Home Buying in Oakland>Question Details

Scott, Home Buyer in San Francisco, CA

Is it a bad idea to make an offer through the listing agent on a REO?

Asked by Scott, San Francisco, CA Fri Jan 23, 2009

I am looking at an investment property, and was shown a house I like by the listing agent. I found the place online myself. What are the advantages to working with the listing agent on making an offer to the bank vs. finding another broker? I am really looking to get the best price, and I need to do it quickly.

Help the community by answering this question:


Hi Scott, there's a big difference between "best price" and "best advice." In the long run you get one by having the other!

A quick word on Dual-Agency: An Agent has certain Fiduciary duties to a client (A fiduciary duty is the highest standard of care possible). These can be boiled down to Loyalty, Obedience, Diligence, Disclosure, Accountability, and Confidentiality. Here's the problem: One Agent cannot provide full Disclosure and maintain full Confidentiality at the same time. To avoid this conflict of duties, a Dual-Agent may not place either client into a beneficial position over the other.

For example, a Dual-Agent can provide the asking price of a home but can’t provide advice as to its appropriateness. Similarly, a Dual-Agent performs a Comprehensive Market Analysis. The findings can be shared between the two parties, but not interpreted for either client. If we can agree that determining price is important, when does Dual-Agency make sense?

I want to make sure that I make myself completely clear -- I know there are stories of people not using Realtors to buy and everything turning out just fine. I’m not saying it isn’t possible, I’m just wondering how a Buyer would know if they were not served by the knowledge and experience brought to the table via their own Agent?

Food for thought...

Best, -Steve
0 votes Thank Flag Link Fri Jan 23, 2009

It is best to have your own buyers agent that can assist in negotiations. Working with the listing agent will give you no advantage. They legally represent the seller. It costs nothing extra.
0 votes Thank Flag Link Fri Jan 23, 2009
All of us replying are Realtors' so it seems we might have a biased interest. Bottom line, you really have nothing to gain by using the listing agent in the REO and possible could compromise what you take out of the deal.
If you were my brother, I'd suggest you choose your own Realtor. Negotiating...all the steps necessary to get you the best price for the property is the value of using your own Realtor.
0 votes Thank Flag Link Fri Jan 23, 2009
Hi Scott,

I agree with the other Realtor's statements - you want to work with a Realtor who has your best interest in mind. With that said, you mentioned you need to close the deal quickly. Are you in a 1031 exchange? Or just looking to place your money quickly? More than often, bank owned properties require you to get approved through their specified lender and also require a certain amount down. Typically this is stated in the confidential remarks that Realtors can see but sometimes it is not stated and you have to find the information out. And as mentioned previously, the lending aspect of the transaction is what is taking the longest and it's best to have all your ducks in a row. However, there are so many good deals out there right now. I would love to help you if you want your own representation. You can email me at ginaodom@gmail.com.
0 votes Thank Flag Link Fri Jan 23, 2009
There are a some things you should think about:

1. Even though you found it yourself, it was the listing agent who showed you the property. If you were to write an offer, and if your offer were accepted, that agent can claim that he is the procuring cause of the sale since it was he who had shown the property to you.

2. Most REO agents are so busy with multiple listings. A common complaint aomg buyers agents is that REO agents aren't as responsive to calls and requests for information. Sometimes, there may be multiple offers on an REO listing. So how much time can an REO agent devote to your offer, and represent your interests in a sea of listings and offers?

3. Yes, double-ending a listing is rewarding to the agent, and sometimes to both buyer and seller since the agent would have a lot of good information about the property and a possible reduced sales commission may also result in a reduced price. But in this case, the agent acts merely as a conduit, can research and clarify information, but cannot really favor one party over the other. So the negotiations are between the buyer and the seller without the agent aggressively representing either side.

My recommendation to you is to get yourself a good buyer's agent who can help you find the right property, who can make arrangements to show you any and all properties you or he can find that meet your requirements, who will negotiate on your behalf, and who will represent only YOUR interests when you are at the negotiating table.

Good luck.
0 votes Thank Flag Link Fri Jan 23, 2009

Hi. A common thought of buyers is if they go through the listing agent you will get a better deal and the reality is this is not usually the case. The listing agent’s job is to ensure they receive the most money for the property for sale in the shortest time possible. That is the job they have when they agreed to work with the seller. In addition I find that it can be difficult to truly represent a seller’s interest and a buyer’s interest on the same property. It is not illegal for a Real Estate Agent to represent a buyer and seller; I personally think that it is not in the best interest of either party.

When buying a bank owned property the seller is looking for a well qualified buyer who will be able to close quickly. You mentioned you are looking to buy this as an investment. Do you have your financing in order? Are you planning on buying all cash? To be honest in this current market the financing piece is what typically takes longer to complete. The lending guidelines seem to be changing frequently and it is taking longer for appraisals and funding to occur. So the financing piece of it will really affect how the bank will look at your offer and how long the process will take. If you have a 20-50% down payment or all cash, the bank selling the asset would definitely look at your offer competitively especially if another offer comes in that is FHA financing.

My suggestion would be you find a Realtor who is familiar with the REO process, but represents buyers. Having and advocate for you and your interests who will be looking out for your fiduciary interests in never a bad idea.

Hope this helps!

Take care,

Lisa Cartolano
Alain Pinel Realtors
0 votes Thank Flag Link Fri Jan 23, 2009
Depends on the agent. Do you trust the other agent to represent your needs? I have double ended many a deal so I cannot say it is bad. But generally ... and in this real estate climate ...I would say "get your own agent". You need someone on your side in a trusted fiduciary relationship. These REO's get long and sometimes complicated. There would be no benefit financially (unless the commission is less if the agent double ends ... find out ) for you so why not? Be represented.
Web Reference: http://www.katieoshea.com
0 votes Thank Flag Link Fri Jan 23, 2009
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