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We found a house we are interested in. The "selling agent" has been talking to us the past two weeks and we are ready to make an offer on the home. He is also willing to represent us, and says that he will help us to get our offer accepted over the other offers. This is a HUD home so the government is the one accepting the offer or not.
We have a few concerns....
1) What if he tells us that some other person put an offer in that beats our offer and asks if we can raise our offer, but he is lying and we are really bidding against ourselves?
2) How do we know that he has our best interests in mind?
We also see a few benefits...
1) He is motivated to get OUR offer accepted because it means more commission to him.
2) If we use another agent, it really isn't fair because he is the one who talked to us about purchasing the home.... so he might feel bitter and try and get our offer NOT accepted. (it is across the street from the house we are renting, so we met him that way, not through the normal way of meeting an agent)
Before we were set against using a double agent because we found that when they show you houses, they only show you houses that they are selling themselves and will not tell you about houses that they are not selling because they want that double commission. However, we already found the house we want to make an offer on so I don't see that being an issue.
What do you think, should we use the double agent?
We found a house we are interested in. The "selling agent" has been talking to us the past two weeks and we are ready to make an offer on the home. He is also willing to represent us, and says that he will help us to get our offer accepted over the other offers. This is a HUD home so the government is the one accepting the offer or not.
RED FLAG
We have a few concerns....
1) What if he tells us that some other person put an offer in that beats our offer and asks if we can raise our offer, but he is lying and we are really bidding against ourselves?
THINK ABOUT THIS. YOURE ABOUT TO USE A PERSON TO BUY A HOUSE THAT STANDS TO BENEFIT THE MOST IN THE TRANSACTION.
2) How do we know that he has our best interests in mind?
YOU DONT. HE PROBABLY DOESNT. BUT HE DOES HAVE HIS BEST INTEREST IN MIND
We also see a few benefits...
1) He is motivated to get OUR offer accepted because it means more commission to him.
YUP. YOURE RIGHT.
2) If we use another agent, it really isn't fair because he is the one who talked to us about purchasing the home.... so he might feel bitter and try and get our offer NOT accepted. (it is across the street from the house we are renting, so we met him that way, not through the normal way of meeting an agent)
BOO HOO. LIFE ISNT FAIR. PUT DOWN AS A CONDITION THAT YOUR OFFER HAS TO BE SIGNED REFUSED BY THE SELLER. THIS WAY YOU KNOW YOUR OFFER WAS SEEN BY SELLER
Before we were set against using a double agent because we found that when they show you houses, they only show you houses that they are selling themselves and will not tell you about houses that they are not selling because they want that double commission. However, we already found the house we want to make an offer on so I don't see that being an issue.
What do you think, should we use the double agent?
PERSONALLY. I FEEL YOU ARE PLACING YOURSELF AT A DISADVANTAGE. I WOULD NEVER DOUBLE END A DEAL. I WALKED AWAY FROM A GREAT HOUSE BECAUSE THE SELLING AGENT WAS ALSO THE OWNER AND ONLY WANTED TO GIVE A FINDER FEE TO ANY AGENT. THERE WAS A BUCKET OF LUBE NEXT TO THE DOITPR. WITH A APPKY LIBERALKY SIGN.GREAT HOUSE. WAS ON THE MARKET FOR 6 MONTHS ( in and out of pending) THERE IS ABSOLUTELY NO WAY FOR THE AGENT TO WORK IN YOUR BEST INTEREST ( get you the lowest price) AND IN THE BEST INTEREST OF THE SELLER ( get him the highest price).
The selling agent is the agent who sold the house, not necessarily the agent who lists the house.
The listing agent is sometimes the selling agent. The selling agent is sometimes a buyer's agent.
Are we really talking about agents or realtors or brokers?
Don't know the Code of Ethics in your area or if it applies to agents as well as realtors.
Some areas I know of...actually the state association requires realtors to have prospective buyers and seller sign a short form that essentially says what they can legally offer a buyer or a seller.
And, of course, there is more specific information in the seller's listing agreement.
So, having contracted with the seller to get the best possible price and to advise the seller on all aspects and benefits and risks of buyers' financing, inspections, and what would be best for the seller....how is the same agent on your team too and doing the same things for you?
I think the problem is the idea you state of the agent working for the highest commission rather than the highest benefit to his client or customer.
Working for the highest benefit, it's difficult to play both teams. I have seen where a buyer doesn't want to get another agent, says he knows what he's doing himself, signs off on the form knowing that the seller's agent can't help with pricing, comps, ins and outs of financing, advance advice on inspections and appraisals and can't help walk someone through the deal more quickly than relying on the lender....and it does wind up taking longer with more twists and turns.
An ethical agent will not be both the buyer and seller's agent. Its like being a divorce attorney for both sides. Just get someone who you feel comfortable with to represent you in the deal.
In my own experience, NO agent has YOUR best interest at heart. They want you to be happy as long as that means you are making them some money. Its a business to them. To you, its a home. Don't stack the cards against yourself and don't let this agent talk you into this.
This is a HUD home. Listing agent does not know the amount of bids made online. HUD accepts the highest net to HUD.
Listing agent probably understands the structure of a HUD transaction to minimmize failure by buyer or buyers lender.
this.
and although I do not advocate for dual agency myself, in a situation like this it would be less harmful, as HUD does not negotiating with repairs and/or pricing. It literally is a take it or leave scenario IF your initial offer is accepted
HUD has a formula for acceptance. If you fall in their formula range and are the highest bidder you win. They are really simple to work with as long as you know the rules. There is no advantage in using the listing agent unless they would take less commission on the buy side potentially raising your net to HUD.
Re that commission issue that is mentioned by myteriousjane.
HUD homes can offer different commissions. And they can deal with a situation with just one agent by insisting the agent take one side of the commission alone, not, as you seem to think, both sides of the commission.
Well, working with HUD tends to skew things a bit -- the listing agent was assigned the listing by HUD through an asset management, and while they may have done a broker review, photos and put the house on MLS, many HUD listing agents don't really has a relationship with the "seller" -- they are graded on how quickly they sell a house and how complete their marketing is, and the better their points/grade, the more "preferred" the agent becomes.
There is little "negotiation" with HUD -- they are fairly clear on what they will and will not pay for, and it's a numbers game -- you bid highest, you get it, warts and all. If you don't close within the specified time, you're toast. So a listing agent can certainly help you, since they have very little input on the actual transaction. The listing agent's commission doesn't change regardless of whether or not there's a buyer's agent or not.
However, there's no downside to having your very own buyer's agent. You have enough concerns (some warranted, some not) that you will probably be more comfortable having someone on your side exclusively. Don't worry about him getting "bitter" -- usually, the listing agents are one of the last to know, they are notified by the asset manager that they've received an offer (it's all done on-line -- make sure you get a buyer's agent who has done a HUD deal before, you don't want to be their guinea pig!) and then get another notification when the offer is accepted. It is absolutely NO skin off their nose if you have another agent -- it won't lower the amount of commission that they receive.
Thanks everyone for your input. A lot of my concerns have been addressed.
I do see how in this situation it may be different and a listing agent could be beneficial, being that it is a HUD home. We would have little chance of our deal being ruined because some rules were not followed.
We met with him today to see the inside of the house (we hadn't yet seen it), and talked about how if we do make an offer, that the best day to make on offer would be on Wednesday because that is when he would have a better idea of the other offers being made. I guess other agents less familiar with the HUD process call to ask for help and they are able to get an idea what the offers being made are.... so he could give us a heads up as to what we need to offer to be approved.
I'm still torn, but I definitely have a lot to think about... Thanks everyone.
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