Choosing between two buyer's agents (foreclosed, dual agency, commission, agreement)

[WestEast]

I have some questions about choosing a buyer's agent for a property. Here is the back story:

I am very interested in a property in my area that happens to be a REO. With legal issues. I phoned the listing agent to see the interior of the house. I spoke with him once, and made it very clear that I was most interested in the REO. He sent me some other listings, said he could view the REO and thereafter, over the course of several weeks, he did not return my calls or respond to emails.

Thereafter I started to work with another agent . I have not signed any paperwork with agent #2 but he has taken me to see three homes (1 I found and the other two were on the mls) and has not done a lot of work on my behalf but sends me mls listings for the area. He seems professional, pleasant and knowledgeable. However, he admits that he does not work as much in the area that is my first choice. Agent #2 also tried to contact agent #1 to see the REO. Agent #2 said he could not figure out what was going on with the REO and Agent #1 also did not respond to several calls.

Agent #2 is unavailable for personal reasons for two weeks. During that time, I made one last ditch effort to contact Agent #1 again and this time, was able to see the house. I did not indicate that we had spoken in the past. Agent #1 is the exclusive agent for the REO. He also seemed to have a lot of knowledge about the area that is my first choice. I liked him and think he would make a good buyer's agent.

Questions:

1. Should I work with agent #2 to try to pursue the REO? The reason for doing this is that agent #1 seems to have the most info about the REO and seems like he would be in the best position to keep me informed when the legal status of the REO changes. I am guessing that working with an agent who is also the bank's listing agent is not the best idea normally but I think once the title on the REO clears, it will go fast and being a client of agent #2 may help me get a jump on the competition. Is this a bad idea?

2. Is it unethical to ditch agent #2 for agent #1? I like #2 and he was a referral, but the relationship is fairly new so he has not done a lot of work for me. But I can respect that the work he has done is worth something.

Any thoughts or suggestions would be appreciated.

[BiggJoe4181]

If agent #1 is an exclusive agent for the seller on the REO property then they can not represent you in the transaction on that particular REO unless there is a dual agency agreement and you say you're comfortable with it and the seller agrees as well.

If agent #2 is not comfortable with REO property perhaps you should ask him to refer you to someone in his office that is an REO expert. That way agent #2 could still get a referral fee.

[AngelBy]

Originally Posted by BiggJoe4181

If agent #1 is an exclusive agent for the seller on the REO property then they can not represent you in the transaction on that particular REO unless there is a dual agency agreement and you say you're comfortable with it and the seller agrees as well.

If agent #2 is not comfortable with REO property perhaps you should ask him to refer you to someone in his office that is an REO expert. That way agent #2 could still get a referral fee.

I like your answer, it's helpful and very informed.

[WestEast]

Originally Posted by BiggJoe4181

If agent #1 is an exclusive agent for the seller on the REO property then they can not represent you in the transaction on that particular REO unless there is a dual agency agreement and you say you're comfortable with it and the seller agrees as well.

Thanks for the reply. I should have mentioned that if I decided that I want the REO enough, I would consider a dual agency relationship. The seller is the bank so I imagine they would not care much. I am wondering if the dual agency thing is a bad idea with a foreclosed property.

Thanks for the suggestion about asking agent #2 for the referral. I had not thought of that. Hopefuly he will be honest if he thinks he is lacking in that skill area.

[BiggJoe4181]

Originally Posted by WestEast

Thanks for the reply. I should have mentioned that if I decided that I want the REO enough, I would consider a dual agency relationship. The seller is the bank so I imagine they would not care much. I am wondering if the dual agency thing is a bad idea with a foreclosed property.

Thanks for the suggestion about asking agent #2 for the referral. I had not thought of that. Hopefuly he will be honest if he thinks he is lacking in that skill area.

Just know that in a dual agency situation agent #1 will turn more into a moderator than an agent.

[Laurie Matthias]

The other factor to consider beyond what already has been discussed is the fact that Agent #1 has procuring cause if you go 'back' to Agent #2. Meaning that he showed you the REO property therefore, at least in PA, he would have the right to his share of commission owed. In this case, he could potentially be losing out on both sides (if he acts as a dual agent).

On another note, Agent #1's communication skills seem to be lacking. If he has been unresponsive to you before, don't expect anything better going forward just because he showed you the house and you 'like' him. Past behavior is a strong indicator of the future.

Lastly, you should have discussed with Agent #2 what you've done, either before they went away or immediately afterwards. There are tons of agents out there and it's important for us to know why a client jumps ship. So, if Agent #1 knows his market better, let Agent #2 know that's the reason you went to him. Truth hurts, but at least he'll know for sure.

Good luck!