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We are first time buyers and have been watching the market freeze over the last year or two. We have been looking at homes with an agent in the area we are focusing on, but bother him only occasionally every few months (mostly go to open houses, watch the MLS for price reductions/new listing/sales). We are in an area where most homes are listed by the agency with which our agent is affiliated, and we have noticed that he supports the listing prices of his companies' listings, and easily criticizes other companies' listings. We have also found out that he is a listing agent for a lot of homes in direct competition with homes we are interested in (as in, same type of rowhome/same street etc). We of course did not know any of that when we started working with him. The couple of times we have been seriously interested in making offers on his company's listings, we have had to argue with HIM about why the listings are overpriced, he talks down the comps of homes that we come up with etc. - to the extent it feels like we are talking with a listing agent, not a buyer's agent (actually, I think he would be a terrific listing agent). So of course we ended up not making those offers, as we thought he would not negotiate on our behalf (these homes are mostly still sitting a year later, so obviously we were correct in our assessment that they were overpriced; another 600k listing sold for 25k more than we were willing to start negotiations on - an offer that he discouraged).
On the positive side, he is a pleasant person, and we feel bad that we have used maybe 40 hrs (?) of his time.
Now a listing by his broker has significantly reduced its listing price. We saw the home a few months ago during an open house. We think the owners are very interested in selling (we do our own research on owner finances, listing histories etc), and we know the comps - which indicate a further reduction - and hence negotiation - is necessary for below bubble pricing. The problem - our agent just became the listing agent on the row home next door with a significantly higher listing price. He would have to negotiate on our behalf with his own broker, and, if we succeed, he would create a bad comp for his own listing. Given our experience in the past with less obvious conflicts on our agent's behalf, we don't think we have a shot at this house. Any opinions?
Would it be out of bounds for us to use another agent from another company to make an offer, or go directly through the listing agent? We have not signed any agency agreement, and we saw the house in an open house, so there should be no procuring cause issue.
If you did not sign a buyer/broker agreement you have nothing to worry about. If you feel that this agent would not work in your best interest I suggest you get someone else to walk you through the process. This is a big decision you are making to buy a home. Do not let someone make it tougher than is has to be.
In NC, it would not be proper for an agent to represent a client vs. his broker in designated agency, with the implied duress of broker authority over the agent.
FWIW..
You haven't signed anything - so you can drop him like a tin can and kick him to the side of the road.
You are worried about his ethics? Before you cast the first stone ...
Agents don't agree to sale prices & terms - buyers and sellers do. Unless you think the agent is useless and dishonest ... I suggest you get the agent under contract. Sign a buyers agreement to make his role very clear and get an offer going.
I truly think you are looking at this upside down. "Your" agent (aka the one you have used) has no reason not to work on your behalf. He has listed a house you don't want - so what? If he listed the house next door, he wants the one you are looking at off the market. I've done deals where the listing agent is in my office, I've had no trouble keep my ethics in line. Co-workers, office mates, even employing brokers are just that ... not lovers. We are on the other side of the fence all the time.
Again, if you think the agent is a crook - run. Get someone else. Honestly, I've walked away from several clients (buyers & sellers) because I question their business ethics. I'd rather loose a commission than work for a slime.
I agree with MMichelle, very hard to tell from what OP has posted what their basis for comparison is.
Agents don't have anything to gain from supporting an "in house" listing over something the client is more likely to purchase. Any experienced real estate agent knows that! If he wants to EAT he has to SELL and if that means listing agents in his office feel like he is not a "team player" he probably does not have much experience / confidence.
In my experience the odds of any seller that is NOT under some particular stress of accepting a offer significantly below the range of discounts from asking that is typical among closed comps are ALWAYS very very small. If the agent you have been working with explains this he is being HONEST. It is frequently a WASTE OF TIME to submit offers that are far below asking, regardless of how much data you have about comps. It is even MORE POINTLESS for a buyer to put tons of time into researching what a seller owes OR what "prices pre-bubble were" UNLESS you are dealing with a short sale or some other distressed situation.
If OP has full access to MLS to research pricing history I have no idea why they would be working with anyone other than the listing agent.
If the OP is merely using incomplete information from public sites and is speculating on a whole bunch of irrelevant hypotheticals it may be wise to put their ego aside, hire a real buyer's agent and have focused approach to purchasing the best available property they can.
Very useful posts, thanks!
To clarify - we have been watching this particular market for 2 years - since before the crash. So I am acutely familiar with the listing history of the homes that we might be interested in at the right price (there are not that many). And the only homes here that are selling now are very low-priced listings, or expensive homes that sell at a steeeeep discount below listing price, and typically hundreds of thousands below initial listing price (to give you an idea, one home had a - final - listing price at 1.4 million after several reductions and sold for 1 million, another sold for 746k after being initially listed at 1.1...). Most listings are on the market for well over a year, often without reductions. Sales here have frozen, literally, and many homes sit empty for years (these were typically purchased for very little prior to 2000). Homes listed for well over a million dollars are also for rent at 3-4k... There are virtually NO comps since the crash.
A lot of info is now available on various real estate sites: Descriptions of earlier sold MLS listings, often with tours, videos (this is a feature I find tremendously useful, as it indicates if a home that sold in 2005 and is now on the market again, was renovated in between), history of current listing etc.
We are also in a very peculiar market: Listings are dominated by this one company that focuses only on this market, with only one other moderately large listing company in the area. And we've seen enough listings with this agent to notice how he praises his company's listings, but has no problems denigrating the other company's...We are NOT sure what is going on here, except that possibly this particular company is trying to get a monopoly over the market here...
Thanks for the kind words, Chet.
It seems clear, MovingIL knows the market well. That's great. It's always great to work with an informed buyer who has a clear view of the market.
But MovingIL is "not sure what is going on here". It sounds like aggressive marketing by the real estate company is ... bad?? They have a strong showing in the market area ... is that bad? There may not be anything sinister at play. There may not be an evil conspiracy to overtake the land.
."Trying to get a monopoly over the market..." ? It could be they are a successful real estate firm that has done well in that particular market and try to do as much business as possible. Would you expect WalMart to close in the middle of the afternoon because they have met their sales needs and want to leave the balance of the day's sales to their competitors? WalMart has been trying to take over the market from KMart and Target. Evil, evil, I say!! I'm trying to be lighthearted here but, let's get real.
I truly don't want to be unkind. I wish you all the best and hope you buy a wonderful house at a bargain price! But you seem to find suspicion at every corner and seem to expect that everyone is up to no good. And I have to ask myself why? It leaves me to question your motives and why suspicion surrounds you. You know the old saying; "What people do around you, they will do to you." The long way of saying it is, people expect others to act as they would. With all due respect, you are exactly the type of buyer I'd walk away from. I would have to decline your business because, I don't trust you.
Nevertheless, I wish you well. This is a great market to buy into.
Best wishes
This was not meant to be a tirade over company practices - just if I could possibly expect an agent to negotiate well on MY behalf on his BROKER's listing (even beyond the initial negotiations, what if problems arise during the inspection?) and with a much higher-priced listing in the same row home complex. Before we buy a home in a highly uncertain market place - I think we owe it to our pocket books to be a bit suspicious regarding people's incentives (might a more than a decade long relationship with your broker not override your relationship with one buyer, even given the best intentions on behalf of the agent??). It's just one more listing to you guys - but it's our financial future!!!
Again you assume, "It's just one more listing to you guys." I've been a real estate investor, landlord, buyer and seller for years. Real estate is my financial bloodline. I make the bulk of my living off my own real estate, my own money. Please don't make these sweeping general statements. I've never taken on a buyer or seller without working hard on their behalf. If I didn't feel I could - for whatever the reason (trust, the clients ethics, etc.) I walked away.
No. In direct answer to your question. My employing broker is not a spouse or family member. I have had no problem honoring my agency agreements and carring out my fiduciary responsibilities to my clients. The client comes first - before the office (aka employing broker) and before my best interest. I am an honest person. Additionally, the NAR code of ethics are important to me. This isn't a game, this is my business.
I have no idea if the agent you have worked with is good, bad, great or what. You have yet to show me one reason the agent you have worked with would mess up a good deal for you. Are his ethics questionable? Does he have a bad reputation? Have you talked with his clients who were unhappy with his work? Thus far I've heard nothing but he has another listing, priced higher than the one you want to buy. I don't see a conflict. The one you want to buy is listed by his employing broker. You sound certain the one you want to buy can be had for a good price.
More over, you haven't shown me any evidence showing he will be less efficitive as your advocate. Is he known for failing to advocate after the inspection? There is no logic here. If he knows the complex and has another listing he may know more of what to look for in the inspection. It should work to your advantage.
Honesty is important on all sides of a transaction. Have you discussed your concerns with the agent? It would be the direct and upfront thing to do. If you end up kicking him aside and hiring someone else, which is your option since nothing is signed -- don't you think it would be more honorable to discuss your concerns or explain why you are giving him the dump? Let's face it 40 hours is alot of time he has invested in you. (Consider your pay for a week - how would you like to blow it on someone, only to be dumped without any cause?) Ok, you have used him, if you are going to cut and run, I think you owe him a discussion.
I'm sorry, I don't see a problem. I don't see a conflict of interest. Your buyer's agent has no relationship with the seller. Just because 2 people work in the same office doesn't mean they have the same clients. Real estate dosen't work the same way as a retail store. In a retail store all the salespeople are selling on behalf of the same seller, the store. But in real estate each agent is an independent business person with their own clients, their own business.
As I've stated above, I think a formal buyer's agency agreement would be good business for you and all concerned. It would certainly outline the agents oblgations to you. And you are what it's all about.
Be brave, be honest. Be a good businessperson! Talk to the agent you have worked with.
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