the Buyer, who they believe has given them their unconditional loyalty.


Imagine how awkward the notice to the other Agent.  In the world of cooperation, I call it the “cut-throat” nature of real estate.  Please remember the Agent representing a Buyer earns a living by a commission earned only when they help their Buyer get to the closing table, unless there is some other Agent/Buyer agreement created.


“When we know better, we do better!”  A profound statement I heard my Ms. Gladys Knight make in a radio interview when she shared how she believed Diana Ross, who she notice standing in the stage wings observing her performance had asked Berry Gordy to remove her and The Pips from the concert tour in the early years of her long amazing career, a punishment for performing so well.  They were an opening act to the Supremes and appearing to be a threat to the audience enjoying their performance more than the Supremes’.


When Buyers are in the entertaining season of their property search they tend to want to fire an Agent who will require them to prove they are a qualified Buyer before moving forward to fully serve them as an affective Buyer's Agent. 


Foolish Agents who show unqualified Buyers properties, risk valuable time wasted in an industry where a steady paycheck is never guaranteed.  Plus, it is an injustice to the Buyer to just allow them to tour homes not knowing officially if they can afford to purchase them. 


Now, imagine how unfair those Pips who had a Knight name Gladys felt how “Cut-Throat” their industry, when their sincere outstanding performance was unfairly rewarded by removing them from a well received tour, for giving the very best of themselves to their cherished audiences? 


Please Consumers, do not purposely allow yourself to be a product of “Cut-Throatiness!”  Fire an Agent only because of poor customer service, and not because you do not like how they are demanding you to do the right thing by them, and ultimately for your good to keep you on the right and smoothest path to acheiving your goal of homeownership.  Indeed, I hope I have made it plain and simple enough to understand how not to be?

Comments (6)

Dorte Engel
RE/MAX Leading Edge - Bowie, MD
ABC - Annapolis, Bowie, Crofton & rest of Maryland

Dear Dale,

Yeah, it happens. But it is still best to stick to the equal, proper & ethical interaction.

Oct 31, 2018 10:03 PM
Leif Price
Chirpy Home - Portland, OR
Blogger at Chirpy Home

Indeed, the behind the scenes are not all good. But the recourse should always be proper, no matter the situation we are in. 

Nov 01, 2018 12:58 AM
Margaret Rome Baltimore 410-530-2400
HomeRome Realty 410-530-2400 - Pikesville, MD
Sell Your Home With Margaret Rome

Dale Taylor And agents, please educate the buyers before this happens. Don't forget about explaining Buyer Agency and loyalty

Jan 11, 2019 07:55 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

So many points of education within your post, Dale Taylor!  Well done ...

The only real solution to this problem is education ... Margaret Rome, Baltimore Maryland (and you) are 100% correct.  We have a responsibility to see that they are educated ... but they do too.  I remain in awe of the percentage of those buyers/borrowers that enter the process completely blind.  Hopefully, your plea at the end of your post is heard by many ...


Jan 17, 2019 07:18 AM
Margaret Rome Baltimore 410-530-2400
HomeRome Realty 410-530-2400 - Pikesville, MD
Sell Your Home With Margaret Rome

Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi Receiving calls from buyers and agents, I am aware of how uninformed they both are. It is up to us to help educate on a one to one situation. A very slow process but... 

Jan 17, 2019 08:10 AM
Kat Palmiotti
406-270-3667,, Broker, eXp Realty - Kalispell, MT
Helping your Montana dreams take root

We need to educate buyers on how the process works, because they really don't know!

Mar 23, 2019 03:47 AM