If you’re like most home buyers, there’s an 87% chance that you started looking for a home on the web, according the National Association of Realtors® (NAR). And according to the National Association of My Personal Experience, there’s a high probability that you’re working with multiple real estate agents. Most home buyers don’t realize that every Realtor® who is a member of the WPMLS has access to all the homes for sale in Westchester County and even Putnam and Bronx County.
As a home buyer myself, I realized that the main reason buyers hop from Realtor® to Realtor® is trust . The agent you’re working with, and it might be me, has not given you a sense of comfort that would have you commit to that one agent. And understandably so! You just met the person once or twice.
Chances are that you’re looking around for a home on Realtor.com, Remax.com, or every agent’s personal favorite Zillow–more on this on another post. You find a home you like, and give a call to the first agent that shows up on the right-hand column of that specific page to setup an appointment. The problem with that is that you were trying to get in touch with the listing agent of that property. However, you just managed to contact a random agent and not the listing agent. You didn’t know that most of the time any agent can buy advertising on that right-hand column, or any other area for that matter, on that web page. So finding the listing agent of that specific property is sometimes more difficult than finding a home. In the Westchester County we agents practice something called reciprocity. Meaning, we could show and sell each others listings. In fact, it’s one of the core mechanisms that drives this industry.
The real question to buyers is why do home buyers want to contact the listing agent directly? Here are a few ideas buyers have shared with me in the past:
- I can get a better deal by negotiating with the listing agent.
- The listing agent will have “insider” information about the seller or the house that no one else does.
- It is easier to negotiate with the listing agent–no middleman.
My response is always the same to buyers: If the listing agent is representing the seller, how are you going to get a better deal? Who’s going to tell you that the home is overpriced, and it’s not worth the asking price? Who’s going to advise you on attorney, mortgage banker, and home inspector–the seller’s agent? Are you likely to get sound advice from the same agent who has doubled their interest in selling the home because they get the entire commission instead of half? Let me know when any of this makes sense you to you.
Think about it. The listing agent represents the seller and her best interests. Who’s guarding you, the buyer, and your best interests?
Please note that in the State of New York, it is completely legal to represent both the seller and the buyer in the same transaction–as long as both parties consent to the arrangement. If both parties agree to engage in dual representation, then the agent has to provide both parties with the same level of loyalty (fiduciary duty). Do you see where this could be a problem?
Personally, I’ve never represented both the buyer and the seller in the same transaction. Perhaps I’m one of those people with a conscious or maybe I’m just stupid for forfeiting all that money. The bottom line is that if the agent has access to the Multiple Listing Service (MLS), he/she can show and sell you any home because of reciprocity. Long gone are the days of “pocket listings”. There’s absolutely no benefit to keeping a listing to yourself (unless the agent wants to buy the home themselves). There’s overe 7500 other agents out there in Westchester with a possible buyer for that listing. Why not take advantage!
Therefore, if you’re a buyer find yourself a good, full-time, responsible, and knowledgeable real estate agent to work with. And stick with him (I mean me) until the end. On the other hand, you may get some scrupulous real estate agent that just wants the commission and encourages the seller to sell the house for less than what it’s worth. When it’s time for you to sell, will you plan to use the same agent?
Whether it’s a $100,000 Co-Op or $2mm home, buying a home is a huge endeavor. Wouldn’t you want someone who has your best interest in mind to go to bat for you? Look at it this way: if you were in a trial and facing life in prison, would you hire the same attorney the accuser hired?
NYS advice on Dual Agency “Be Wary of Dual Agency“
{ 2 comments… read them below or add one }
Yes Sir…Realtor.com makes most of their money by selling ad space on their property pages. Realtors can purchase displays by area or zip codes. When someone looks up homes in a certain zip code, that agent shows up next to all the listings–regardless if they’re the listing agent or not (in most cases not). This showcases the agent as the local expert. these headers and sidebars are prime real estate (no pun intended) on Realtor.com and other real estate websites.
Great article as usual. That analogy really summed up the argument and I guarantee folks are going to view working with the listing agent very differently now.
I never realized that any agent can purchase the slot near a given listing. Learn something new everyday. Thanks again.
Eddy