Debe

Buyer Agents have a positive impact on the outcome of a sale.

Good luck and success.

Lou Ludwig

Hi Debe,

wonderful presentation and outline of the benefits of using the services of real dedicated buyer agent professional..

Great post... Thanks for sharing...

Thanks, Lou!  I totally agree.

Peter and Linda:  Thanks so much!

Thanks, Stephanie.

Hope you all have a wonderful weekend...

Much for buyers to think about.

Glad you brought up liability for the sellers - many do not even think about that.

Buyer representation is so important.  At my fist meeting with some clients recently I explained to them that if they were to want to offer on one of my listings (none we looked at on first trip were mine) that I would refer them out to another agent... because I already have a relationship with my sellers. 

Hi Debe...we still allow limited dual agency here. I think Buyers that want to deal only with the listing agent feel the listing agent knows more about the property,not many here suggest they'll save although I'm sure there are Realtors offering discounts. I Agree a Buyer should have a impartial Agent working for their best interests and advice.

PS: how do you deal with your buyer agents with your listing.

Debe - Great advice to help buyers understand the importance of why they need the representation of a buyer's agent.

Virginia:  Exactly!  It's a real liability for both the sellers and the agent...not something I want in the middle of, nor do I advise it.

Tammy:  That's precisely what I mean--that relationship runs very deep with some listing agents also--especially those representing their family members and dear friends.  A buyer could NEVER know this--not a situation that I'd want to find myself in.

Fred:  Same here...we still allow it, although most of us disagree with it.  I think that someone is going to have to get called on the carpet one too many times before things are changed.  I recently interviewed a seller who purchased the home from the listing agent.  That agent was a NON-DISCLOSED relative of the seller and advised the first-time buyers that they didn't need an inspection.  When the buyers pressed him for one following a recommendation from one of their parents (who BTW, had also recommended that they go through the listing agent to 'save money'), he suggested an inspector for them.  Come to find out, the inspector was ALSO a friend of the family.  Needless to say, it wasn't pretty for the buyers, who wound up finding MANY hidden issues with the home that were going to cost them tens of thousands of dollars to repair.  They could not afford it and eventually wound up loosing the house to foreclosure.  SAD, sad story.  

I recommend that callers from internet and signs be shown the home by a different agent than the listing agent.  Referrals generally wind up purchasing another property but, at least they've been given their own representation.

Donna:  Thanks!  A recent horror story prompted this.  I just can't believe the lengths that people will go to for a 'discount!'  Most times that discount costs them more money in the long run, in both repair issues and negotiations.

So true, we repeat this often enough only to find that almighty greed (the effort to save a couple of bucks) leads to many overpaying and missing some important and costly details.

Good morning Debe,

In Texas we are not allowed to receive more commission for selling one of our firms listings (thank goodness..that is not a good thing.. a definite issue for legal difficulities). We do not have "Dual Agency" but we do practice "Intermediary". This is designed for agents in the same firm to particiapte in a single transaction because both hold their license with the same Broker. We can represent both parties under Intermediary but I will only represent both parties in a few situations. I get calls all the time as the listing agent wanting me to show them only my listings..the old story..they want to save money. I always advise them to get representation that they need an agent to watch over their best interests..I am not discounting the Brokerage fee I have already negotiated with the seller! I have heard many horror stories which I'm sure are similar to yours :).

Suggested. . another winner for you. Thank you for spreading your wealth of knowledge with all of us. . I had a meeting yesterday with my buyers agents and I wish I had read this before it.. .all good points

Debe, I refer the folks who call to one of my buyer agents. 

Case solved.

Not exactly...I have a unique home been on the market for 2 years, a buyer called me from my church and wanted to see it. They loved it, and I wrote the offer. 

I sat them BOTH DOWN TOGETHER, and explained dual agency in Michigan. 

I have kept the conversation totally open between both parties. 

So far so good, but glad I don't do this ALL the time, in fact the first time in many many years. 

Hi Missy,  I have had circumstances that it was okay to manage both sides and I did EXACTLY what you did...THEY actually negotiated as I moderated at the table!  It worked beautifully but, my terms were that both parties would ALWAYS be conferenced in on calls AND copied on every single email.  Seller liability is a huge issue and I just don't like putting them at risk--selling a home is difficult enough!!

Debe...as an exclusive buyer's agent of course I agree with you wholeheartedly.  It is amazing the misconceptions out there.  I explain to all my potential clients that the seller & the listing agent enter into a contract where the Seller agrees to pay the listing agent a certain percent when the home sells.  The listing agent decides how much he/she is offering to the buyers agent.  If there is no buyers agent, the listing agent keeps the entire thing.  There is no benefit to the buyer to go without an agent.

I agree 100%. I explain to my buyers who ask, why would you want to work directly with someone who has the sellers interest at heart?  Even in the same office some separation from seller and buyer is usually best.

Debe,

Dual agency is very difficult to do properly, and it results, if done properly in more work rather than less work,

I try to avoid it in all but very exceptional cases.

Brian

As you know, I only work with buyers as an exclusive buyers agent.  I have always wondered were the "loyalty" is when the sellers tell their listing agent everything . . . why they're moving, what their lowest price might be, etc.  Then along comes a "buyer" and all that loyalty is dumped and the listing agent wants to double dip and work both ends?!?  As a seller, I'd be ticked off.  It's a great topic and a well-written article Debe.  Thanks!

We promise, in writing, to "...exercise skill and care for the Buyer and to promote the best interests of the buyer with the utmost good faith, loyalty and fidelity...UNLESS acting as a Transaction Broker or Disclosed Dual Agent (Missouri only)..."  I, my broker, and my company do not practice Dual Agency even though it's still legal in MO.  The Transaction Broker designation, in Kansas City Greater Metropolitan Area Missouri and Kansas, means that the agent is "loyal to the transaction' and must conduct the transaction honestly but is not allowed to give advice or opinion. We discuss it up front and I explain the meaning of each Agency to them. Another agent would be called in to represent one of the parties in the event my Buyer Client decided to purchase one of my listings.I have known agents to accept to convert to Transaction Broker in this situation and be up late at night in the office agonizing over (they can't tell me exactly) the fact that they know something that would help one of the parties but they cannot say anything. For an ethical person, I think this would be a very difficult role.

Our brokerage uses Designated Agency so different Realtors in our office can represent a Buyer and a Seller in the same transaction. The agents at my office are very careful about not disclosing confidential information to other agents. We do take Client confidentiality seriously in our office.

Our company (and myself) does not believe in paying bonuses for selling our companies' listings. They believe the Buyer Clients should see any and all houses available. There is another company in town which practices thie Bonus payout and it does limit the Buyer. There is a huge team in the same company that, I've heard, encourages selling only their own teams' listings.

Hmmm, this comment is a little long but I so enjoyed hearing how things are done in Texas, Charlotte NC, and other parts of the country that I just chimed right in with how we do it here! ^_^ Thanks for another wonderfully stimulating post, Debe.

Great post.

In Texas we have Intermediary with & without apointments and I have a great diagram that was given to me in my KW training that helps to explain to the client what "Intermediary" means and how it effects them. ( My first class in RE school was Law of Agency & I remember how confusing "agency" was and we went over it for 2 days). I always adivise them that it is in their best interests to have an agent working for them whever they are from the same office as myself of from another office or company. The first eye opener for them is that it is going to save them time & possibly money not cost them money.

Debe, most buyers don't understand Agency. Buyers think they are automatically represented when speaking with an agent. It is important to educate buyers and sellers as to what Agency is and as it pertains to the laws in your particular State.

Debe..another excellent post.  We are totally onboard with your thoughts.

The idea of paying a bonus for selling within a firm is despicable and absolutely clouds an agents vision regarding steering to listings at that firm only.

Dual Agency is done here in California as well. For me, I have done it only twice and have handled them fairly. I do not share any confidences between parties, in fact, I tell my both clients, not to even tell me anything of a confidential nature. So that aspect does not bother me. It is the perception that sellers have that you are no longer 100% for them.  I prefer not to do them.

We often see buyers try to go direct to seller's agent thinking that they will be able to buy the property with low price and we often have buyers come directly to us when we represent sellers as well. We let the buyers know that we will work with them fairly but we are seller's agents contractually.

Debe:  Great post...I'm preparing a post on dual agency, too becuase in our market listings agents are getting many calls from buyers.  I see some benefit to a buyer in that the listing agent does know the property well....but the downside is the agent has made a pledge to the seller to obtain the highest price in the quickest period of time.  Buyers just don't understand the implications that fiduciary responsibility might have on them.

Debe, we are seeing a rise for some years of individuals who seek out the listing agent because they don't see the value in having their own representation and because they think they will save money. Last week I showed a friend's listing for her, and the husband kept leaving the house to take calls. I know he was talking to every other agent on the Island. Sad.

Besides the seller/listing agent relationship, a buyer who is represented by one agent will have continuity when they are seeing houses, they will have an agent looking out for new listings, or networking for ones not even on the market yet.

We have Transaction Brokerage for the most part here in Florida, so it is less complex for us to represent both sides, however we do not do it often. We have had a few transactions where if there had been two agents, the deal probably wouldn't have closed (difficult personality/ies). But those are the exception, not the rule.

Sharon