Home Buying in Rhode Island>Question Details

Mf, Both Buyer and Seller in Rhode Island

Am I being paranoid, or is my potential realtor working under conflict of interest?

Asked by Mf, Rhode Island Thu Sep 23, 2010

I viewed a lovely home for sale at an open house, and the realtor working the open house has been in contact with me over selling my condo and buying a new house. Somehow I feel there's a conflict of interest, but I can't necessarily point it out. The realtor works for a company that has some type of agreement with a builder. They receive funds for showing the builder's homes. This realtor also in turn receives some type of incentive for showing his homes. However, the realtor states that if I wanted to buy the home, he would be the buyer's realtor (meaning My realtor) and would not be representing the builder at all. My gut just tells me something isn't right here. Also, he's trying to give us financial advice to make a huge mortgage payment (hence buy an expensive house) so that we'll see a good return on our tax return (interest write-off,etc) - and he's recommending twice as high as I want to pay.

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Mf,

As noted by my colleagues, this REALTOR could be legit, but if you're uncomfortable, pick another. If you use him, you'll always be second guessing yourself. You already don't agree with his financial advice, so why go further? If you're buying a builder home, you would have some concern of a potential conflict of interest. But again, I think you already answered your question for yourself. Find someone else you're 100% comfortable who will get you to your housing goals and your payment goals.
1 vote Thank Flag Link Thu Sep 23, 2010
Hi Mf,

That situation sounds a bit odd to me as well. If the agent is listing the home for the builder, then that agent is the Listing Agent, and if a buyer comes through an open house or calls without an agent and decides to put in an offer on the home, that agent would represent both the buyer and seller, thus becoming a Dual Agent, not solely representing you as a Buyer's Agent. If he is a Dual Agent, then he shouldn't be giving you advice as to what to offer per se since he is also working with the seller. Plus, you need an agent who is not going to show you properties that are out of your comfort price range because you are ultimately the one who will pay in the end if you aren't able to afford your payments later on and lose your home to a foreclosure.

If you don't want to have a realtor represent you solely as a Buyer's Agent, which is at no risk or cost to you unless you buy a home (and the commission comes out of the purchase proceeds anyway and split between the realtors), then I would suggest asking this agent to show you his Listing Agreement with the builder and see what it specifically says is his relationship to the builder. That is why we have contracts with both buyers and sellers, to make sure there are legal representations stated clearly as to who is representing who in a transaction.

Good luck with your home search and if you'd like assistance in viewing homes, I'd recommend finding an agent who can represent your sole interests and needs in buying a home. Feel free to contact me with any other questions in regards to this matter.

Angela Dolber
Prudential Prime Properties
508-826-8553
angela@pruprimehomes.com
Licensed in RI and MA
1 vote Thank Flag Link Thu Sep 23, 2010
Hi Mf. Don't walk.......RUN. Too many red flags, if you ask me. Always do what your gut feeling tells you to do, that's why women have 'women's intuition'.

There are so many great agents/REALTORS right here on Trulia that work Rhode Island for a living. Why not find one or two, contact them, speak with the on the phone, and see which one you feel comfortable enough with to hire and represent you?

As far as the situation you described above, even if you turned a blind eye to all of the dual agency problems involved with the builder, it's unforgivable to give a buyer BAD ADVICE about taking a huge mortgage to get a 'better write-off' on your tax return. What a bunch of B.S.

GOOD LUCK!

Scott Miller, Realty Associates, Boca Raton, FL
p.s.. make sure your real estate attorney reviews your purchase contract BEFORE you sign anything.
0 votes Thank Flag Link Sat Sep 25, 2010
If a real estate agent is trying to get you to spend more than you feel comfortable with, you know he is NOT looking out for you. More than likely, he is trying to get a bigger commission. There are plenty of agents out there. Find one that you are comfortable with.
0 votes Thank Flag Link Fri Sep 24, 2010
Here's the deal Mf, you can work with whomever you please.... trust is paramount, if you aren't feeling it, find yourself another agent.

Do not feel pressured, but do be mindful to procuring cause, if you see a home with an agent, she can argue the case for commission. For new construction, it is especially tricky - usually, unless you bring your agent with you on the first visit and "register" together, the relationship may not, likely will not, be honored.

Trust your instincts - it is the best 'trust" barameter you've got.... and best of luck to you!
Jeanne Feenick
Unwavering Commitment to Service
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Fri Sep 24, 2010
Hi all,
Thank you for your feedback, I appreciate it. At least I'm not way off base with my gut, and it's great to receive all this additional info.

Again, thanks.

Mf.
0 votes Thank Flag Link Thu Sep 23, 2010
Great advice you guys :) You might want to call the department of real estate in your area also...
0 votes Thank Flag Link Thu Sep 23, 2010
HI Mf,

Just wanted to clarify one thing that in my opinion may have been misstated in at least one of the posts below. If this agent showing the home is the listing agent for this property and he/she does not represent you currently, he/she cannot represent both the seller and the buyer in this transaction as a neutral dual facilitator("Dual Agent" ). The best he/she can currently do for you in the State of RI is act as your Neutral Transaction Faciliator if they are already under contract as the listing agent. They can act as your Designated Buyer Representative on other properties, but not this one if they are already the listing agent.
0 votes Thank Flag Link Thu Sep 23, 2010
Get your own agent!

No matter what happens, you will never feel right about it.

You need someone representing only you!

There may be many good reasons why your scenario is legit, as well as not legit!!! Why stress yourself out. Most Buyer Agents will get their payment from the Listing Agent.

There is no reason not to get one! Good Luck
0 votes Thank Flag Link Thu Sep 23, 2010
All of the responses given are correct. However, you need to go with your insticts. The realtor must provide you with an Agency form to discuss a particular proprty except at an open house. It is assumed that the agent and their office represents the seller. Best advise I can give is
0 votes Thank Flag Link Thu Sep 23, 2010
Based on the information you have given, I would not work with that agent. With the current condition of our market, he should not be trying to convince you to spend more than you are comfortable with. He should be looking out for your best interests and completely un-attached from any extra incentives being offer by the seller and particular properties. I feel that you are correct to feel that there is a conflict of interest.
0 votes Thank Flag Link Thu Sep 23, 2010
This could be a legitimate deal. The broker from this agent's office may appoint an agent to represent the seller while another agent from the same office may represent a buyer for the same property. The RI agency law changed last year to be sure that both the seller and the buyer may have good representation. You should sign a buyer's agreement with the agent. This will protect you and assure that the agent protects your interest.
0 votes Thank Flag Link Thu Sep 23, 2010
There are lots of questions to be answered, but what i follow in any situation is follow your gut first, if you don't feel right don't go forward, back up take a deep breath and take your time. Properties are not flying off the shelf these days.
All Realtors are required by law at first meeting to disclose in writing on who they represent and their is a form you would have been presented with if this was not done then beware.
Call me if i can help you further.
Good luck in whatever you decide to do.

Dan Liese RE/MAX Professionals 401-742-3216 cell dan@danliese.com
0 votes Thank Flag Link Thu Sep 23, 2010
You should have a buyers agent, short and sweet. You need to have someone SOLELY representing YOUR interests.

Odd situation.
0 votes Thank Flag Link Thu Sep 23, 2010
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