Is it a bad idea to work with sellers agent as my buyers agent??

Question

Hey everyone,

So I found a great potential property for myself to BRRRR, possibly.  I don't know people in the area where the property is located and I was curious if it is generally a bad idea to work with the sellers agent? The property is REO, by the way. I just know I need to move very quickly on this to get it under contract so I am not sure how to go about finding another agent in the area if I shouldn't use the sellers agent.

Thanks for any advice you guys!

Chris Mason · Answer

IMO this 100% depends on your experience level. Once you have a half dozen recent deals under your belt, go for it. First timers, by contrast, should have an agent looking out for their interests because they simply don't know, what they don't know.

For example, local to me Oakland and Berkeley both have transfer taxes that can easily be up in the $10k range. Someone that's purchased/sold a bunch of Bay Area real estate knows who generally pays that closing cost. Someone relatively new, by contrast, would just see that $10k line-item labeled "tax" mixed in with all the other closing costs and think it's normal for them as the buyer to pay the full $10k. The listing agent (no matter what the disclosures say, and yes I know what they say) represents the seller's interests first and foremost (that relationship existed prior to you showing up, maybe it's a 6 month or 5 year long relationship), so why wouldn't they slip that into the contract, without comment, if they could do that for their seller?

Alex Deacon · Answer

@Brian H. Your agent would be considered a dual agent in this case. I see no issues with it. As long as you do your homework and the property is a solid investment. I am a licensed agent and I let other agents represent me all the time in dual agency because they will bring you the deals if they know you are a serious buyer. Let them make all the commission. it will pay off for you in the end if you start to do volume. Now with that being said if you dont like the agent or you distrust them then at that point you should consider getting your own representation. One thing I wont do is work with someone i dont trust or do not like. Good luck to you on this deal

Ryan Murdock · Answer

Seller pays so long as they meet the minimum amount specified in the buyer agreement. I have seen some foreclosures offered at 1%.

All of my buyer rep agreements state:

"....buyer agrees to pay, or cause to be paid, to Agency a commission of $xxx or xxx%....."

1% won't satisfy the agreement so the buyer would need to pony up the difference.

Also, since this is an REO and likely an out-of-state faceless seller I very much doubt there is any counseling or advocating on the part of the list agent. It's pretty much a robotic process nowadays. I bet @Brian H. would be better off going straight to the list agent as their overriding concern is probably getting both sides of the deal, not squeezing out top dollar for their seller. There are, of course, exceptions to everything but more than likely this is the case here.

Eric Weireter · Answer

@Chris Mason - Thanks for the mention!

@Brian H. - I just sent you a PM with my email and a couple recommendations in the Boone area.

Charlie MacPherson · Answer

I'll bet you can find someone here on BP.

Or, I could drive to NC, get licensed overnight and show you that property on Monday.  :-)

Brian H. · Answer

@Charlie MacPherson

That makes sense. Thanks! Now to find an agent on a Saturday night to show me a property on Monday morning! haha

Charlie MacPherson · Answer

The seller's agent is a FIDUCIARY of the seller.  That means that he is required by ethics and by law to represent the seller's best interest - not yours.  In fact, they are required to work AGAINST you.

A buyer's agent works as your fiduciary - negotiating on your behalf, pushing for the best possible deal for you, whether price or terms.  A buyer's agent knows what kinds of things they can push for too - contingencies, closing dates, repairs, etc.

In every jurisdiction I know of, the buyer's agent works for you for FREE.  The seller pays their fees.

Yes, you can work with the seller's agent as a "dual agent" if it is disclosed and agreed to by all parties (at least here in MA).

But do you really think you can count on a dual agent to push for the best deal for you?  Or are they pushing for the best deal for the seller?

The key question is this - how do you know?

Brian H. · Answer

@Chris Mason The property I am looking at is about 2.5 hours from him.

Chris Mason · Answer

@Eric Weireter is an agent out in NC, but not super local to you. He apparently said something that was insightful, because I wrote his name down. :P

My map says that Boone (you) and Durham (him) are pretty far away, but local neighborhood-level expertise is less important if you already have the property and price identified, and are about to go under contract.

Brian H. · Answer

@Cary Ogello  @Chris Mason

Thanks for that info. I really appreciate it. So, I don't know anyone in that area. I made a couple posts on BP looking to see if anyone on here could recommend anyone.  I need to move very quickly.  What about another realtor in the same agency? They are a highly praised agency.  Then the realtor I am working with no longer has the interest of the seller at heart.  Or is that still potentially a little sketchy?  Just trying to figure all this out haha I have been through the contract process a few times. I know there is no transfer fee or anything. I'm in NC and it is pretty straight forward and I know what I would pay at most for this property. Just want to make sure I don't screw myself in regards to my buyers agent.

Thanks again!!

Is it a bad idea to work with sellers agent as my buyers agent??

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