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Real Estate Round-Up:

Do you need an agent on both sides of the transaction

Recently we’ve gotten a number of calls from buyers who just want to work with the listing agent directly. Since our business model is primarily with listings, this could be perceived as a real boon to our personal success. But what keeps me up at night is the “why” of this strategy. Apparently buyers believe there is some financial benefit (i.e. not having to pay both agents) if they work with the listing agent directly.

Within the CAR (California Association of Realtors) listing agreement, there is the capacity to reduce the listing agent’s commission if they represent the buyer in the purchase of their broker’s listings. It is pre-determined at the beginning of the process. In practical terms, a broker should be able to represent both the seller and the buyer – and it’s perfectly legal in California – but it can be tricky.

To an ethical agent, being able to truly listen and represent the principal that they are currently sitting next to is fairly easy. It brings out the best in negotiation skills. After all, as an agent my job is to give the client options, with the possible results of those options, so the client can make an informed decision.

The client makes the decision what price they want to list their property for. The client decides what they want to pay for a property. Clients mutually agree to what if any repairs will be made. Agents don’t actually make any of the decisions – they provide tools and resources to support their clients. This all works in a perfect world. But I suppose in the hands of someone who cared more about themselves than the client, it may not work out quiet so nicely.

But let’s get back to the “why” of this scenario. If I am a buyer, is there an intrinsic benefit to working with the listing agent? I could argue, yes. As the listing agent, if they are a local agent who knows the property, the client and the community better, than yes, it could serve a buyer well. Who is more aware of the other available properties and what they are selling for and how quickly they are selling?

But I could also argue, no. As the buyer, don’t I want someone who is thinking of ME first? Don’t I want someone who doesn’t have to entertain thoughts about what the seller wants or needs? The one thing I do know, is the decision to work with the listing agent or to work with a selling agent should not be predicated on saving money. An effective agent is invaluable because they always, always, always put their client first. Isn’t that most people want?

As a Realtor, we have a formal code of ethics that we are required to uphold and it reads: “Article 1 – When representing a buyer, seller, landlord, tenant, or other client as an agent, Realtors® pledge themselves to protect and promote the interests of their client. This obligation to the client is primary, but it does not relieve Realtors® of their obligation to treat all parties honestly. When serving a buyer, seller, landlord, tenant or other party in a non-agency capacity, Realtors® remain obligated to treat all parties honestly.”

So maybe the focus for you buyers out there should be to work with a Realtor, someone who starts and ends their business dealings pledging their allegiance to ‘Article 1.’ And if that person does, but happens to also be the listing agent, you’re probably in good hands. But do your homework and ask the right questions.

Kim Murphy can be reached at [email protected] or (760) 415-9292 or at 130 N. Main Avenue, in Fallbrook. Her broker license is #01229921, and she is on the board of directors for the California Association of Realtors.

 

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