Foreclosure in 91401>Question Details

Lga658, Home Buyer in 91401

Would a listing agent stand to lose if a buyer's agent is involved?

Asked by Lga658, 91401 Thu Dec 29, 2011

In other words would a listing agent have reason to be upset if he was contacted initially directly regarding a listing by buyer and later the buyer hired his own buying agent?

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Dear Lga,

A property listed for sale will offer a commission to the listing agent if an acceptable offer to purchase results in a successfully closed escrow transaction. The commission is paid to the listing broker to be shared with a cooperating broker who submits an offer from a qualified buyer. The listing agent may have reason to believe that the commission should not be shared with another broker if he was the procuring cause for the sale of the property. There are many definitions to a procuring cause ruling that is typically argued between the brokers in an arbitration board.

If the listing broker introduced the buyer to the property before any other broker there could be grounds for a procuring cause ruling which would provide the entire commission earned by the listing broker and not shared with another broker. It really depends on the amount of effort and representation that was provided to the buyer in order to solidify the sale.

If the listing agent was lead to believe that the buyer was not working with another broker with anticipation that the buyer would be using their services in order to present an offer to the seller, would it be proper for another broker to step in and collect a commission? This is very often a question of ethics and fair business practice as the roles between buyer and seller representation is not always definitive.

I hope that helps a bit. It isn't always a simple matter.

Diane Wheatley, Broker
0 votes Thank Flag Link Sun Jan 1, 2012
Every sale involves 2 commissions. If the listing agent gets to write the offer they stand to earn them both. If you had involved conversations with the agent, they may have assumed you were intending on using them. By having interaction with the listing agent, you may have tipped them off to your level of interest, motivation and limits. You are better off having an excellent agent representing you and having them interact with the listing agent.
0 votes Thank Flag Link Fri Dec 30, 2011
Happy New Year
I would hope the listing agent would not be upset, their goal is to get the property sold for their seller. I have had many listings where the buyer called me directly and ended up seeing the house with their agent. I am thrilled they come see my listing and am always happy to be of any assistance I can. It is different if they call me and I show them the property and the buyer doesnt advise me that they have an agent (I always ask if they are represented).
Let me know if I can be of help to you in anyway.

Grace Mitnick
818.453.9154 office direct
818.516.7593 cell
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0 votes Thank Flag Link Thu Dec 29, 2011
Technically the agent could stand to loose that part of the commission. However, if the listing agent sells the sellers house (their client) at the end of the day I would think that should be the most important part.

I do not believe that agents can truly act as dual agents, meaning, I do not believe an agent can responsibly represent both a seller and the buyer in the same transaction.
0 votes Thank Flag Link Thu Dec 29, 2011
No because buyers venture to open houses and sometimes will not disclose information with the listing agent. Buyers prefer to talk to their own agents prior, to ask of their opinion and what steps should be taken next. I see no reason for the listing agent to be upset for this is very common.
0 votes Thank Flag Link Thu Dec 29, 2011
Of course he would be upset, he thought he was getting more business. But, as a buyer you have the right to use whomever you choose to represent you. It should not negatively affect the outcome.

Richard Schulman
#1 Buyer's Agent
Keller Williams LA Region
0 votes Thank Flag Link Thu Dec 29, 2011
The listing agent has the share the commission with a buyer's agent. This is normal. So what if the listing agent only receives half the commission because it has to be split with another agent. At least he's getting half the commission and you are being protected through a buyer's agent.

Good luck
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0 votes Thank Flag Link Thu Dec 29, 2011
The listing agent ends up with a smaller commission than if a buyer's agent hadn't been involved. But if the buyer's agent produced the buyer, then the buyer's agent deserves the commission. And if no buyer had been produced, then the listing agent would have ended up with nothing.

Most transactions involve both a listing agent and a buyer's agent . . . as is noted below. So, no, the listing agent isn't "losing."

You do run into an issue though if the listing agent was the cause of you viewing the property. A buyer should really start out with his/her own agent . . . rather than rely on listing agents' marketing and promotion efforts and only after identifying and viewing a property with the listing agent, then bringing in another agent. That's not the best form.

Still, half a loaf is generally better than no loaf.
0 votes Thank Flag Link Thu Dec 29, 2011
Don Tepper, Real Estate Pro in Burke, VA
Absolutely, Imagine loosing half of the total commission because he/she failed to nab that prospective buyer. Ouch! that would hurt. Ask me how I know?

Good Luck!
0 votes Thank Flag Link Thu Dec 29, 2011
Technically speaking, the listing agent shares his commission with the buyer's agent. But the listing agent didn't necessarily lose because the buyer's agent sold his listing. If the listing doesn't sell, no one makes money.

Realtors cooperate in this manner because we know that buyers agents help sell a listing by showing it to their clients. Working together to sell a house is in everyone's best interest. Sure, the listing agent can "double-end" the listing and represent both the buyer and the seller and not have to share his commission, but then the buyer's interests aren't really represented. In that case, no one would be negotiating on the buyer's behalf since the listing agent represents ONLY the seller's interests, and therefore wants the highest price for the house.

If you're selling a house, you could end up paying one or two agents a commission because each of those agents was instrumental in selling the property. The cost would be the same to you whether its one agent or two since they share. If you're buying a house, you don't pay a commission, unless you've got a contract with your buyer's agent where some kind of fee is agreed upon, but these are not the usual.
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0 votes Thank Flag Link Thu Dec 29, 2011
In all residential transactions, the commission is split between the listing agent and the buyer's agent.
If the listing agent also represents you, the buyer, they will earn both sides of the commission.
If you hire another agent, the listing agent will only earn half, so yes, if they showed you the property and you indicated you were not represented already, they will be upset, and also possibly legally entitled to a portion of the commission.
All that said, if this is a foreclosure, the listing agent already has a relationship with the bank they are representing. If you go with the listing agent to represent you as well, once you have settled on a fair price, they can ensure the transaction goes much smoother than another agent, because they know the process very well. Just make sure that you get them to run you comps and do what any good buyer's agent would so you know that you have gotten a great deal.
0 votes Thank Flag Link Thu Dec 29, 2011
Not at my state of IN the listing agent still gets compensated, and Im sure the listing agent would have loved to have you as his/her buyer as well but this happens more frequently than you'd think. The listing agent should have one goal in mind and that's to sell their client's home...if you are now working with a different buyer's agent and buy the house they have accomplished that goal and still made some money.
0 votes Thank Flag Link Thu Dec 29, 2011
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