Asking RE Agent not to represent the Buyer?

Question

Hi BP - I wanted to throw this question and see if anyone has done this.

I am selling my investment property in CA, and I am meeting with an RE Agent tomorrow.

One thing I wanted to ask him was to include a contingency that he can only represent the seller (me), not both the buyer & seller.

The reason I want to do this is because I've heard of too many stories of significant time & money lost when the agent has incentives to get double commission (stalling the deal, going with a lower offer because it gets him double commission, etc).

Is this a reasonable contingency?

Bryan Reid · Answer

Yes, this is a perfectly reasonable request.  In fact, many (most?) state real estate boards will require at the minimum disclosure and likely all parties' signed consent before your agent could work for both buyer and seller in the same transaction.

That being said, dual agency happens all the time, too, and usually isn't too big a deal.  If you trust your agent, and they are a professional, they will be able to handle this.

You don't have to allow it if you don't want to, though.

Incidentally, if the Agent is working for a larger broker, there is a good possibility that if this situation does arise that the broker will designate a different agent to represent the buyer.  (In this case, the broker is still a dual agent, but your agent would still just be representing you.)

Mike Cumbie · Answer

Just to clarify about the "when I leave here" comment.

That is if I do NOT represent the seller and I am running another agents Open House for them. While I am in that house I represent the seller so I won't be saying anything that could in any way be seen as a negative. Now once I leave the house if someone wanted an agent to represent them (that house or others) then I would be good with it.

That's why I run an open for another agent, to get a buyer for it or somewhere else. But while hosting you are representing that seller and need to keep that in mind. I have called agents I work with and said "Yeah I have an offer from someone I picked up at the open house". That agent still represents their seller and now I have a buyer to represent.

Rebecca Belnap · Answer

@Rohan J. Sounds like you have already made up your mind and are looking for confirmation and how to do it.  I do like @Mike Cumbie comment because it brings up a new problem that you need to realize could happen.  Your realtor has an open house and the buyers have no representation.  The realtor has a choice of handing them to a different realtor, or saying "Now once I leave here at 3:00, I would be happy to meet with you and represent you if you are interested".

This is fine if your house is really not the home this buyer wants to buy.  If they do like your home, you have put your realtor in a difficult spot.  They advertised  the open house, found a buyer, but can't get paid for that work.

I'm not currently a realtor, but I used to be.  It's a harder career than they are given credit for, and the average income nationally is near the poverty line.  I still would advise not to tie their hands and instead go for a cancellation of the listing agreement clause if you see problems.

Good luck and I hope it sells quickly for over asking price.

Mike Cumbie · Answer

Hi @Rohan J.,

I would have zero problem agreeing to that stipulation. I am not a fan of dual agency and avoid it when I can. If I have a seller and a unrepresented buyer comes in it is very easy to say

"I represent the seller, I am happy to answer your questions or even write up a contract for you, however keep in mind I represent the seller in this transaction". "If you would like to have your own agent, I can recommend some good ones that I have worked with in the past". "Here is an agency relationship form, can I have you sign acknowledging that I do work for the seller".

It is pretty much the same conversation I have when in an Open House. Even not one I listed, in which case I get to add. "Now once I leave here at 3:00 I would be happy to meet with you and represent you if you are interested". "I know the listing agent and have worked with them in the past, they are fair and I am not worried about being able to strike an agreement that will make everyone happy"

There is nothing wrong with wanting your own representation and not wanting to share it. If an agent does not agree to being exclusively your agent, how can you agree to exclusively use them as an agent?

EDIT+++++Exclusive within the framework of that transaction, not exclusive as in not having other buyers and sellers for other properties++++

Good Luck!

Rebecca Belnap · Answer

I disagree.  If you don't trust your realtor to do a good job, don't hire him/her.  If they have the perfect buyer, they can't bring them.  You are creating a problem that doesn't exist yet.  Tell your prospective realtor about your concerns and see what they say.

Ben Leybovich · Answer

Just don't sign a dual agency.

Mindy Jensen · Answer

@Rohan J. , I would be in your same position.

I do not double-end deals. While it would be nice to not have to deal with another agent's schedule, there's just too much at stake. I think you are perfectly reasonable in your request.

Maria D'Aura · Answer

In California the RE must notify and get consent to represent both parties. If this situation were to happen you would need to sign C.A.R. Form AD to give consent.

Rohan J. · Answer

Thanks for the perspective, @Mike Cumbie . I really like this line of yours:"If an agent does not agree to being exclusively your agent, how can you agree to exclusively use them as an agent?"

Rohan J. · Answer

@Rebecca Belnap I see where you're coming from, but I disagree with the points you made. Of course I "trust" my RE agent, but what does that really mean? We haven't known each other for a very long time, and we haven't ever done business together - I certainly have no idea what is going on inside of his head. People can quickly change their behavior when large amounts of money are on the line.RE transactions are huge, and building a rapport to truly trust someone would take a very long time - I'd much rather be upfront about my expectations and, if within reason, add a contingency.

Asking RE Agent not to represent the Buyer?

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