Should a Buyer go direct to Listing Agent?

by Michael Lam | Jul 07, 2015


In a competitive real estate market, every buyer is trying to find an advantage to getting their offer accepted. It’s no longer simple as putting in an offer with the highest price to get the home. In this period of real estate recovery, people are cautious about home price and certainly do not want to once again face the housing boom that burned a lot of people. Many were affected by this and even more so, current buyers are well aware of competitive bidding that drives up prices of homes.

It’s an ongoing debate for buyers wanting to get a home they desire to either use an agent they know or go directly to a seller’s agent, hoping to offer the same price while putting more money in the seller’s pocket through reduced commissions or doubling commissions for the seller agent (representing both sides). This is generally prevalent in those buyers who are not committed to an agent or who have an agent not catering towards their needs. Whatever the reason may be, the question is still outstanding. Is there any competitive advantage by going direct to a seller’s agent vs. getting represented by another agent knowing the seller agent will need to split commissions?

Winning direct with seller agent:

There are agents that only care about money. They don’t care about being “fair” or about proper real estate “etiquette.” They look at their bottom line and that is about it. For these types of agents you can get a competitive advantage by going direct to a seller agent. You, however, must keep in mind that the seller agent isn’t your “agent”. The agent only facilitates this deal for you. So any advice you expect to get from them will be zero or suspect. No relationship has been built thus trust will not be something to expect with one another.

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Alev Bagater |

However if you’ve done the research and are confident on your offer terms, then going directly to a seller agent will help kick out your competition. It’s the seller agent who essentially is the “gate-keeper” of all offers. The agent can, in theory, limit the # of offers shown to the seller without seller knowing. This may sound shady, and it certainly is by some accounts, but it’s what can be called reality and is common practice in very competitive markets. You can shout and pout but that is one reason of many why you may not get your offer accepted, even if it is the highest offer. There are other logistics involved. Understanding this can be the difference between getting your offer accepted or ignored.

How to tell if an agent plays both sides?

How do you detect or find out if the agent is willing to play this game? It’s not always straight forward; however here is a list that can serve you well:

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  1. Easiest way is to directly ask the agent in a private conversation. Tell the agent of your intention and that you want a competitive advantage and you are serious about the home. Come prepared and offer to provide documentation that you can make an offer on the home. You must understand other prospective buyers could be doing exactly what you’re doing. So ask yourself what else can you offer to the seller agent to make the agent choose to work with you.

  2. See if the seller agent currently has their own buyers looking at the home. If that is the case then you should not go directly to the agent. This is because the seller already has a relationship with one of their buyer, so that buyer will always have precedence over a recently new person.

  3. Look at the seller agents other listings. Does the seller have a lot of listings? Having a lot of listings can lead you believe that the seller agent is willing to “deal” since they care about closing deals fast and quick. They may not be willing to “hold out” for the best deal. A lot of listings is defined by Kevin Khoi, a top producer at his brokerage, any average agent having more than 3 listings that they own.

Losing direct with seller agent:

There are those agents that follow correct real estate policy and “etiquette” and will truly be your agent even if you go direct to them. In other words, there will be no competitive advantage going directly to a seller agent. The agent will treat you like a buyer agent and bar you from getting any “inside” information. You will be in the dark in terms of what offers are coming in and receive no help from the seller agent getting your offer in front of the seller. You might even get less information than an actual buyer agent due to the seller agent fearing any liability concerns for representing both buyer and seller.

This is especially a disadvantage if the seller agent has their own buyer that is interested in this home. At that point you are almost at a lose-lose situation and you are better off moving on to another property. You can give it a shot by getting a buyer agent to represent you. Keep in mind just grabbing any buyer agent isn’t going to do the trick. In a competitive environment you truly need an agent on your side looking out for your best interest. A seller agent that will represent you will never have your 100% best interest in hand since the seller is obligated to get the best price offer or an offer that yields the most money to the seller. The buyer is 2nd in precedence (priority). Keep that in mind unless you have found an agent willing to play both sides of the fence.

What’s the verdict? Go with seller agent or get your own?

It depends on the agent, if you can detect whether an agent is willing to play both sides; it can be advantageous, but you got to find an agent willing to play. In general, especially in an environment where the market is competitive, your best bet is to build a relationship with a buyer agent and have that agent fully invest in you. It’s a two way street.

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This means if you show commitment to the agent, the agent will show commitment to you. Having an agent on your side assures there is no conflict of interest. When you’re represented by the seller agent, there is always that doubt whether the seller agent is doing what is best to get you the best deal. In most cases that agent won’t. Need a top tier, all pro agents? Have a look at Kevin Khoi profile.

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