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Old 02-27-2009, 10:10 PM
 
2 posts, read 2,419 times
Reputation: 10
Default Buying from Dual Agent

I found a house that is a pre-foreclosure, and the agent represents both the seller and me (disclosed dual agent). The agent tells me that negotiating on the price is no longer possible, since the bank has already declined a previous offer from a person who has now backed out.

So how do I know the selling price that the agent told me is legitimate, when there is no written proof for what the bank is asking for?
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Old 02-27-2009, 10:49 PM
 
Location: Northern NJ
3,012 posts, read 2,724,379 times
Reputation: 2880
Quote:
Originally Posted by 1sthomebuyer View Post
I found a house that is a pre-foreclosure, and the agent represents both the seller and me (disclosed dual agent). The agent tells me that negotiating on the price is no longer possible, since the bank has already declined a previous offer from a person who has now backed out.

So how do I know the selling price that the agent told me is legitimate, when there is no written proof for what the bank is asking for?
You don't, and you've made a mistake. You should never accept a dual agency. The listing agent acts for the seller's interests and tries to get the highest possible price for the house at the best possible terms to the seller. A buyer's agent would advocate for your interests and try to get the house at the lowest possible price and at the best possible terms for you. The idea that the listing agent now "steps back" in a dual agency and ethically represents both sides is the biggest crock of you know what that I've ever heard of.

Dual agency is an ethical impossibility. I don't care what the NAR says. I don't care what the state says. It is impossible for one agent to ethically represent both sides of a real estate transaction. Period.

Dual agency is illegal in several states, but unfortunately not here.

Once the advocacy is gone, as it must be in dual agency, what's the point of having an agent at all? There is none.

That is why buyers should NEVER call the listing agent to see a property, and should NEVER attend an open house without telling the agent in charge that they will have their own representation.

Dual agency is bad agency.

Now having gotten yourself into it, you are basically at the mercy of the word of this agent. Not a good place to be, but you've already signed papers accepting dual agency, right?

As far as negotiating, of course you can negotiate the price. Unless there is a contract signed by both you and the bank that states the price and closing date, you can negotiate whatever you want. And you can tell the bank to stick it if they won't negotiate. Prior deals that have fallen apart are irrelevant. As long as they haven't accepted your offer and gone through attorney review, why can't you negotiate? There is no deal, right?

-Marc
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Old 02-28-2009, 05:27 AM
 
Location: Warren County and loving it!
4,995 posts, read 4,092,146 times
Reputation: 2403
Wow, that is good information.

I often wondered about the ethics of dual agents. I didn't think it was right either, but it seemed there were so many that I thought that's just how it's done.

Thanks for the info.
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Old 02-28-2009, 08:03 AM
 
Location: The Garden State
121 posts, read 156,190 times
Reputation: 120
Quote:
Originally Posted by Marc Paolella View Post
You don't, and you've made a mistake. You should never accept a dual agency. The listing agent acts for the seller's interests and tries to get the highest possible price for the house at the best possible terms to the seller. A buyer's agent would advocate for your interests and try to get the house at the lowest possible price and at the best possible terms for you. The idea that the listing agent now "steps back" in a dual agency and ethically represents both sides is the biggest crock of you know what that I've ever heard of.

Dual agency is an ethical impossibility. I don't care what the NAR says. I don't care what the state says. It is impossible for one agent to ethically represent both sides of a real estate transaction. Period.

Dual agency is illegal in several states, but unfortunately not here.

Once the advocacy is gone, as it must be in dual agency, what's the point of having an agent at all? There is none.

That is why buyers should NEVER call the listing agent to see a property, and should NEVER attend an open house without telling the agent in charge that they will have their own representation.

Dual agency is bad agency.

Now having gotten yourself into it, you are basically at the mercy of the word of this agent. Not a good place to be, but you've already signed papers accepting dual agency, right?

As far as negotiating, of course you can negotiate the price. Unless there is a contract signed by both you and the bank that states the price and closing date, you can negotiate whatever you want. And you can tell the bank to stick it if they won't negotiate. Prior deals that have fallen apart are irrelevant. As long as they haven't accepted your offer and gone through attorney review, why can't you negotiate? There is no deal, right?

-Marc
Marc definitely brings up some good points against dual agency. However, there are some advantages.

If you are a buyer and approach an agent about a property and suggest that you may use the agent in a dual capacity, you just created one very motivated agent. He or she will now get twice the commission if they make the sale and will do everything possible to make it happen including help bring down the price, especially in this difficult market.

I would suggest that amateurs should not try this. You need to have conducted some good research as to property values, you absolutely need to have a very good real estate attorney for the process and at closing, and you need to be an experienced and skilled negotiator.

Buz
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Old 02-28-2009, 02:23 PM
 
Location: Cranford NJ
985 posts, read 2,189,977 times
Reputation: 321
Quote:
Originally Posted by Marc Paolella View Post
You don't, and you've made a mistake. You should never accept a dual agency. The listing agent acts for the seller's interests and tries to get the highest possible price for the house at the best possible terms to the seller. A buyer's agent would advocate for your interests and try to get the house at the lowest possible price and at the best possible terms for you. The idea that the listing agent now "steps back" in a dual agency and ethically represents both sides is the biggest crock of you know what that I've ever heard of.

Dual agency is an ethical impossibility. I don't care what the NAR says. I don't care what the state says. It is impossible for one agent to ethically represent both sides of a real estate transaction. Period.

Dual agency is illegal in several states, but unfortunately not here.

Once the advocacy is gone, as it must be in dual agency, what's the point of having an agent at all? There is none.

That is why buyers should NEVER call the listing agent to see a property, and should NEVER attend an open house without telling the agent in charge that they will have their own representation.

Dual agency is bad agency.

Now having gotten yourself into it, you are basically at the mercy of the word of this agent. Not a good place to be, but you've already signed papers accepting dual agency, right?

As far as negotiating, of course you can negotiate the price. Unless there is a contract signed by both you and the bank that states the price and closing date, you can negotiate whatever you want. And you can tell the bank to stick it if they won't negotiate. Prior deals that have fallen apart are irrelevant. As long as they haven't accepted your offer and gone through attorney review, why can't you negotiate? There is no deal, right?

-Marc


And a good way to blow this deal too. Dual agency is legal, and a way to get the house sold. If you are so against it, you should work in a state where it's illegal, this way you don't have to give agents who are comfortable working dual agency a bad rep. Listing agents are more motivated to sell their listing and will work harder to get a buyer for it. When a seller consents to dual agency they are giving the agent the right to do the job they hired them to do, and that is, get their home sold.

Why do we put our office number in front of their homes? What do you do with the buyers that call on their home? Do you bring them to see homes listed by another brokerage firm? This would be a disservice to the seller.

If you are not selling your own listing then I presume you expect someone from another brokerage firm to sell it for you? Without dual agency, a lot of listings would never have sold. That is why it is LEGAL.
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Old 02-28-2009, 05:17 PM
 
Location: Northern NJ
138 posts, read 299,218 times
Reputation: 58
The arguments pro and con re dual agency all have good points. It depends on how ethical the listing agent is. It's unfortunate this agent is not handling you fairly. Tbey should present recent comps demonstrating that the asking price is a great deal, but furthermore you should offer any price you feel is reasonable. Have they offered to justify the price? Have you asked for comps? Is walking away from this deal, having learned a valuable lesson, an option for you?

I've handled dual agency in the past by assigning another agent from my office to negotiate for the buyer, and then paid them directly after closing. Worked well for everyone involved.

Why aren't you working with a real estate agent anyway? A great realtor representing you will keep you OUT of trouble and save you thousands of dollars. Ask for recommendations from family or friends. What about a real estate attorney? Do you have one? If so, ask her for a recommendation. Good luck to you!
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Old 02-28-2009, 05:17 PM
 
Location: Northern NJ
3,012 posts, read 2,724,379 times
Reputation: 2880
Quote:
Originally Posted by Sergio M View Post
And a good way to blow this deal too. Dual agency is legal, and a way to get the house sold. If you are so against it, you should work in a state where it's illegal, this way you don't have to give agents who are comfortable working dual agency a bad rep. Listing agents are more motivated to sell their listing and will work harder to get a buyer for it. When a seller consents to dual agency they are giving the agent the right to do the job they hired them to do, and that is, get their home sold.

Why do we put our office number in front of their homes? What do you do with the buyers that call on their home? Do you bring them to see homes listed by another brokerage firm? This would be a disservice to the seller.

If you are not selling your own listing then I presume you expect someone from another brokerage firm to sell it for you? Without dual agency, a lot of listings would never have sold. That is why it is LEGAL.
So your loyalty is to your paycheck, and not your client?

If someone calls me to see one of my listings, I show them the house. And give them the CIS statement explaining agency as soon as I meet them. If they decide to buy it, I explain the role of agency in the real estate transaction and advise them that I am acting as a seller's agent and they might want to consider retaining their own buyer's agent.

I also explain the disadvantages of dual agency and how it hurts them. They then can make up their mind as to whether thay want to accept the disadvantage and move forward. Usually they get their own agent. Which is fine with me.

A couple of weeks ago a couple came into my open house and decided to buy it. I showed it to them (and both sets of parents) a total of 3 times over the next two days. I explained agency to them. The next thing I know, a Weichert agent calls me apologetically and asks if we can make some sort of deal so that she can represent the buyers. I said no problem, we'll do a referral fee. All went smoothly and we entered negotiations with each side PROPERLY and INDEPENDENTLY represented. No divided loyalties. No "stepping back" from advocacy. No "wondering if the agent is more loyal to the double-dipping deal then the client".

To the public: Regardless of agent cat fights about this topic (old timers HATE the idea of giving up the double commission), just remember this: ALWAYS retain your own representation. You have a right to indpedendent, loyal representation and unfettered advocacy. Dual agency ERASES loyalty and advocacy, leaving you at best with a paperwork handler who is no help at all, or worse, an individual who is so motivated to collect 2 commissions that all loyalty goes to getting the deal done.

The fact that it is ILLEGAL in several states must mean something, right? If it were innocuous, you wouldn't have to sign 3 consent forms before being subjected to it, right?

-Marc
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Old 02-28-2009, 05:49 PM
 
Location: Cranford NJ
985 posts, read 2,189,977 times
Reputation: 321
A Realtor's job is to SELL real estate for the highest possible price. It is the Seller who accepts the offer or declines. Although one can represent both parties, you cannot disclose information which will give one party an advantage over the other. The buyer can offer what they want and the seller can either accept or decline. In a dual agency the agent just guides the process along. In either instance We do not give legal advice, that is what your attorney is for.
You can still give both parties excellent advice and both parties walk away with a fair deal.

Last edited by Sergio M; 02-28-2009 at 07:08 PM..
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Old 02-28-2009, 09:04 PM
 
Location: NJ
383 posts, read 475,244 times
Reputation: 178
Quote:
Originally Posted by Sergio M View Post
A Realtor's job is to SELL real estate for the highest possible price.
Holy crikey I'd hate to have you as my buyer's agent.
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Old 02-28-2009, 09:11 PM
 
Location: New Jersey
1,395 posts, read 1,995,859 times
Reputation: 275
Quote:
Originally Posted by xmonger View Post
Holy crikey I'd hate to have you as my buyer's agent.
you know sergio ?


YouTube - Smirnoff Ice - Sergio

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