Financing in 55343>Question Details

G, Home Buyer in 55343

I am looking at a townhouse in Hopkins. the agent is representing both myself and the seller. how is this of benifit to me? If any

Asked by G, 55343 Wed Jan 5, 2011

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It's not. You engage a Realtor to exclusively represent you. Sometimes, people will make the case that when a listing agent represents both the buyer and the seller that there can be price concessions but I don't buy that. If you get a buyers agent who negotiates well for you you could very well get the same concessions, better concessions and you'll get great individual care.

There are a lot of good agents on Trulia. Check them out. I'd recommend Adam Duckwall of Edina Realty at 651-353-4650 or adam@adamduckwall.com
1 vote Thank Flag Link Wed Jan 5, 2011
WOW, this is a slippery slope question. I used to be an EXCLUSIVE buyer agent, meaning my whole company did not do listings with sellers because we didn't want to muddy the water with buyers/sellers wondering who represented whose best interests. This is of no benefit to you other than having one person as the "go to". PROVIDED that agent is exceptional and executing due diligence in their ongoing and constant communication to keep the transaction moving, AND, that they are scathingly meticulous about following all of the rules of dual agency! (the agent should have explained all of that to you). Other than that, the State of MN goes to great lengths to explain to you why dual agency could be to your detriment. Good luck!
0 votes Thank Flag Link Thu Jan 13, 2011
As others have mentioned below, very often there is little benefit to you by having the agent represent the seller and yourself. They already have a contract with the seller to try to get the best price as possible for them and look out for their best interest as being their client. I'm not saying that the agent will not be fair, but it is better to have your own agent looking out for your best interest and negotiating for you.
0 votes Thank Flag Link Sun Jan 9, 2011
As has been mentioned in a previous post, the only advantage to having the buyer and seller represented by the same agent is the possibility (not guarantee) of the agent lowering their commission for the seller (which may not necessarily translate into a savings for the buyer).

Minnesota law does allow for duel agency as long as that situation is disclosed to both parties and both parties agree in writing to this arrangement. If either party opts out, then this situation will not work.

What you lose in a duel agency situation is that the agent cannot advise either buyer or seller as to strategy regarding negotiating terms and price. Neither buyer nor seller could communicate strategy to the agent as the agent may be compelled to report this information to the other party. The agent becomes a conduit between the buyer and seller.

Most agents are wise not to represent both sides of a transaction excepting in circumstances where price and terms have been negotiated by parties before hand (transactions involving family members, etc). In this case they are acting more as a facilitator rather than advocate.
0 votes Thank Flag Link Sat Jan 8, 2011
The only possible benefit to you would be if the agent is willing to lower his commission since he will be getting the commission from both sides.
Other than that how can he really be benefiting you?
Imagine if you were the seller of the house and he was your agent for that, as a seller the only way you would agree to this was if the agent guaranteed you that he would still get the best price possible right? Which automatically puts you at a disadvantage, how do you negotiate with yourself?
Sean Wait
Senior Loan Officer
Spectra Financial Home Mortgage
Mendota Heights, MN 55120
Sean@spectrafinancial.com
0 votes Thank Flag Link Wed Jan 5, 2011
All of the local agents have already given you great advice, I just want to add to the agents who are out of state to avoid answering any questions to this because dual agency is treated very differently state to state and their answers (some of them) have been wrong as it pertains to our state.
Web Reference: http://www.lennyfrolov.com
0 votes Thank Flag Link Wed Jan 5, 2011
I'm confident that you already sense that this is a disadvantage to you, G.
Clearly, the seller's agent you are talking to developed a trust relationship with his/her seller when hired to sell the home. This agent was given secret information regarding the seller's bottom line price and ideal closing date.
That agent is financially and legally attached to the seller, to keep the information private and to perform for the seller. You, as buyer, become the tool which the agent uses to make the seller happy.
You are at a clear disadvantage when you enter into this transaction unrepresented by your own independent real estate counsel. I strongly recommend that you decline this inadequate means of representation and instead get your own "Buyer's Agent".
0 votes Thank Flag Link Wed Jan 5, 2011
It's interesting that nobody endorses dual agency -- it's not legal in Kansas, but we have "Transaction Broker" agency relationships. As described, a "Transaction Broker" has promised to advocate for neither the Seller nor the Buyer, and the relationship must be agreed upon by all parties. I've compared the relationship to "family business" in which the parties must come to a reasonable, mutually acceptable agreement, and everybody should still feel comfortable with each other when the deal is done. A buyer and seller aren't adversaries, as many agents may feel, but are mutually inclined to the same general result: the transfer of property. An agreement still means that all parties are signing a contract. If they don't like the terms, don't sign.
In some cases, the agent knows the property extraordinarily better than another agent, and may indeed be able to honestly assist both parties. Unfortunately, where money is concerned, it's hard to trust anybody. At least a buyer's agent can ask informed questions. It's also dubious to carve commissions, especially in a multi-offer situation. In Kansas, it's not ethical to negotiate commission with a buyer , but the SELLER can negotiate their commission with their agent. To sum up, you have to have some knowledge of real estate and a great sense of the integrity of the people involved to determine whether or not all can be trusted. Frankly, I've been impressed with people's integrity more often than their dishonesty, but that doesn't mean I encourage my kids to trust everybody! Do take care.
0 votes Thank Flag Link Wed Jan 5, 2011
Hi, G

A listing agent first loyalty and fiduicary responsibility is to the seller. And its a very fine ethical and legal line they walk when they also become your agent. But once again, their first loyalty and fiduciary responsibility is to the seller. Also, their commission will be determined by how much they sale the home for. That said, very few realtors can walk such a fine line and maintain their professional integrity and accountability. Only you know whether or not you may have one of those rare exceptions offering to represent you. But if you have even the slightest doubt, get your own agent.
0 votes Thank Flag Link Wed Jan 5, 2011
The Realtor you are working with represents the seller only! If you are comfortable with this and feel like you want to go forward with this dea,l continue. My best suggestion would be to find your own Realtor, who would be commited to give you advice and help you through this transaction. BEST OF LUCK ON YOUR UPCOMING PURCHASE.
0 votes Thank Flag Link Wed Jan 5, 2011
It really is of no benefit to you whatsoever. The realtor, because he is working for the seller is going to try to get the best deal for his seller. Because he is also working for you, the buyer, he should also be out for your best benefit. But because he's serving two masters here, he's stuck in the middle and really of no use to anyone. He can't advise you on whether you should offer less than what you're planning, and he really can't give any information about your finances to the seller. My advice...get yourself a buyer's agent! You'll be much better served.!
0 votes Thank Flag Link Wed Jan 5, 2011
It really is of no benefit to you whatsoever. The realtor, because he is working for the seller is going to try to get the best deal for his seller. Because he is also working for you, the buyer, he should also be out for your best benefit. But because he's serving two masters here, he's stuck in the middle and really of no use to anyone. He can't advise you on whether you should offer less than what you're planning, and he really can't give any information about your finances to the seller. My advice...get yourself a buyer's agent! You'll be much better served.!
0 votes Thank Flag Link Wed Jan 5, 2011
Dual agency is not the best situation for you. When negotiating with the seller, having your own representative who knows the market will aid you in getting the best price (and other terms) possible. The analogies some of the other answers have made regarding a lawyer representing both sides is very appropriate. When it comes to putting a deal together you should have your own representation.

Good luck!
Web Reference: http://www.eliasjohnson.com
0 votes Thank Flag Link Wed Jan 5, 2011
If you are comfortable with dual agency and like the agent, then move forward--if not consider your own representation...however, depending how far into transaction are you it may be too late--was an offer already placed....
0 votes Thank Flag Link Wed Jan 5, 2011
You have entered a situation called Dual Agency. The agent should have explained what that means but to reiterate just in case - Dual agency is when an agent or agents from the same brokerage owe fiduciary duties to both the seller and buyer in a transaction. I personally do not agree with dual agency and do not put myself professionally in that position because it limits the abilities of an agent. The agent is no longer allowed to advise or negotiate on behalf of either party, simply convey messages back and forth. There are times when the agent involved can cut their commission rate to the seller and offer "savings" to you the buyer, but with no-cost representation from your own agent, you likely may have been able to negotiate down price that far or farther yourself. Long story short, in my professional opinion, you would never hire the same lawyer for prosecution and defence... Why hire the same professional to take care of one of the biggest purchases you'll make!
0 votes Thank Flag Link Wed Jan 5, 2011
The benefit if any is limited to one thing, commission. What I mean by this is that the agent may have a lower commission if there is no co-broke which means you may be able to purchase the property for less than you would there was a Buyer's Agent involved. The problem you could have is that unless you know the market you could still over-pay. You can ask the agent about the commission structure but keep in mind he is not obligated to answer because it is a private contract between Seller and Agent. The agent most likely had a relationship with the Seller prior to you so you are putting quite a bit of faith that he or she will get you the best deal. They may argue that the commission is less but the realty is it's only 1% or 2% savings and a Buyer's Agent may save you more through negotiations. A dual agent is sometimes unavoidable depending on circumstances but I would never say it is desirable. The best analogy I use is if you were ever to go to court, would you want only one attorney representing both the plaintiff and defendant especially if the attorney knew the other party better than yourself?
0 votes Thank Flag Link Wed Jan 5, 2011
I don't think there is a benefit to you. Who told you there was? Is the agent offering you an incentive?
0 votes Thank Flag Link Wed Jan 5, 2011
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