Question on broker acting as an intermediary

[Hugh Le]

After reading an exclusive representation agreement, it appears that a broker will act as an intermediary. Based on my research of Texas law, it appears that the intermediary could theoretically represent both parties (listing agent on seller side, and then act as an immediary to represent the buyer side).  This could theoretically create a conflict of interest.  Let me know if I'm missing anything. Thanks so much for any insights.

[Bruce Lynn]

Sounds daunting when you're reading the buyer's rep agreement, but after doing this for about 20 years, don't over think it.  It is pretty rare in my experience that it happens and you always have a choice.  I'm sure there are instances of collusion, but I would guess it is rare.  Take @Neil Narayan example where in Austin one KW office may have 1000 agents....so you could run into intermediary.  Chances are most of those agents don't know each other, may never have met, don't work together, etc--but they do work under the same brokerage license, so in many ways maybe not all that different than when there are two different brokerages involved.

You might also read through the Information About Brokerages Disclosure which outlines in intermediary what we can't do.  For example if you are my buyer and tell me your max bid is $200K, but you want to offer $190, I can't tell the other agent that.  Normally I never ask any buyer what their max is....doesn't matter to me...if we are in intermediary or not....just tell me what you want to bid.  We'll show you the same comps that the seller also had access to and the appraiser will have access to.

Believe me on the first house I bought, I was all over this and very concerned about it.  I wanted a 100% buyer's agent and for the most part that doesn't really exist.  I was over thinking it.   Now that I am in the business I think if you have good/great representation it doesn't matter.  If in the odd chance you want to buy a house listed either by me, or someone else in my brokerage great, but if you want to exclude those, not a big deal either, your choice.

The broker compensation is for the most part set in the listing agreement, so depends on what the listing agent and the seller have agreed to do.  It is addressed in the buyer rep too, but to me much less of a concern and a concern to you.   Discuss it with your agent.  Let's say you agree to pay your buyers agent X%, but the listing agent is offering less than that.  You want to know what your agent will do....are they looking to you for the balance to get back to X% you agreed to pay.   This might be common if you want to look at FSBOs.  Since there might not be any agreement for compensation, your agent may be looking for you to pay it.