When to call the listing agent...and when NOT

[Ryan Howell]

I want to give some perspective on this topic.  I think I have a unique perspective, because I started out as an investor, then became an agent.  Since a large portion of my business is working with investors, I either have them calling me as the listing agent OR I'm helping them as the buyer's agent.  

My first property was bought with a buyer's agent working for me.  I wasn't impressed with the service I got and decided from then on, rather than finding a good agent, I would put in offers direct to the listing agent, the offer would be lower than others, but they would make more commission and improve my odds, right?  Not always.  After getting licensed, my perspective changed.

First of all, we need to understand how dual agency works.  I am not an attorney, but will give a simplified overview.  I only understand North Carolina, so other states are likely different.  In NC, being a dual agent means you cannot advise either party when it comes to what to offer or what to accept/counter due to conflict of interest.  You become more of a "referee".  That said, there is obviously WAY more opportunity for you to potentially upset a client, especially when dealing with an investment type property, hence more liability on the agent to tread very lightly and watch ever word that is said, as there is a level of obligation to both parties.  

So if you have a GOOD buyer's agent, they will advise you on how to make an offer (we'll come back to what "GOOD" is) and structure it to get accepted.  If you are working with the listing agent, you are completely on your own with no guidance.  Assuming you're getting good advice from a buyer's agent, this will improve your odds of getting the deal under contract.  Unless you are a seasoned investor with equivalent experience making offers in your market, you may be at a disadvantage going it alone.

So does the extra commission make up for that disadvantage?  Not always.  A dual agent is risking more liability in the deal and these are often (not always) deals at below the median price point in the area.  Unless they are a struggling agent with no concern for liability (yes there are some), this likely isn't going to make much difference to them...When I used to call the listing agent with an offer, I would notice the agents would get frustrated with me...I'd offer a number they knew wouldn't be accepted, but they couldn't tell me or advise me, which resulted in them drawing up paperwork and wasting their time.  I also lost credibility as an investor.

Now, if you are a seasoned investor with a lot of experience in your market or buying off-market, the value of the agent will diminish and it may very well make sense to go it alone. If you are trying to buy your first couple properties off the MLS and just getting started, I believe you should find a professional and investor-minded agent (preferably someone who is also an investor). The best place is a local REIA or BP. I do believe the right agent can be a great asset, especially starting out.