One of the most controversial topics in the real estate industry relates to one agent working with both the buyer and the seller in a transaction. This term is often referred to as dual agency. Dual agency in real estate can easily be defined as one real estate agent works with both the buyer and the seller. If you’re facing the decision whether to use the sellers real estate agent to buy a home, you need to first completely understand all the potential dangers of doing so
It’s also possible that dual agency is not legal in your area. Before you grapple with the decision whether to use the sellers real estate agent to buy a home, you need to find out if dual agency is legal. It’s pretty simple to find out if dual agency is legal in your state by performing an online search or by calling your local real estate board.
If dual agency is legal in your state, below you’ll learn about some extremely important information to help you decide whether to use the sellers real estate agent to buy a home. This important information includes;
The traditional types of real estate agents involved in a transaction and their responsibilities.The dangers to using the sellers real estate agent to buy a home.
Unless you’re an extremely savvy and experienced buyer, in most cases, using the sellers real estate agent is not suggested.
What Are The Traditional Types Of Real Estate Agents Involved In A Transaction?
There are normally two real estate agents involved in a real estate transaction. Below you’ll learn about the two types of real estate agents involved in a transaction and some of their duties to their respective parties.
Sellers Real Estate Agent
The sellers real estate agent, commonly referred to as a listing agent, is responsible for representing the homeowner in a traditional real estate transaction. The main goal of a sellers real estate agent is to help homeowners properly prepare their home for sale, accurately price their home for sale, and use quality real estate marketing strategies to get their home sold.
Below are some of the most important tasks and duties that a sellers real estate agent owes to a homeowner when selling their home.
Make suggestions on how to prepare a home for the market.Help price the home accurately using common real estate pricing methods such as a comparative market analysis.Aggressively market the home to provide maximum exposure.Coordinate private viewings of the property.Ensure prospective buyers are qualified.Negotiate to ensure the best terms are obtained.
Buyers Real Estate Agent
The buyers real estate agent, sometimes referred to as the selling agent, is the other piece to a traditional real estate transaction. The main goal of a buyers agent is to help a buyer obtain a suitable property that meets a buyers needs for the best possible price and terms.
Below are important tasks and duties that a buyers real estate agent owes to a buyer throughout the home buying process.
Help a buyer determine which type of mortgage is best for their situation.Explain the process of buying a home.Coordinate viewings of properties that match a buyers criteria and price range.Obtain the best terms and price.Assist in overcoming potential hurdles throughout the transaction such as various inspection issues.
Why Using The Sellers Real Estate Agent To Buy A Home Can Be Risky
Before deciding to move forward with using the sellers real estate agent to buy a home, it’s critical you understand why doing so can be risky. There are several reasons why using the sellers real estate agent is rarely recommended. Below you’ll learn about some of the reasons why hiring the sellers real estate agent to buy a home is dangerous.
Representation Is Lost When Using A Listing Agent To Buy A Home
Having representation when buying (or selling) a home is vital. There are tons of great reasons to hire a buyers real estate agent when buying a home, one of the most important is getting professional, undivided representation.
When you buy a home using the sellers real estate agent, you’re sacrificing undivided representation. Since the sellers real estate agent is representing the seller, it’s impossible for them to also provide full representation to you as the buyer.
This means that the many tasks and duties that are listed above that a buyers agent provides are sacrificed.
Concern Over Their Wallet
In most cases, the seller covers the cost of real estate commissions. In a traditional real estate transaction, the commission is shared between a buyers agent and a sellers agent. If you’re thinking about using the sellers real estate agent to buy a home, keep in mind, there is no buyers agent to share the commission with.
Money can make people do silly things in general and real estate is no different. Since the sellers real estate agent doesn’t have to share the real estate commissions with another agent, it’s feasible they’ll do anything they can do to make a deal.
How does this impact you as the buyer? Let’s assume that a property is slightly overpriced and the sellers real estate agent knows it is. As you’re trying to figure out how much to offer for a home, do you think they’ll tell you the property is overpriced and to submit a low offer?
It’s more likely they’ll tell you the property is priced well, in order to strike a deal. It’s not in any buyers best interest to be overpaying for a home. This frequently occurs when using the sellers real estate agent to buy a home because the sellers agent is more concerned about their own wallet than the buyers.
Conflict Of Interest
A sellers real estate agent has spent many hours working with a seller well before a buyer comes into the picture. Think about it, they’ve made suggestions to the seller to help prepare their home for sale, discussed their real estate pricing strategies, revealed the most common home selling mistakes, and talked about how they’re planning on marketing their home.
If a sellers real estate agent has spent countless hours working with a seller prior to you entering the equation, it’s nearly inconceivable that they’ll be able to provide the same level of interest to all parties. There are several scenarios throughout a real estate transaction where a conflict of interest can arise.
For example, most buyers elect to have a home inspection when buying a home and it’s a great idea. If you’re using the sellers real estate agent to buy a home and the inspection uncovers some issues, do you believe they’ll fully advocate on your behalf and push the seller to complete all the repair requests and possibly make the seller mad? Even though a sellers real estate agent may lose a deal with you, the buyer, they greatly reduce the risk of losing the listing.
This is only one example of conflict of interest that can occur when using the listing agent to buy a home. If you were getting a divorce, it would be silly for both parties involved to use the same attorney, wouldn’t it? It would create a clear conflict of interest and using the sellers real estate agent to buy a home often creates the same conflict.
Critical Details Deliberately Being Left Out
Leaving Out Critical Details Is A Potential Risk Of Using The Sellers Real Estate Agent To Buy A Home!
Real estate professionals are supposed to always be honest, ethical, and truthful to all parties. Unfortunately, there are a few agents that don’t conduct themselves in this fashion.
Full disclosure is always recommended in real estate. This goes for buyers and sellers, as well as real estate agents. Another reason it can be risky to use the sellers real estate agent when buying a home is the higher potential for critical details to be deliberately left out or not disclosed.
If a seller shares with their real estate agent that during heavy thaws the presence of water in the basement is possible, they should be disclosing this to any potential buyer. If an unrepresented buyer shows interest in the home and asks if the basement stays dry, do you believe the chances of the sellers real estate agent not disclosing that the seller mentioned that during heavy thaws there is a presence of water in the basement increases? You betcha!
Most agents are honest, ethical, and truthful, however, some agents will purposely leave out critical details if it means making a deal where they get the full real estate commissions. If you’re deciding whether to use the sellers real estate agent to buy a home or not, remember that the chance of critical details being left out improves in this scenario.
How Important Information Is Conveyed, Or Lack There Of
Throughout a traditional real estate transaction there is a ton of important information that is transferred between a buyer, a seller, and the real estate agents. When you use the sellers real estate agent to buy a home, it’s more likely information is either withheld or shared when it shouldn’t be.
If you’ve decided to buy a home through the listing agent and you’re submitting a low ball offer which is much lower than what you’re willing to pay for the home but mention what you’d be willing to pay to the listing agent, are you comfortable that information won’t be relayed to the seller? Personally, I’d be concerned that the sellers real estate agent will inform the seller what you’re actually willing to pay even though your initial offer is less.
When you use a sellers real estate agent to buy a home, you run the risk that important information is either not going to be communicated or won’t be accurate.
Final Thoughts
Using the sellers real estate agent can be risky business. It’s important before making the decision to use the sellers agent you understand the potential risks you open yourself up to.
Having your own representation is very important and in most situations is recommended. It can leave a very sour taste in your mouth if you find out after buying a home that you didn’t receive a fair shake from the listing agent.
It’s pretty common in states where dual agency is legal to see a large number of lawsuits from buyers who decided to use the sellers real estate agent to buy a home.
About the authors: The above article “Should I Use The Sellers Real Estate Agent To Buy A Home?” was provided by the Keith Hiscock