REAL ESTATE dual agent or should we change? (Norfolk: foreclosure, mortgage)

[Baballou]

This post is about using a buyer's agent versus a dual agent. I will describe the situation, but I'd rather not debate the strategy. I really want advice about the issue of what we should do about our agent before this goes any further.

We found a house we are excited about buying. Our realtor let us know that we have a very motivated seller who will take less than the already reduced price. However, she also made it clear that she knows more than that because she is friends with the seller's realtor. However, because of the things she knows, in this instance she has to be a duel agent - she has to maintain confidentiality for both parties. So she probably knows what the seller will accept and she also knows what we can pay.

We researched the property and the seller and there is an impending foreclosure. We found several other factors that would motivate the seller. We might even know more than the realtors.

We researched strategies for making a low ball offer. We have to do that because (even our realtor doesn't know) I have lost my job. So we are looking at a cash purchase with no mortgage - maybe a home equity loan after.

Without going into detail about making low ball offers (this post is not about that), part of our plan is to have two other houses that either we pretend to be ready to make an offer on or that we really will make another offer on. We want our agent to present a *reasonable* low offer, which must truly be our bottom line, along with a tactful letter from us (to soften the blow). Here's the key part:

The offer is limited to 3 days. If a counter offer is made, our agent will be instructed to respond that we are considering two other properties and that our offer is our bottom line. In other words, we intend that the low ball offer be non-negotiable. It's a roll of the dice to be sure, but that's what we want to do.

HERE'S THE QUESTION: Our realtor is a duel agent in this planned transaction. She cannot reveal to either party anything confidential, and she can't do anything that is adverse to either party's interest, either. Because of the nature of our strategy, shouldn't we have a buyer's agent to pull this off? If so, how do we get rid of our agent and find an objective one?

One alternative I can see is to quickly look at 2 other properties (as in today) with our realtor, and give the impression that we consider all 3 potentials for an offer and then casually decide that we will start with the first. In other words, can we play out our strategy if we don't reveal our plan to our dual realtor? If she doesn't know it's a well-thought-out strategy, do you think we can pull this off? The fact that she knows the other realtor might even lend credibility to this. Especially if we make very clear to her that we will walk away if this offer isn't accepted.

We gotta move on this one - deal of the century. Stay with dual agent or change? How to fire our agent and how to find the right buyer's agent? HELP!

[jlyang]

Hi,
I think you are much better off if you have your own buyer's agent. We had thought about dual agency before (figured the listing agent might enable us to get a better deal if she were receiving double commission), but are glad we didn't go this route. Bottom line is, a listing agent is obligated to protect the seller's best interests throughout the entire process. A good buyer's agent can advocate aggressively on your behalf, not just on the initial price, but also on things that come up during home inspection, etc. Realtors also told me that they generally don't like dual agency, due to conflict of interest issues.

If your realtor is friends with the listing realtor but is NOT the listing realtor, then this is not a dual agency situation, as your realtor is not taking a commission from the seller. It would be commendable, in this case, that your realtor went ahead and was frank to you about her situation.

If you have signed papers committing yourself to using your realtor as your buyer's agent too, then you are contractually obligated to sticking with her. If you have NOT formally committed yourself to your realtor and don't feel comfortable continuing with her, then you need to find a new buyer's agent. We have worked with an excellent buyer's agent (Norfolk county, not sure how wide her range is), and could email you her information if you email me privately.

Good luck!

Originally Posted by Baballou

This post is about using a buyer's agent versus a dual agent. I will describe the situation, but I'd rather not debate the strategy. I really want advice about the issue of what we should do about our agent before this goes any further.

We found a house we are excited about buying. Our realtor let us know that we have a very motivated seller who will take less than the already reduced price. However, she also made it clear that she knows more than that because she is friends with the seller's realtor. However, because of the things she knows, in this instance she has to be a duel agent - she has to maintain confidentiality for both parties. So she probably knows what the seller will accept and she also knows what we can pay.

We researched the property and the seller and there is an impending foreclosure. We found several other factors that would motivate the seller. We might even know more than the realtors.

We researched strategies for making a low ball offer. We have to do that because (even our realtor doesn't know) I have lost my job. So we are looking at a cash purchase with no mortgage - maybe a home equity loan after.

Without going into detail about making low ball offers (this post is not about that), part of our plan is to have two other houses that either we pretend to be ready to make an offer on or that we really will make another offer on. We want our agent to present a *reasonable* low offer, which must truly be our bottom line, along with a tactful letter from us (to soften the blow). Here's the key part:

The offer is limited to 3 days. If a counter offer is made, our agent will be instructed to respond that we are considering two other properties and that our offer is our bottom line. In other words, we intend that the low ball offer be non-negotiable. It's a roll of the dice to be sure, but that's what we want to do.

HERE'S THE QUESTION: Our realtor is a duel agent in this planned transaction. She cannot reveal to either party anything confidential, and she can't do anything that is adverse to either party's interest, either. Because of the nature of our strategy, shouldn't we have a buyer's agent to pull this off? If so, how do we get rid of our agent and find an objective one?

One alternative I can see is to quickly look at 2 other properties (as in today) with our realtor, and give the impression that we consider all 3 potentials for an offer and then casually decide that we will start with the first. In other words, can we play out our strategy if we don't reveal our plan to our dual realtor? If she doesn't know it's a well-thought-out strategy, do you think we can pull this off? The fact that she knows the other realtor might even lend credibility to this. Especially if we make very clear to her that we will walk away if this offer isn't accepted.

We gotta move on this one - deal of the century. Stay with dual agent or change? How to fire our agent and how to find the right buyer's agent? HELP!

[Baballou]

It is a dual agent situation - she told us that she ethically cannot do otherwise because she already knows confidential things the selling agent told her. Things she wouldn't know if she were just a buyer's agent.

[clevedark]

Part of me thinks you're making this way too complicated, however I don't know how much you're lowballing this property.

We like to buy directly from the listing agent. Fewer people involved the better, for us. Whether that's always the right way to go is up for debate, but that's our preferred route.

The best tool you have at your disposal is how you structure your offer. You are offering cash, which is king right now. Most sellers will jump at that. It sounds like you are bottom fishing--you don't want to insult. So look at closing and inspections as places where the seller can save face. Waive the lead inspection. Let the seller choose the closing at a date mutually convenient for the both of you (can always be tweaked later, because, frankly, you're the one who has to hand over the check). Say you won't ask for any repairs based on home inspection under 2K. Stuff like that.

Also, why give them three days? You're asking for trouble. The last house we bought we gave four hours.

Good luck.

[scarletfire]

So your agent is proceeding ethically and telling you something honestly that she really didn't have to do and you want to ditch her for doing so? Nice.

[clevedark]

Good point. This scheme sounds kooky to me.

[Concepts]

Your current agent showed you the property so she is considered the "procuring cause" if you make an offer on the house. Any other honest agent will ask you if you're working with an agent already (and I hope you'd answer honestly).

Your agent has been upfront with you from the start - you need to trust her and go forward with your offer with her. Even if you found another agent to submit your offer, ethically it is not the right thing to do.She has spent time with you, found a home for you and deserves the commission on this one.

Forget the games of pretending to be putting offers in on other properties. You are making this way more complicated than it needs to be.

[Valerie C]

I imagine that this situation has already passed, and is now possibly under agreement with OP. I would love to know how all of this played out!

Just wanted to mention that on the surface, this does not sound like a dual-agency situation. Ethically, your agent can and should tell you everything she knows about the property and the owners, including their motivation. Her fiduciary duty is to YOU, her client. You did sign a Buyer's Agency agreement, right? That's what makes her "your" Realtor.

The Seller's Agent is at fault by telling other agents things about the homeowners that she shouldn't have (loose lips sink ships...) Confidentiality is part of the fiduciary duty that an agent owes to their Seller clients

My only question is do the agents work for the same company, and if so, does that agency practice Designated Agency or not?

[Dressy]

Hi,
I have another situation. We contacted directly the listing agent to view a property listed by her. My husband also informed her that we were interested in some other properties around. She quickly extracted all the info from my shy husband about those. and in a matter of hours called other listing agent and arranged with them the viewing of another house. She did not go to show it herself. All she did - made a phone call to another agent. Now she is insisted that we should stick to her. Is that honest at all? Is that an ethical behavior?
I d rather prefere to deal with the selling agent directly. I know what the dual agency is and I have nothing against it. Dont be fooled , you can not be sure that you buying agent will be defending your interests unless you paying him out of pocket a fixed fee. If your agent comes for free = for the commision that he gets at closing the deal, then guess what?! his motivation is to close the deal = offer bigger price = make it fast. Now I am not telling anything bad about agents, but that is obviously their $ motivation. If you think you found an agent for whom your interest and saving YOUR money are more important then getting his own commission - good luck.

[capecodcathy]

Dressy, you are NOT obligated to an Agent you have no executed (signed) contract with. This includes a Buyer Agent. And, as a former Buyer Agent, this person is no Buyer Agent. A Buyer Agent would actually pay attention to you. Not dump information on you, make a few appointments and send you on your way.
You do not owe her any allegiance for just pulling some listings of the MLS, setting up some appointments and leaving you hanging. Buyer Agents actually earn their money.