Home Buying in 53221>Question Details

Jon, Home Buyer in Milwaukee County, WI

Thank you for your replies, much appreciated. We were under the impression that if we had a Realtor showing us homes that they in turn received a fee.

Asked by Jon, Milwaukee County, WI Wed Jan 12, 2011

If we find a home, you are stating we will need Agent, Realtor for representation. What if the home we buy is one that they themselves(Realtors) are selling, that seems to compromise the whole transaction as they would be wanting to get the best possible sale price where the buyer also wants his/her needs met?

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This is somewhat true, but there is more to it. The agent listing the property also has the inside track with the seller and, therefore, knows ALL the elements that may be important to a seller. Price does matter, but it's not the only thing. If you just want an agent that fights "tooth and nail" to get you the best price, a buyer's agent might do that. However, the alienation that it may cause with the seller might actually end up costing you more. Good negotiations do not necessarily pit a seller's agent against a buyer's agent or a buyer against a seller.
1 vote Thank Flag Link Wed Jan 12, 2011
In most cases the most prudent thing a buyer can do is to have his/her own agent representing them from contract to close. The buyers agent is now your advocate and educator representing only you.
0 votes Thank Flag Link Sat Aug 6, 2011
Dear Bernadette,

I would be very weary of some of the previous advice given.

David you said, "An experienced agent can lead you away from potentially bad hoods....." In the State of Wisconsin if an agent were to even hint at doing that, they could be brought up on charges of steering, just to name one. This is totally illegal.

The only thing good that I saw in your post was referring Bernadette to an attorney. There are some who feel they need that type of representation and there is absolutely nothing wrong with that. There is a way for an attorney and a real estate agent to work together in the best interest of the buyer. I have only had two clients that warned me that their attorney would be looking over my paperwork and I had no problem with that. The end result in both instances was a fantastic compliment from both attorneys on my contracts.
Web Reference: http://www.lindacefalu.com
0 votes Thank Flag Link Wed Jan 12, 2011
The truth of the matter is your not being represented at all in a dual relationship where Realtor is selling agent and listing agent. The Agent that sells you a property that he or she has listed has a responsibility to represent the sellers interest in the sale of the property they list. If your buying a property the best bet is to have a legal professional represent your interests in the purchase. Its ok to use a licensed professional, real estate agent for buying and selling side of the sale how ever be aware the an agent may have an interest in selling you property since they get a commission only if they sell to you. To really protect your interests in a transaction you should have a budget of an extra 300 to 500 set aside and let an attorney review documents and maybe have a 15 minute phone conversation to the matter before writing offers on property. The attorney will be in your corner and can warn you of problems that can happen in any transaction or as they arise. You use agents mainly to access Multiple listing service and hope that they can lead you in the right direction. Make sure when you interview an agent get a pro that has been at it at least a decade that sells enough real estate per year that they are easily able to make you aware of any situations you need to know about. An experienced agent can lead you away from potentially bad hoods or problems with zoning and parking or just things that are planned by the city to happen in the near future you may not know about. In addition the right agent can help you find better deals in this down market. As an investor I have found some times there can be a distinct advantage using agents that deal mainly in foreclosures. I have used this strategy to buy property even newer construction for about 20 to 65% of appraised value. The newer constructed homes in better hoods usually the discount is less since the bank can wait for a better price. In today's market don't pay more then 70% of the value unless you have to have that property. Even though the market has most likely bottomed out there is still and over stock of homes on the market. Fees are only paid when you buy a property and they are almost always paid by the seller that had a listing contract with an agent that marketed the property for sale. Its free to look at property and most good agents have no problem running you though homes. When you get ready to sit down with an agent in an office to look at a list of homes for sale have a list of needs in place, like location or number of bedrooms and baths and size of garage ect.. for agent to help them narrow your search quickly. I like to think you put your needs in the priority of importance so that your most important needs are met first in a property search. Also there is no need to sign an agreement for an agent to represent you. Remember an ounce of prevention = a pound of cure.. In other words after you contract to buy a property its too late to back out so don't forget to use an attorney unless of course your a pro at real estate and contract law. If you do decide to have a buyer agent represent you then make sure that they don't steer you away from potential good deals because of the commission split on a deal.
I am an investor have been purchasing and selling commercial and residential property for 20 years. I have bought over 180 land properties and over 50 homes and apt buildings in the last 10 years in 6 states. I also have CCIM designation and joke about this to poeple that I have coffee 3 times a week with an attorney and a licensed Real Estate broker whom is also my partner. I am how ever not an active agent in this state. currently.
0 votes Thank Flag Link Wed Jan 12, 2011

I have removed my previous answer so as not to confuse the issue any more than it is. I think that Jeff Gramins has given you the most precise answer regarding agency.

If a home is offered on MLS, the listing agent is required to pay a co-broke if another agent brings in the buyer which comes out of the original listing commission. If the listing agent is also representing the buyer, then that listing agent will collect the entire commission from the seller unless other arrangements have been made in writing.

The last part of your question is an honest one. The listing agent has a contract with the seller and cannot share market information with you as someone here as already stated. So......if you have your own agent, you can ask them to do a market analysis for you and if they can then tell you if the asking price supports your offer unless it supports the selling price.

I hope this helps.
Web Reference: http://www.lindacefalu.com
0 votes Thank Flag Link Wed Jan 12, 2011
May be easiest to sit down over a cup of coffee and take the time to answer all your questions with no obligation.

Contact me if this is of interest to you!
0 votes Thank Flag Link Wed Jan 12, 2011
If you use the listing agent to write the offer, it would not be dual agency unless you have a written buyers agency contract with that particular agent. Since the agent already has a contract to represent the seller, this situation is unlikely. So, using the listing agent in this case you would be working with the seller's agent and that agent would not be "yours".

In the case of dual agency, there would essentially be no representation on either side as the agent's proper role becomes that of a messenger rather than an advisor. You cannot ethically (or legally) represent (give advice to) both sides of a transaction. Would you use the same attorney as the person filing suit on you?

If you want true representation of your interests, you need to hire an agent who is not the lister. This agent can be from any company including the company listing the property (which would create a situation called "designated agency".

The only way in which the listing agent would be "your" agent would be that he or she would write the offer per your direction and collect the buying side of the commission as well as the selling side. The listing agent cannot provide you negotiation advice or interpret the market for you.

This stuff is sometimes hard to explain via a website like this. What is best is to sit down with a knoweldgable agent and have him or her explain the contracts to you section by section (line by line would put you to sleep!).
0 votes Thank Flag Link Wed Jan 12, 2011
What you are describing is referred to as Dual Agency in NC. The listing agent represents the seller and also the buyer. Years ago this was the primary option for most buyers as listing agents often sold their own listings. Some buyers feel more comfortable with their own Buyer Agent. In fact a Dual Agent is ethically obligated to protect both the seller and buyer in a Dual Agency transaction. The agent must not reveal any information to one party that might hurt the other. Their role becomes one of facilitator bringing both sides to an agreement which satisfies both parties. Some buyers prefer to work with the listing agent as they feel the list agent knows more about the property and is motivated to make the transaction work for both buyer and seller.
0 votes Thank Flag Link Wed Jan 12, 2011

If you run into the situation you described, the Realtor in question would have to disclose to you that they would be acting as a Transaction Broker. You would have to agree to allow the Realtor to represent both sides of the Transaction or you could choose another Realtor to represent just your interest. Some Buyers feel as if they will get a better price if allowing the Realtor to represent both sides, because they will be earning a commission on both the transaction sides; and if the Realtor is making more money on the commission, they will be more willing to reduce the sales price to offset the potential gains. However, other Buyers feel that they would like to have someone review the market, assess the potential home and give guidance as to what an offer should be. Typically, the Realtor with the listing will want to refer you to another agent within the office so that there is still the commissions coming into the Brokerage. As Realtors we have an ethcial standard that allows you to be represented in the manner in which you feel most comfortable. You should go with your gut in a situation like this, as your comfort and the feeling of security in how the transaction is being handled is a key aspect in the overall success of the Buying process.

Bests of luck.

Corey Buck Mann
Buck & Buck Inc., REALTORS
0 votes Thank Flag Link Wed Jan 12, 2011
A REALTOR will receive a fee, but it won't usually come out of the buyers' pocket. It usually comes from the proceeds paid to the seller. There are some exceptions to this, but they are very few and far between.

You do not "need" a REALTOR to represent you in a transaction, but it is highly recommended that you have one. An agent representing you can help with many things, including spotting potential issues with the house you want to buy, determining a value for the house and also helping you through the home inspection.

If you choose to work with the agent who is selling the house then you are working with the person representing the interests of the seller. That agent is obligated to their job professionally and tell you the truth, but they are also obligated to present the house in the best possible light and to get the highest amount possible for the seller (as well as write an offer that benefits the seller in other ways).

If you feel confident in your home-buying and negotiation abilities then you can go ahead and work with the listing agent. However, since a buyers agent works for you and it doesn't cost you anything, why not hire one?

If you don't have anyone in mind, I'd be happy to apply for the job!

I wsh you luck!

0 votes Thank Flag Link Wed Jan 12, 2011
Yes, Bernadette,

It would be in your best interest to have an agent who represent you as the buyer.
Web Reference: http://www.lindacefalu.com
0 votes Thank Flag Link Wed Jan 12, 2011
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