What is a "listing agent's buyer's agent?"
December 11, 2016 8:54 PM Subscribe
Several recent open houses we've gone to in southern California have been hosted by realtors who introduced themselves as "the listing agent's buyer's agent". What does this mean?
Our assumption was that the listing agent is a broker, and that one of the ways for neophyte realtors to get clients and experience was to host open houses (freeing up the listing agent to drink pina coladas poolside). If that resulted in actually hooking a client who would allow the "listing agent's buyer's agent" to actually be THEIR buyer's agent, win-win: the broker would get a commission as the listing agent and part of their buyer's agent's commission upon a successful sale.
Is that correct?
Our assumption was that the listing agent is a broker, and that one of the ways for neophyte realtors to get clients and experience was to host open houses (freeing up the listing agent to drink pina coladas poolside). If that resulted in actually hooking a client who would allow the "listing agent's buyer's agent" to actually be THEIR buyer's agent, win-win: the broker would get a commission as the listing agent and part of their buyer's agent's commission upon a successful sale.
Is that correct?
I think whats happening is kind of what you said but add in that the listing agent would be ethically compromised if they tried to act both as the sellers agent and the buyers agent. So the sellers agent has the open house and whatever real estate firm they work for sends an agent or agents along to the open house to scoop up potential new buyers. Its an attempt to keep all the money in the agency.
posted by WalkerWestridge at 9:51 PM on December 11, 2016
posted by WalkerWestridge at 9:51 PM on December 11, 2016
Some general rules about real estate and realtors:
- Realtors split commissions - usually about 3% for the listing agent and 3% of the agent who brings the buyer. These can be one and the same person/agency, but the whole MLS (multiple listing system) is designed from the ground up to make it easy for any agent to sell any other agent's listing.
- Some agents may focus a bit more on buyers than others - for marketing purposes it seems a bit more likely that an agent will advertise themselves as a "buyers agent" if they show a focus one way or another because sellers aren't as worried as buyers that the agent doesn't have their best interest at heart (sweeping generalization, but it seems to be the way people in general think)
- but sellers SHOULD be at least a little suspicious when they open their home to a open house, because many agents view the real value of open houses as collecting potential buyer leads, more so than selling the house they're doing the open house at. When you think about it, the odds are fair that a visitor to an open house will be interested and qualified in this particular house they go visit, but they are nearly 100% likely to be in the market for SOME house.
- to tell if your agent is LEGALLY representing the seller, the buyer, or both, you'd have to ask them directly. If a state and the real estate board of that state permit it, odds are the contract will be that of dual agency. I really think it's down to the personal ethics and trustworthiness of the individual realtor as to whether you can trust them to represent you fairly, which is why I think Real Estate is such a relationship game.
Which is why I would never do a real estate closing, buying or selling, without an attorney. Assuming there's a mortgage attached, the bank should do a lot of the "ensuring" as to whether the transaction is done right and the property is as represented, but I'd always want:
- an independent home inspection and report (which is NOT the same as an appraisal)
- title insurance
- and an appraisal showing that what I'm paying is not more than fair market value.
posted by randomkeystrike at 6:33 AM on December 12, 2016
- Realtors split commissions - usually about 3% for the listing agent and 3% of the agent who brings the buyer. These can be one and the same person/agency, but the whole MLS (multiple listing system) is designed from the ground up to make it easy for any agent to sell any other agent's listing.
- Some agents may focus a bit more on buyers than others - for marketing purposes it seems a bit more likely that an agent will advertise themselves as a "buyers agent" if they show a focus one way or another because sellers aren't as worried as buyers that the agent doesn't have their best interest at heart (sweeping generalization, but it seems to be the way people in general think)
- but sellers SHOULD be at least a little suspicious when they open their home to a open house, because many agents view the real value of open houses as collecting potential buyer leads, more so than selling the house they're doing the open house at. When you think about it, the odds are fair that a visitor to an open house will be interested and qualified in this particular house they go visit, but they are nearly 100% likely to be in the market for SOME house.
- to tell if your agent is LEGALLY representing the seller, the buyer, or both, you'd have to ask them directly. If a state and the real estate board of that state permit it, odds are the contract will be that of dual agency. I really think it's down to the personal ethics and trustworthiness of the individual realtor as to whether you can trust them to represent you fairly, which is why I think Real Estate is such a relationship game.
Which is why I would never do a real estate closing, buying or selling, without an attorney. Assuming there's a mortgage attached, the bank should do a lot of the "ensuring" as to whether the transaction is done right and the property is as represented, but I'd always want:
- an independent home inspection and report (which is NOT the same as an appraisal)
- title insurance
- and an appraisal showing that what I'm paying is not more than fair market value.
posted by randomkeystrike at 6:33 AM on December 12, 2016
When we've encountered this, they're juniors who have had the file farmed to them by the senior "listing" agent. There are a few locally who are infamous for this tactic: you see them once, then spend the rest of the time dealing with their "associates". They are directly paid by the senior agent, if not employees then working on contingency.
If they're fishing to signing buyers at an open house, that's soliciting double agency (having the same broker represent the buyer and the seller). That's incredibly unethical in my view. Double agency is very dark ethical gray area, and should be avoided if at all possible. Who's interest will the "listing" agent's associates represent when push comes to shove, when negotiating price or conditions?
I'd avoid if possible. Get your own independent agent, if that's how you want to go.
posted by bonehead at 8:02 AM on December 12, 2016
If they're fishing to signing buyers at an open house, that's soliciting double agency (having the same broker represent the buyer and the seller). That's incredibly unethical in my view. Double agency is very dark ethical gray area, and should be avoided if at all possible. Who's interest will the "listing" agent's associates represent when push comes to shove, when negotiating price or conditions?
I'd avoid if possible. Get your own independent agent, if that's how you want to go.
posted by bonehead at 8:02 AM on December 12, 2016
Big listing agents frequently have a staff of "buyer agents" who do things like open houses and would usually be the ones to show the listed properties to buyers, and then try to keep the buyers as clients to see other houses if the first one didn't work out.
It almost always makes sense to have your own agent. But if it's a tight seller's market, sometimes it can give a little advantage to be a client of the seller's agent because they are more likely to push your deal onto the seller in order to pick up commission to both sides of the deal. Which is unethical/illegal but happens.
posted by Melsky at 9:12 AM on December 12, 2016
It almost always makes sense to have your own agent. But if it's a tight seller's market, sometimes it can give a little advantage to be a client of the seller's agent because they are more likely to push your deal onto the seller in order to pick up commission to both sides of the deal. Which is unethical/illegal but happens.
posted by Melsky at 9:12 AM on December 12, 2016
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posted by vrakatar at 9:10 PM on December 11, 2016