Does an Agent Have to Disclose if Another Client is Interested in House That I Want? (disclosure, negotiation)
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I'm a prospective buyer in Texas who has enlisted the assistance of an agent who is not technically a "buyer's agent" (but that's supposedly not a big deal as they all work for the seller anyway).
If I'm interested in a particular listing, does my agent have to disclose to me that another potentially interested buyer of the house is his client as well? If so, when does this have to be disclosed. It seems that this agent could play us off of each other or something.
I'm a prospective buyer in Texas who has enlisted the assistance of an agent who is not technically a "buyer's agent" (but that's supposedly not a big deal as they all work for the seller anyway).
If I'm interested in a particular listing, does my agent have to disclose to me that another potentially interested buyer of the house is his client as well? If so, when does this have to be disclosed. It seems that this agent could play us off of each other or something.
If you have a licensed real estate agent representing you, and they are not the listing agent of the house you are interested in, then your agent doesn't work for the seller.
Would you also clarify how and why "this agent could play us off of each other or something" and what you specifically mean by that? I'm not sure what you mean by that.
One of the things I like about CD- real estate forum is that it is often like taking a test on agency law and ethics.
We're given bits of a scenario, we need to analyze the information then come up with a best case solution. well here goes....
The first thing I note is that the licensee is not an accredited buyers rep, like the OP states no big deal, but not for the reason given. Agency law has evolved so that it is no longer true that all licensees represent the interests of the seller. In fact in most states the licensee doesn't necessarily represent the interest of either the seller or the buyer. I think that Texas is such a state.
Now the issue that I find interesting...
If the licensee is working with multiple buyers interested in a single property but is not representing the interests of either of the buyers, what obligation does the licensee have for disclosure beyond the fact that there is someone else interested in the property? I can't see any other disclosure obligation, more than that could disadvantage the other buyer.
I do wonder if there isn't a conflict of interest issue if not in fact, just the perception of conflict.
I think if I was in this situation I might refer one of these buyers to another brokerage.
There are a couple of fantastic TX Realtors that can probably help you out with the state specific parts of the question. However, not all agents "work for the seller anyway". The Realtor and Buyer can sign, in SC, a right to represent that means the agent is contracted by the buyer to work in the buyer's best interest. Without a buyer agency, the Realtor does indeed represent the seller, technically.
They do not have to, but it would be in their interests to disclose that information. The more people that are interested, the more bids there will be, thus more commission they can potentially make. It all has to do with the ethics of the agent. Unfortunately the agent may not do their job very well and actually may not know there is another interested party, or they may not have the potential of making a big commission on that sale so they will attempt to push you for a different one. Agents do not work for you, they work for themselves, you are nothing more than a pawn in their attempt to make a living.
In Texas, if you have a signed buyer's representation agreement with an agent (meaning you've hired that agent to represent you), then that agent's fiduciary responsibility is to you. If you don't, then it is to the seller. That's probably where the "all agents work for the seller" idea comes from - someone misunderstanding how agency works in Texas.
If you are asking if your agent, that you've hired, should tell you if there is another buyer interested in a property that you are interested in (if they know), then, yes, they should tell you as part of representing your interests.
If they are the listing agent, they must have the seller's permission to disclose the existence and/or details of a competing offer. With that permission, they may do so. Your agent (the agent you've hired to represent you) can ask, and if the listing agent has permission, it is, indeed, in the seller's interest to share that information in order to generate competition between buyers. If the seller does not wish for them to disclose whether or not there's another buyer interested, then they can't.
I'm a prospective buyer in Texas who has enlisted the assistance of an agent who is not technically a "buyer's agent" (but that's supposedly not a big deal as they all work for the seller anyway).
If you signed a buyer rep agreement, the agent is your Buyer's Agent. If you didn't, the agent will most likely still work toward your best interests, but is technically a sub-agent of the seller. Many agents in Texas don't get the buyer rep agreement signed until they write an offer. Others, like us, require it before we show homes to a buyer.
Most listings (in Austin) offer a buyer commission for buyer agents but no commission (or reduced commission) for sub-agents, so your agent risks not getting paid if he doesn't take care of the paperwork.
Quote:
If I'm interested in a particular listing, does my agent have to disclose to me that another potentially interested buyer of the house is his client as well? If so, when does this have to be disclosed. It seems that this agent could play us off of each other or something.
"Your" agent would indeed be required to tell you if another offer exists. If you haven't signed a buyer rep agreement, it's not "your agent" though, technically.
Here's how it works:
Before I write an offer (as a buyer agent), I call and ask the listing agent if any other offer has been received and in-hand. If not, I ask if any other agents have said they were going to send an offer.
The second question often results in some cat and mouse, as a good listing agent will say something like, "well, we've had some good showings and though I don't have anything in hand, your buyer isn't the only one expressing strong interest". Which basically means "no", but if your agent sucks, they may swallow the bait and tell you something like "they don't have any offers but it sounds like they might have one coming soon". Which is why, as a listing agent, I use scripts like that myself.
If another offer does exist, but has not been signed, the listing agent can decide to tell your agent or not tell your agent. I'll usually say something like "we have an offer but it hasn't been signed, so if your buyer is interested, we'd be happy to see your offer".
Until an offer is signed, the home is still on the market and some agents don't want to discourage additional offers by scaring off buyers with news of an existing offer. Others think that letting the second buyer know about an existing will generate a better offer from the second buyer. I generally follow the latter approach.
Once two offers are in hand, if one of the buyers was told of another offer, then all other buyers must also be informed. If nobody was told of multiple offers, then there is no obligation to tell anyone. The seller can simply pick the best offer and try to negotiate with that buyer. Sometime, if all the offers are low, we tell all buyers there are multiple offers, and invite any adjustments or changes to make their "best" offer.
Steve
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