It’s been awhile since I blogged about what’s called in the industry as…Double Ending. This is when the Listing Agent also represents the Buyer, thus getting the entire commission rather than needing to split it with another agent.
If you’ve read my blog for awhile you probably know that I don’t believe that one agent that represents both the Buyer and Seller is a good idea for either party.
If real estate agents represent both the Buyer and Seller, they are not supposed to help one side more than the other. So, at best you will have someone working for you at 50% vs. 100% which each party would get if they had their own representation. Plus, why would you ever tell someone any thoughts about the property or what your personal finances are that is also representing the party you are in negotiations with?
So, why do people still do this??? There is cases where it does make sense, such as doing a sale within the family or where you already have lawyers where all you need is the paperwork piece to be done by a Realtor. But, in most cases I think it’s because the Buyer thinks they are getting something more if they go to a Listing Agent, rather than having a Buyers Agent represent them.
Here are some things I hear Buyers mention that are not accurate:
1) The Listing Agent knows more about the property than anyone else
You would think that a Listing Agent would know more about a property but what most agents find out is what they need to know to put on the MLS listing. With sites like SloCountyHomes.com now displaying the details of listings, most Internet Home Buyers now know as much about a property than most Listing Agents. The other advantage a Listing Agent may have is that they’ve been in the property. Well, this is something that a Buyer can do too once they narrow down their choices and preview homes.
I had a Million Dollar listing I had a few years ago up in See Canyon. The homeowners brought me in when their other Broker wasn’t able to bring in an offer in 6 months and the owners let the listing expire, then hired me. The first thing I did was to walk the entire property (about 2 acres) with the homeowners and asked questions. There comment to me was that the other agent had the listing for 6 months and they never walked the property and had been in the home only a few times. (And yes, I was able to sell the property for them!)
With so many people getting real estate licenses over the past few years, a lot of homes are listed with an agent that the homeowners know. I see a number of properties listed by agents that don’t even work in the area. I would bet that a good Buyers agent would know lots more about the neighborhood and the home for sale than these Listing Agents.
With REOs, I think it’s even worse. There is no homeowner to ask questions of so all the Listing Agent will know is that they’ve seen at the home or info retrieved off the tax records.
2) Buyers think they will get a better deal if they buy using the Listing Agent
I guess the thought here is that the Listing Agent will take a lower commission since they are not needing to split it with anyone. I highly doubt that many agents these days are open to reducing their commission.
Plus, you need to think about the motivation of the real estate agent in a Double Ending situation. They know that if they don’t make the deal happen, that Buyer will go find another property and work with that Listing Agent so they will lose out on the Double End. What do you think is their priority then; 1) getting the Buyer a good deal or 2) pushing to get the Buyer to accept the Sellers offer? I highly doubt that a Buyer that can get the agent to lower their commission 1% and receive that in a lower sale price will get a better deal than a good Buyers agent negotiating 100% on the Buyers behalf, especially in today’s market. There are times when you the best business decision may to be to walk from a deal which is advice you aren’t going to get from an Listings Agent with a chance to Double End the deal.
To me it’s quite simple, if I was entering into a business transaction (especially one that was the amount we’re talking for real estate) I would want someone that was 100% on my side, not 50% which is the best you’re going to get. This is true for both the Buyer AND Seller. If I was the Seller, I would put in the Listing Agreement that the Listing Agent was NOT allowed to represent the Buyer too.
p.s. I have never Double Ended a deal. I have always brought in an agent to represent the Buyer when I was the Listing Agent. Not only do I think it’s the right thing to do for both clients but I also don’t want to take the added risk of being sued if one party thinks they were not represented equally.