Question Details

In the Market, Home Buyer in California

Can I trust my realtor to properly represent me if they are also listing the home?

Asked by In the Market, California Wed Feb 18, 2009

My realtor is the listing agent for a few of the homes that I am interested in. In this market, I would like to negotiate a fair price, but my realtor keeps disagreeing with me. It seems that they have the sellers best interests and not mine. I often feel over sold for these properties. At the end of summer the realtor suggested that prices would get any better and I only had a small window before interest rates went up. Now, with the falling prices, they are saying that the owners will most likely rent before they drop the price any further. I have looked at a market analysis of similar homes and these prices are certainly above the current market value. Do I need to switch realtors? How do I get my realtor to advocate for me?

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BEST ANSWER
It is possible as a Dual agent to be "fair" to both sides.

But that's not what the seller hired me for... he hired me to be an advocate for his concerns, and get him the highest price, with the best terms possible, for his property.

The buyer, has also hired me to be a bulldog for his interests, and get him the lowest price, with the terms most advantageous for HIM.

Those are mutually exclusive, and I can't possibly do both... but I can be "FAIR" to both sides... but that means I can no longer truly advocate for either side. I'm effectively neutralized into, what I like to call, "therapeutic real estate". The buyer asks me "what should I offer", and I answer like a therapist "I don't know... what do YOU think we should offer?"

Or an inspection issue arises, and the buyer asks "What should we do... should we walk away... ask for a repair... ask for a credit?" to which I can only respond... "I don't know... what do YOU think we should do?".

When the buyers request a $10,000 credit for the cracked foundation... the seller asks me "Should we pay it???... should we negotiate the amount.... should we tell them to go to hell??? All I can respond is, "what do YOU think we should do.

You've effectively neutered your advocate. Not what you had in mind when you hired your agent. Fair & neutral, but not what you're paying me the big bucks for.
5 votes Thank Flag Link Wed Feb 18, 2009
Alan May, Real Estate Pro in Evanston, IL
MVP'08
Contact
Yes you need to switch agents. Your agent won't write an offer up for you?

Are you being unreasonable with regard to price?

The bottom line is you are ready to make an offer and your agent isn't, find an agent that can communicate effectively with you.
2 votes Thank Flag Link Wed Feb 18, 2009
Many agents will "double end" a transaction, but it's a tightrope and seldom in the best interests of both buyers and sellers. As you've been told by others, your best interests will almost always be served by an agent representing only your side.
1 vote Thank Flag Link Sat Feb 21, 2009
If the agent has the home listed, that agent represents the seller. You are unrepresented; the listing agent has no fiduciary duties to you. The listing agent can become a transaction broker, or in some states a dual agent. In that case, the agent is obligated to conduct the transaction but not advise either party.

As far as you "switching realtors" - you do not have a realtor. Find one; sign an Exclusive Buyers Agency, then look for homes.
Web Reference: http://www.MariaMorton.com
1 vote Thank Flag Link Wed Feb 18, 2009
I think you have your answer, but I'll chime in.... Get an agent that will represent your best interests. The listing agent already agreed to work for the seller to obtain the best possible price. How can that same agent work for a buyer to obtain them the best possible price? Dual agency is legal, but it's not possible to represent both parties interests in my opinion. It doesn't mean the listing agent isn't being fair or ethical, it just means it creates a very complicated conflict of interest and you may be better off finding an agent that will work for you. Don't worry about the commission, because sellers pay and if your agent is good, they commission they get will be earned by their negotiation skills and in the long run, you will save more money. Most people think they will get a better deal if they don't use an agent, but unfortunately, I have found they actually do a lot worse. A knowledgeable agent that is professional and knows how to negotiate can do much better than you.. think about it, we do it all day every day many times a year... a buyer does it once every 4-5 years at best. Get a good agent. As I always say, "if you don't trust your agent, get a new one." Trust is huge when it comes to agent/client relationship. At the end of the day, it's your money and you choose. Good luck.
Web Reference: http://www.davidwbrower.com
1 vote Thank Flag Link Wed Feb 18, 2009
In Georgia this is called Duel Agency - It is where you have entered into a WRITTEN Agreement to represent the Seller (Listing Agreement) and you have entered into a WRITTEN Agreement with the Buyer (An Exclusive Buyer's Agreement). My Company does not offer Duel Agency - we offer Designated Agency. In your case - since it was the Company Listing - another agent within the office would be "designated" to either represent you or the seller. At that point to confidential information is shared. I don't offer Duel Agency because if I represent you....I am striving to negotiate you the best price and conditions. If I am representing the Seller I am striving to get him the highest price and best conditions......you can't serve two masters....at this point can he recommend to you to offer less???? He better not have my listing!
Max Allen
TRI-Group Realty, L.L.C.
Web Reference: http://trigrouprealty.com
1 vote Thank Flag Link Wed Feb 18, 2009
As Roger notes, it's very difficult for a Realtor to represent both a buyer and seller. It is legal, and it is acceptable if disclosure is made to all parties. Nevertheless, it's very difficult.

Further, while I am not in any way attempting to interfere with your relationship with your Realtor, I am concerned by a few things you say. For example, I don't know what you consider a "fair price" and your Realtor may be disagreeing because he/she thinks the number you're proposing is unrealistic. However...big however here...you're the client. If a house is priced at $200,000 and you want to offer $125,000 (especially if the pricing of the house was done by your Realtor), although you'll meet with some resistance, you're the client. Offer $125,000. It's your money. It's your offer. And I'll bet the numbers weren't as extreme as in my example.

Next, while no one has a crystal ball, any agent who suggested last summer that prices would go up was, umm, err, expressing irrational exhuberance. It was clear that foreclosures would continue as mortgage rates continued to reset. It was clear we were heading into a recession that would depress prices further. It was clear that in most areas the "buying season" is springtime, not winter.

Similarly, while no one had a crystal ball, a prediction of rates rising was unusual. Check my past posts. Check others. With demand dropping, interest rates weren't going to rise. With the lack of inflation, rates weren't going to rise. With the Fed radically lowering the prime rate, interest rates weren't going to rise. Again, I don't know the reason your agent was making these predictions. But clearly they were off target. And remember: Past performance IS a good predictor of future performance.

Will owners most likely rent before they drop the prices any further? Not necessarily. It all depends on the circumstances and motivations of the owners. I know plenty of sellers--they have a lot of equity in their properties and they want to sell--who won't mind lowering their prices further. I also know plenty of sellers without much equity who won't consider renting because the negative cash flow would kill them. I know other sellers who just don't want to be landlords. Besides, you never know until you make an offer.

I'd suggest you have a good heart-to-heart talk with your Realtor. If he/she is able to satisfactorily resolve all your concerns--and if you're willing to discount the past poor predictions--then stay with him/her. Otherwise, you might consider looking for someone else.

Hope that helps.
1 vote Thank Flag Link Wed Feb 18, 2009
Don Tepper, Real Estate Pro in Burke, VA
MVP'08
Contact
It is very difficult for an agent to fairly represent both the buyer and the seller at the same time. I can be done, if the agent is truly honest in representing both sides, however, it is tempting for greed to prevail in this situation. It sounds like you are not comfortable, so you may want to consider hiring an exclusive buyers agent to help you. In case you don't know, the listing agent stands to make twice as much commission on the sale when he or she represents both sides.

Roger Berrey, Broker / Realtor
Wilkinson & Associates Real Estate
Charlotte, NC
888-979-9970
1 vote Thank Flag Link Wed Feb 18, 2009
In the State of California, every agent is required to complete a disclosure with their client called an "Agency Relationship Disclosure". The verbiage states that we as Realtors have a fidiciary duty to act in good faith, be honest and fair in all dealings, and to disclose anything known to us that would affect the desirability of the property. This disclosure is required in all 3 representations: Buyer exclusively, Seller exclusively, and Dual Representations of both Buyer and Seller. So in answer to your question, YES! In a perfect scenario you should expect that from your agent; however, it is your responsibility to select your agent carefully as you would any other professional. You should interview them, make sure that their license is in good standing with no restrictions or other negative strikes, and last but not least, CHECK REFERENCES OF PAST CLIENTS. Just because an agent has been licensed for 20 years doesn't mean that they have ever sold a house before. There is a pro and con with a dual agency. The pro is that you are very likely to get your offer accepted because the agent will be vested in the acceptance of your offer, but the con is that whenever an agent takes a listing (contract with a Seller to sell their home), they are promising that Seller that they will be committed to getting them the BEST AND HIGHEST price for their home. A dual agency can become very challenging in keeping in line with that original promise to a seller, so realize that depending on the relationship that the dual agent has with the Seller (family ties, neighbor, long time friend, past client, co-worker, fellow church member, etc) they may be fully indebted to look out for that Sellers bottom-line; afterall, there is no contract between the dual agent and the buyer stating that the agent must get the buyer the best and lowest price! I hope this informaiton helps....good luck to you!
Jamie Durity
Century 21 Astro
562-843-1843
Top 1% Agents in the WORLD!
Centurion Award Winner and Diamond Club Member
Web Reference: http://www.jamiedurity.com
1 vote Thank Flag Link Wed Feb 18, 2009
It is a slippery slope, what you are referring to is called "Dual Agency". The Realtor still has fiduciary duties to you on both sides of the fence. In many practices this is not allow, take our legal system, a lawyer can defend and prosecute. Really comes down to the Realtor and your level of trust.
0 votes Thank Flag Link Sat Jul 31, 2010
Dear Market,
You have nothing to lose, and everything to gain in retaining a good buyer agent. Our job is to assist you in your negotiations and to represent you. One of the best parts of it is ....you do not pay us for our services, but we are paid by the seller, at the end of escrow an amount previously agreed to between the seller and the listing agent.
0 votes Thank Flag Link Sun Mar 29, 2009
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