Real Estate Agent Representing Both Buyer and Seller

[cidley69]

We recently got cold called buy the real estate agent that sold us our current house, he said there's a currently unlisted house coming on market, that would be great fit for us, and he can show us house before its listed on MLS.

He also said he has couple potential buyers interested in our house, that can view ours ahead of it being MLS listed. We viewed his suggested house, and are interested. I get the feeling he is overpricing their house, and under pricing our house.

Are there any ethical or professional standard rules against agent working for both buyer and seller?

[arcticcat522]

The realtor only needs to disclose that he is working both sides. I think I had to sign a paper saying I was aware.

[ExtraSlow]

It happens, not very uncommon. If the agent is working both side you may be able to get them to drop the commissions a bit. But you do need to be watchful for any sign they don't have your best interests in mind. Although, that issue is the same in every transaction. Some agents only want to close deals, regardless of what's best for the customer. Some are great. Like anything else, trust but verify. RE agents make a lot of money, in return you should expect a high level of service, ethics and integrity. If you aren't getting those you have the wrong agent. If you don't need those, you shouldn't use an agent.

[killramos]

Nothing stopping you from just hiring your own realtor to represent your interests if you are concerned. Especially if as ES mentioned you aren’t getting a break in commission.

[ExtraSlow]

Yes, the person who represents you is your choice. And how much service and cost is also totally up to you. Some people don't even use realtors. Lot of options.

[cjblair]

Get an independent appraiser to value your house - this will provide a good reference point on how well the realtor is valuing your property (and therefore a good indicator of trustworthiness/competence).

As mentioned, not uncommon for realtor to act as dual agent, but at the very minimum I'd be looking for that realtor to chop their commission a bunch. In theory, sure the realtor can represent the interests of both sides, but in practice - especially when trying to swing a deal with two unlisted houses - it's more likely the realtor just sees dollar signs. That isn't necessarily a fault of the realtor, after all they are in the game to make a living... but it should be a consideration when making such a big decision.

If they aren't willing to cut commission, there's zero advantage to using the dual agency - definitely find another agent to represent you. Don't do anything without getting an independent party to price your house and validate the pricing your agent gave you.

[cidley69]

This quote is hidden because you are ignoring this member. Show Quote

Get an independent appraiser to value your house - this will provide a good reference point on how well the realtor is valuing your property (and therefore a good indicator of trustworthiness/competence).

As mentioned, not uncommon for realtor to act as dual agent, but at the very minimum I'd be looking for that realtor to chop their commission a bunch. In theory, sure the realtor can represent the interests of both sides, but in practice - especially when trying to swing a deal with two unlisted houses - it's more likely the realtor just sees dollar signs. That isn't necessarily a fault of the realtor, after all they are in the game to make a living... but it should be a consideration when making such a big decision.

If they aren't willing to cut commission, there's zero advantage to using the dual agency - definitely find another agent to represent you. Don't do anything without getting an independent party to price your house and validate the pricing your agent gave you.

Suggestions for independent appraiser?

[ThePenIsMightier]

I've done it, but as a buyer. I drove around the neighbourhood I wanted to live in, saw the new sign on the lawn, called the name on the sign, viewed and bought. (Even paid the asking price, LoL!)

I suppose that's doing a few things sub-optimally, but yolo. The house sold for more than double what we paid when we moved out, so I don't think we really blew it.

Overall, the price and fee structure of Realtors is fundamentally at odds with the best interests of their customers and this is a systemic problem. There are many great Realtors and so, so many who are awful. I have an enormous rant on this that I'll maybe unleash in its own thread, one day.
Similar to what ES said - they provide a service and that service has value. But I don't think anyone can deny that there are too many of them that aren't providing a valuable service and they are a problem for the industry.

[RX_EVOLV]

I agree you should definitly ask for commission cut if this is the case. They are getting 4 commissions at once here as they are likely doing the same to the buyer of your house. So it's commission on selling yours, on buying yours, on you buying the new house, and them selling that new house to you.

Also do your homework on what the house is worth. For my old house my realtor wanted to list at $575K to close at $550K. I did my own research, called him the night before listing and said list at $599K. He thinks that's too high and house will sit on market for too long, but I insisted. 2 weeks later we closed at $590K.

[cidley69]

This quote is hidden because you are ignoring this member. Show Quote

I agree you should definitly ask for commission cut if this is the case. They are getting 4 commissions at once here as they are likely doing the same to the buyer of your house. So it's commission on selling yours, on buying yours, on you buying the new house, and them selling that new house to you.

Also do your homework on what the house is worth. For my old house my realtor wanted to list at $575K to close at $550K. I did my own research, called him the night before listing and said list at $599K. He thinks that's too high and house will sit on market for too long, but I insisted. 2 weeks later we closed at $590K.

Realtors are incented to price low for quicker sale. Seems to go against their fiduciary obligation....hard to trust this bunch when a simple web search yielded more accurate market evaluation than their cumulative professional experience.

[killramos]

This quote is hidden because you are ignoring this member. Show Quote

Realtors are incented to price low for quicker sale. Seems to go against their fiduciary obligation....hard to trust this bunch when a simple web search yielded more accurate market evaluation than their cumulative professional experience.

Countered by their incentive to make more money on a bigger sale.

[ThePenIsMightier]

This quote is hidden because you are ignoring this member. Show Quote

Countered by their incentive to make more money on a bigger sale.

But their fees are front loaded and when clients are morans they think "wow, is miracle! House soldings in 48hr!! Shut up and take my money! Are you Jesus?"

It's worth losing $600 in fees to be known as "the magic woman who sells houses instantly because of her secret connections and network".

[killramos]

Guess it depends how many clients you have.

[suntan]

This quote is hidden because you are ignoring this member. Show Quote

Countered by their incentive to make more money on a bigger sale.

There have been studies done on this. Realtors will list their own properties for a longer period and not move on price as much compared to their clients' properties.

[you&me]

This quote is hidden because you are ignoring this member. Show Quote

Countered by their incentive to make more money on a bigger sale.

That's a bad way of looking at it.

A bad or unscrupulous agent pushing a seller for a lower listing price has far less to lose...

[cidley69]

This quote is hidden because you are ignoring this member. Show Quote

Countered by their incentive to make more money on a bigger sale.

What's realtor commission, 3.5% on first 100K, then 1.5% for remainder?

1.5% x $40K = $600, that not much of a motivator to vs making a quick sale.

[spikerS]

I can provide some insight as I grew up in a RE agent household, and helped my dad do a lot of his deals later in his career and life.

What you are referring to is dual agency. The realtor that is representing both sides is required by law to disclose this information to all parties involved, and get signed declarations of this from all parties before any negotiations.

I HIGHLY recommend NOT going along with that. The biggest reason is that RE agents are to act in the best interest of their clients. Get the lowest price for the buyer and the highest price for the seller. The agent will almost without a doubt act more favorably for the seller as the selling price of the house will affect their commission. In my mind this is a conflict of interest that will impact the buyer negatively.

In deals I have seen in the past, the dual agency agreement usually reduced the total commission by about 40% which can be a good chunk of change.

As mentioned earlier in the thread, at the very least, I would be hiring an independent appraiser for both properties to protect yourself, and will give you an indication if your thoughts about the pricing of both properties are correct. However, IMO, the realtor has zero self interest in lowballing the value of your house. I know he states that he has buyers lined up for your house, but in my mind that is just a feel good line to get you interested in the other house, and there probably isn't anyone lined up. I don't think the RE market is currently that hot.

If it were me, I would be getting my own realtor that will represent my interests better. This other realtor is coming across a little shady in my mind. Again, just my $0.02

[killramos]

This quote is hidden because you are ignoring this member. Show Quote

That's a bad way of looking at it.

A bad or unscrupulous agent pushing a seller for a lower listing price has far less to lose...

That’s on you for hiring a shitty agent

[ThePenIsMightier]

I started another thread pertaining to the shortcomings of the realty industry. Since this thread is just about a realtor representing both buyer and seller, I didn't think my more general rant was applicable.
Link:

https://forums.beyond.ca/threads/414...s-Aren-t-Great

[89coupe]

You can also sign a customer representation agreement that allows you to represent yourself.

I just did a deal doing exactly this. The buyer represented himself. Super easy and saves the seller 50% of the commission.