Realtors Representing Both Buyer and Seller

[ma-skis.com]

Oh great CP forum, please lend me your wisdom...

So as a first time buyer, I've scoured MLS and found something that my wife and I like. We are currently debating whether or not we should get another realtor to help represent us, or to just use that realtor to represent both parties. Is this a good idea? Are there any benefits to having my own realtor now even though we've identified something we want to offer on? are there any benefits to having one realtor?

[jam26]

I did this once and saved some money in the process. They're held to a code of conduct and have to fairly represent both sides. If you want to haggle, then perhaps it's not a great idea. But if you want the property and have already agreed on a price, then I think it's a fairly safe thing to do.

[Winsor_Pilates]

I would stay away from double dippers and get your own realtor. It won't directly cost you anything anyway.

The risk of using the same realtor is that they may not give you all of the facts about the property, because they want to make the deal. If there's bad features of the property that aren't obvious, they may not bring them to light as much as your own realtor would.
Realtors have ethical conducts they should follow, but I can guarantee you from working in the industry, they do not all do this. also, to a certain extent it is impossible to completely represent the best interests of both parties when representing both seller and buyer.

The benefit, is that the listing realtor is getting all of the commission instead of splitting with a selling realtor. Since they are getting more commission, they sometimes will negotiate some of that commission as a discount on the purchase price.

I guess it depends how sure you are about the property. IMO, using the same realtor defeats the point of having a realtor, which is to get a qualified professional on your side to represent your interests 100%.

[ken0042]

I watch enough home reno shows to see that it can never be good; unless you are the seller and your realtor is planning on giving you a discount.

The big thing is that if your realtor thinks the seller might accept a lower offer; if they represent both parties they can't tell you anything when you ask "Do you think we should hold out for a better deal."

[Rathji]

I would never be comfortable using the same realtor

[QuadCityImages]

Yeah, dual agency, which is what they call that, is a bad thing. I believe its illegal in a few places in the States. Having a realtor is kind of like an attorney; each side has one, and through the adversarial system, hopefully a compromise is worked out. Realtors have an obligation to get the seller the best price possible, and if you also expect him to somehow get the seller the best price possible, you can see the problem.

[ma-skis.com]

Oh great CP forum...

Thanks for the info, we asked about what kind of benefit we could get from the realtor, and they said they would be willing to forego about a grand in the transaction, so we figured it'd be a better trade-off to find someone to represent us in the negotiations.

[Winsor_Pilates]

Originally Posted by ma-skis.com

Oh great CP forum...

Thanks for the info, we asked about what kind of benefit we could get from the realtor, and they said they would be willing to forego about a grand in the transaction, so we figured it'd be a better trade-off to find someone to represent us in the negotiations.

Good call. Especially with the market the way it is in Calgary right now, you should be able to make a good offer below list and save much more then a grand.

[Tron_fdc]

Yeah, right now you can expect around 15% off the list price, depending on the seller and how motivated they are. I've seen deals for 25%+ because people are dumping homes.

I can't remember what the standard real estate commission is; something like 3.5% on the first 100k and 1.5% on the balance (not sure it's been a while), but when I was selling a $350k home I was paying around 15 grand in realtor fees. If all he's going to do is drop $1000 from the commision, all the while trying to sell the house for as much as possible (remember, the realtor makes more the higher the sale price) I'd DEFINITELY get my own realtor to make sure you're being represented in your best interests.

[Nabber]

Tron makes some great points, in most cases that realtor is going to try a get the most money for their seller. As a realtor myself I always find it hard trying to negotiate as much as I do for my clients when buying a property then when I'm trying to negotiate my own sellers when I'm representing the buyer as well. Like most people say on here if all they're going to give you is $1,000 find another realtor elsewhere as they should be more than able to save you way more than that $1,000.

[fredr123]

A couple weeks ago, recall that record-for-Calgary sale of the $7M+ home. That was a dual agency deal, wasn't it?

[Winsor_Pilates]

Originally Posted by fredr123

A couple weeks ago, recall that record-for-Calgary sale of the $7M+ home. That was a dual agency deal, wasn't it?

Wouldn't surprise me. The highest end of the market tends to have a higher amount of dual agencies, because a small number of realtors get most of the work.
They become experts for that sort of property, and everyone wants to use them.
High end Vancouver properties seem to always go to the same 4-5 realtors. I can't even imagine the type of commissions they make.

[trew]

Both realtors ultimately work for the seller. That's who pays the commission. In fact, the buyers agent's comission is paid by the seller's agent, so really, the buyers agent works for the sellers agent who works for the seller.

Buyers agents are good to help you find a property. When it gets down to the deal itself, both realtors will try to make the deal happen and neither are really responsible for representing your best interests (especially if your best interest is not buying the property). They simply facilitate a standard purchase contract.

A single agent scenario is probably worse for the seller, as their agent will be very motivated to get the deal done with a particular buyer.

Either way, I don't think it makes much difference. In theory you should be able to save more money using the seller's agent, but you might have better luck getting someone to negotiate for you. All depends on your level of comfort with negotiations etc...

[4X4]

I've got to say that (as a licensed realtor) dual agency is a shaft job for both the buyer and seller when it comes to average homes. The same is not true when talking about investment properties, high end homes or commercial.

With average homes, there is always a mark up that the listing realtor adds on top figuring that it will be negotiated down 1-3%. When you, as a buyer, are represented by your own realtor, he will attempt to achieve that downward negotiation because he wants your future business and your referrals.

As soon as the dual agency document is signed, the seller is forfeiting his right to have his own realtor work for him and basically agrees that the realtor becomes a lawyer that notes the deal.

A dual agent is not allowed to divulge what the lowest price a seller is willing to sell for and is also not allowed to divulge what the highest price a buyer is willing to pay. Not that any good realtor would do that anyway, but there is always insinuations that are bantered between the two realtors.

At the end of the day, the realtor wants to make the deal happen. Two realtors talking on the phone will usually find a price that they both think their clients will go for and then they sell that number to their clients. In a dual agency situation, the realtor is really not allowed to handle that aspect of the deal. And since that's usually the most important part of a residential deal, that's where both the buyer and seller are getting the shaft.
In dual agency, the realtor is suddenly getting paid double to do half the work. It's nonsensical. I personally can't believe that dual agency is allowed on residential deals.


Since you (OP) are the buyer, you have no good reason not to get your own realtor. You don't have to pay him because, as mentioned a few posts back, the seller actually pays him. If you want to be specific, it's the listing realtor that pays him.
PM Nabber. I'd say pm me, but I'm on leave because I'm getting into building.

[troutman]

I still surprised that this is permitted. It is a complete conflict of interest - the buyer wants to pay as little as possible; the seller wants to get as much as possible. How can one person represent both objectives?

[4X4]

I forgot to say that the most important thing a realtor does for you is to find out what is wrong with the house and to use that as ammunition to lower the price. Likewise, for the seller, the realtor's job is to find reasons why the price should remain where it is and to get every possible dollar for the seller. In dual agency, the realtor is not allowed to do that.

[4X4]

Originally Posted by troutman

I still surprised that this is permitted. It is a complete conflict of interest - the buyer wants to pay as little as possible; the seller wants to get as much as possible. How can one person represent both objectives?

Exactly. It's a total conflict of interest. I admit that I love double ending a deal, but if I ever let my license go and had to employ a realtor, there is no way I'd ever sign a dual agency agreement.

[ma-skis.com]

Originally Posted by 4X4

Since you (OP) are the buyer, you have no good reason not to get your own realtor. You don't have to pay him because, as mentioned a few posts back, the seller actually pays him. If you want to be specific, it's the listing realtor that pays him.
PM Nabber. I'd say pm me, but I'm on leave because I'm getting into building.

might be stupid, but what's (OP)?

And we've asked to meet with a realtor who we liked that we found when looking at homes who showed us a home that we ended up not liking. Any more good advice as far as what types of things I should be looking for when we meet?

ps sometimes CP feels like a big magic 8 ball with better answers.

[SebC]

Originally Posted by ma-skis.com

might be stupid, but what's (OP)?

Original Poster, i.e. thread starter.

[droopydrew19]

Buying a home you do not pay realtor fees. The seller does. If you need a kick a$$ realtor PM me.