Using the Listing Agent as Your Buyer’s Agent?

[Steve A]

What do you think about using the listing agent to help facilitate a buy?

For the last three months, I’ve been using a seller’s agent to make offers on a SFR.
But have been outbid on three houses.

For my next try, I’m thinking about using the listing agent. I see a couple of definite advantages:

1. Enables the total cost to be reduced by up to 3% (if the agent forgoes the buyer’s agent’s portion commission). Some agents are amenable to this, others aren’t. One guy I’ve talked with was very upfront about it. “If you have me represent you, I can lower the commission from 6% to 3% and the seller can drop the price by 3% and still net the same amount from the sale.â€

2. The other advantage is information sharing. “If you have me represent you, I can help you make the winning bid because I’ll know what the other bids are.â€

I understand that both “advantages†may have some ethical issues attached to them. But, putting that aside…

What are some of the disadvantages to having the listing agent (or someone from the same office) also represent me (the buyer)? I understand that conflict of interest makes this practice illegal in some states, but not in CA, where I’m located.

Are there some specific issues I should lookout for as a buyer?

Please, this isn’t meant to be an ethics lesson.

Thanks,

[Will Barnard]

I will chime in here as I have quite a bit of experience in this area.

What Jeffrey stated is spot on. I can't even count the number of times agents have pushed a buyer who they are representing to purchase house A rather than house B because their commission would be higher. If that is not a violation of ethics, nothing is!

At any rate, I somewhat disagree with what Richard stated, although I respect his opinion. He is right in that you need to be careful who you trust, however, countless times I have formed great relationships with top REO brokers (which is a necessity in the REO biz) and although they represent the banks as the sellers, there is somehwat of a non-personal attachment as banks are just big corporate entities and I am a real person in their office whom they like, whom they drink beers with, whom they joke and laugh with on occasion.

These relationships produce great deals. I get deals at lower prices then what others have offered at times. I get deals and know about deals before anyone else. I only get this if the brokers and agents are capable and williing to quote, unquote bend the rules.
Just make sure they bend the rules (as far as their rules are concerned) in your favor and not the banks. They still have to bring in a reasonable BPO price as it will be checked via the banks outside appraiser and they still have to perform the duties for the bank.
But having the listing broker dual represent gets them the ability to double dip the commissions (rarely will you find that they will represent both sides for only the 3% (and why should they, they take on double the liability!).

Moral of my long story, I believe that it is essential to make your offers (at least for REO's) through the listing broker and not through another buyer's agent.