Author Topic: Is this normal?? Agent running open house turns out to be a "buyer's agent"  (Read 1862 times)

Penelope Vandergast

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Hi all, I just had a kind of baffling discussion with a real estate agent who I have been assuming for 2 weeks was the seller's agent since she was the one who ran the open house and who has shown me the property twice since. The house is overpriced at $275K, the sellers are extremely anxious to unload it, and she just urged me to make a $245K offer. (I think it should be more like $220K, but that's another story).

Just now she asked me to sign a buyer's agent agreement and I was like "Wha? You're not the selling agent? Then why are you the one trying to sell me the house??" (I do admit that I was little confused as to why the seller's agent was urging me to offer $245K) She said something a little incoherent & mumbly about how much she loves doing open houses because then she can meet possible buyers (I think she was in the agency office where other people could hear her). I didn't really get the relationship between her and the listing agent.

When I asked "But why am I talking to you and not the seller's agent?" (who is in her office) she said "oh no, you wouldn't be talking to them directly."

I have done 2 FSBO sales, and only one sale with an agent representing me in another city. I am now in a new city, and also new to using real estate agents, so maybe this is just something I don't know about, but I admit to being totally baffled by this.

Why the heck would a buyer's agent looking for clients run an open house and not the selling agent? Why is a buyer's agent now contacting me all the time about how I really should make an offer sooner rather than later, pushing the great neighborhood, giving me remodeling ideas, telling me I have an emotional connection to the house now etc etc?

I like the house fine but I'm not in love; the house has been on the market for 40+ days in a normally hot market, price has been reduced once and apparently is going to be reduced another $10K soon, zero offers. There are also a couple of weird things about it that could be fixed in the future but which make it hard to sell now. I am the only person who is currently showing interest and if I don't get it, it will be totally fine. (If I do make an offer it will probably be in the $210-$225K range. Agent keeps telling me how desperate sellers are, and my numbers show that this is where it really should be priced; there are almost identical comps across the street and next door.) So from my POV there is no rush.

I actually like this agent a lot (even though she is a bit new to the business), and I was indeed getting confused as to why she seemed to be thinking of things that were good for me, like making a low offer, at the same time that she was trying to get the best deal for the owners. (Hmm, which is maybe exactly what she is doing; sellers are deluded about current asking price)

But I also have some red flags going up at the idea that the buyer and seller's agent work in the same office. I really don't get how that is supposed to help me.

(I do admit to being skeptical of the whole idea of buyer's agents after selling my house a few months ago in a hot East Coast market. From my POV, the buyer's agent made a pile of money -- out of my pocket -- for doing next to nothing, and from the buyer's POV the house probably went for a bit more than it should have. So I dunno.)

Any opinions? Thanks!

GizmoTX

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Your instincts are correct. You need your own agent, found independently, not someone you met at an open house. She's selling, regardless of the label she's using. A true buyer's agent looks for multiple properties that fit your criteria, & negotiates the best deal once you've found what you want. That isn't going to happen if she's cozy with the listing agent.


Penelope Vandergast

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Thanks. Yeah, she just urged me to make an offer now, and discouraged me from looking at other properties (though if I really wanted to see them she would take me). So. Too bad, I liked her.

Carless

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The more money the house goes for, the more she gets.  This woman does not have your interests in mind.  Also, you aren't required (legally) to sign an agreement binding you to the same agent for months.  That's just something they want you to do.  Lots of people who have been burned by that one.

soupcxan

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This is why I hold realtors in about the same esteem as used car salesmen.

Penelope Vandergast

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I told her I wanted to hold off on signing a buyer's agreement and she was not happy. Said that she is an independent contractor at Smith Realty and that her agency has hundreds of independent contractors -- so it's impossible that there wouldn't be Smith agents on both sides of the table at some transactions. That does seem possible, but. I still feel weird about it.

Any real estate agents here who want to chime in? I mean, it's not crazy that I assumed the realtor at the open house was representing the sellers. A few days later she did bring a contractor over to walk through the house with me for an hour discussing potential renovations...but again that seems like something a seller's agent might do, not a buyer's agent.

I did make it clear before this that I was in the early stages & didn't even have a pre-approval, and that I didn't want to waste anyone's time -- but that sure, I'd walk through with the contractor just to see what he said. Contractor was her idea. So it's not like I'm presenting myself as someone who is dying to pull the trigger.

(and yes, I would bring my own contractor over as well to take a look, if I was really serious about buying : )...




patchyfacialhair

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Trust your gut. Find another buyer's agent and/or consider moving on to a different house.

Miss Piggy

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In my area, here's one frequent scenario:

- Sellers contract with seller's agent to list the property. Property is listed.
- Seller's agent schedules an open house...or rather, schedules several open houses on the same day for several properties she is representing.
- Seller asks for "volunteers" (and yes, they are pretty much donating their time in hopes of picking up a client) to host the open house(s) for her.
- Buyer's agent volunteers to host the open house; while she's there, she hopes to connect with potential buyers who do not yet have their own buyer's agent, and things could progress from there.

Another Reader

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I would never sign anything that entitles an agent to represent me exclusively as a buyer.  I work with agents that represent buyers, but they have to trust that they will sell me something.  If they do not represent me adequately, I move on.  In your shoes, I would talk to a number of agents and work with someone that does not push you to sign an exclusive representation agreement.

SwordGuy

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You have a very hungry for business buyer's agent.   That's all.   Nothing unethical about what you said they had done.  Annoying and pushy, perhaps.

We've bought 5 properties from the same realtor as our buyer's agent.

Duties included getting various parties to get their stuff done on time for the closing, meeting with the locksmith after the closing to change the locks, letting various tradespeople into the property so they can provide us estimates, etc.   In short, with both of us having day jobs that aren't conducive to conducting personal business over the phone or email, the tasks she's done to move things forward have been worth every penny.

One of those properties was bought on auction and we didn't actually need her services at all on that property.   I put her name down on the auction bid as our buyer's agent because, under the terms of the auction, it wouldn't cost us a dime either way.   She got a free commission and we got a more loyal realtor and plumber.  (The plumber is her brother.)   It pays to take care of honest, capable people you do business with.  That favor will come back around.



lhamo

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In my area, here's one frequent scenario:

- Sellers contract with seller's agent to list the property. Property is listed.
- Seller's agent schedules an open house...or rather, schedules several open houses on the same day for several properties she is representing.
- Seller asks for "volunteers" (and yes, they are pretty much donating their time in hopes of picking up a client) to host the open house(s) for her.
- Buyer's agent volunteers to host the open house; while she's there, she hopes to connect with potential buyers who do not yet have their own buyer's agent, and things could progress from there.

This is common in our hot market, too -- good sellers agents will often have multiple listings and they can't be at all the open houses during peak showing periods at one time.

Having a buyer's agent is not necessarily a bad thing.  Here in Seattle the seller typically pays both the seller's and buyer's share of the commission.   
Wherever you go, there you are

branman42

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Any real estate agents here who want to chime in?

I just obtained my real estate license over the summer (to be a better investor, not for a career). I constantly receive invitations to host open houses for other agents.

Basically, the seller's agent is getting free labor to run the open house, while the other agent hopes they get more business. Also, sometimes people do not want to use a dual agent (representing both the buyer and seller) so they will go to another buyer's agent, even though the seller's agent was doing the work.

It is not a problem that they are in the same office, it is better than just talking to the seller's agent. However, if you don't like her, feel free to move on to a different one.

ixtap

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I sell boats, not property, but similar rules than California. Buyers always assume that agents want the highest price for the commission. From my perspective, I just want the deal to close. If I can close this one today so that I can focus on another one next week, that is way more important to me than getting a slightly larger commission. Plus, happy customers are more likely to come back than customers who think they have been taken advantage of.

secondcor521

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What Miss Piggy said is typical here too.

It seems to me that new agents typically are the ones doing the open houses because they need to build a client base.  Newer agents can also be a little pushy or aggressive because sometimes they're just starting out and need to start generating income for their household.

Around here, a buyer's agent is obligated to get the best deal for the buyer.  So in this case, if the agent knew something about how desperate the sellers were, she would be obligated to tell you.  Like "Hey, I know the sellers bottom line is $223K."  It sounds like the agent you've got isn't doing that; it sounds like she is more of a dual agent (where she is not obligated to get the best deal for you).

If you feel comfortable negotiating on your own, you could consider dropping this so-called buyer's agent and going directly to the seller's agent and working with him/her.  When an agent is representing both sides of the deal, they can sometimes (often?) be persuaded to reduce their commission in order to make a deal happen.  I've found that the fewer agents between me and the seller results in faster, easier, lower-priced transactions.
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Penelope Vandergast

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I totally get that the agent at the open house might not be the listing agent, and that she might be looking for clients to represent for other houses. That seems completely normal and fine to me. In fact I was thinking about signing with her as my buyer's agent for a month or so, in order to look at other houses and get some realtor insight. 

The thing here was that she clearly had direct contact with the sellers of the open house property, knew a ton of details about them (including some personal stuff that she maybe should not have told me), said she was going to have to sit down and have a discussion with them about the price, and so on -- which are all things the seller's agent does. As far as I know, the buyer's agent does not have direct access to the seller, and she clearly was in frequent communication with them. Since I was thinking seriously about making an offer, I was actually at the point where I was thinking about other agents I knew and whether I should ask them to become my buying agent for the property.

It was only after all this that she wanted me to sign to have HER be my buyer's agent for the open house property. During that phone call, which was still friendly, I expressed my confusion that I had thought all along she was representing the sellers. A little while later she emailed me asking for details about names for the buyer agent agreement, but by then I was feeling weird about it and so told her I was very sorry about the miscommunication but I was uncomfortable signing with a buyer's agent from the same office as the seller's agent, and that if I made an offer it would either be with an independent agent or else I'd just do it on my own.

Instead of attempting to bridge the gap, she said frankly she was very taken aback by my message and sent me a 10-paragraph cut-and-paste of state realtor rules. A few minutes later she sent me the buyer's agent agreement!! with a brief note stating "Please review and follow directions as necessary."

At that point I considered our relationship over. I mean, I had just told her that I wasn't interested in the agreement anymore -- and her response was to express anger and then send it to me anyway and instruct me to sign.

She's only been an agent for a year, so maybe it's possible that she just needs some communication practice. It's also possible I just didn't get the whole buyer's agent thing. But I don't think it was wrong for me to assume she represented the sellers when she told me several times about her direct conversations with them! I mean I suppose she may have meant the listing agent's conversations, but it was still clear that she had close contact with the sellers.

As far as I know, the buyer's agent negotiates with the seller's agent and not with the sellers themselves, unless they are FSBO. But if I am wrong set me straight!

ixtap

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It is not unusual for an agent to represent both the buyer and the seller. However, she should be able to articulate this clearly if that is the case.

Penelope Vandergast

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I just looked at the agreement and it clearly states that she is representing the buyer only. I wish she would have clarified her position sooner -- it would have been OK with me if she had been representing both. At least she only wasted about 3 hours on me. I wish her luck with the next person.

cheesecat

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I found my buyer's agent realtor through an open house (for a house she didn't rep; she was doing the open house as a favor for another realtor) - I didn't offer on that house, but did like the lady, so kept her card. That's one reason I go to open houses; to meet agents and see who I'd want to work with when the time comes. You can tell pretty quickly who knows the area and who is clueless :)

But this realtor seems pushy and not working for your best interests: trying to browbeat you into signing with her, pushing you to offer on one house instead of wanting to show you several and find the best fit for you, etc. And yeah, that contract rudeness would be my reason for not working with her. They do tend to get territorial and feel slighted if you see the property with them and don't use them to close the deal, but there are better ways of handling it. Too many red flags here, and I wouldn't trust her to do right by me. Good luck with your house (and agent) hunt!

LiveLean

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After buying my first house (here in Florida) in 1999, I found the whole experience so sleazy I went and got my real estate license in 2001. I've never worked in the business, though it's helped with my real estate knowledge and I dutifully renew it every two years.

One thing I remember about buying our house is that the seller's agent transitioned into a transactional broker once I told him that I didn't have a buyer's agent and that I felt comfortable with him. (Wish I could go back in time and facepunch 29-year-old me). What he did was legal and fairly commonplace here in Florida. I signed the transition to traction broker statement.

Of course, you might ask how an agent can possibly represent both parties objectively. That's the first question I raised in my real estate class. The teacher, longtime agent, of course, acted like this was the most ridiculous question ever. Several of the students around me looked as befuddled as I was.

Bottom line: Always have your own agent.

 
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iowajes

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I've always thought open houses were run by buyers agents looking for clients. 

That said, the only time I've sold a house we didn't use an agent, so I don't really know what a seller's agent does except process the offers.



And in the two times I've purchased houses, I have not signed a contract with my buyers agent until it was time to make an offer.

Car Jack

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The sooner you offer and that offer is accepted, the sooner she gets the money.
The more you buy for, the more she gets.

A couple fun facts from my personal history.

A real estate agent once told me that to make an offer that is more than 5% below asking is considered an insult.

My current house was listed for $380k.  I paid $226.5k.  I don't care who was insulted.  No, really....I don't.

Cwadda

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I will sign with a buyer's agent if they show me a house, and only for THAT house.

Cycling Stache

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The thing here was that she clearly had direct contact with the sellers of the open house property, knew a ton of details about them (including some personal stuff that she maybe should not have told me), said she was going to have to sit down and have a discussion with them about the price, and so on -- which are all things the seller's agent does.

Interesting how experiences vary around the country.  Here in Florida we had a buyer's agent, and they split the commission with the seller's agent.  I doubt the agent told you "things she shouldn't."  Both buyer and seller agents get paid when a deal goes through, so they have an incentive to make things happen.  I suspect that many selling agents probably tell potential buyers (or buyers agents) that an offer below list, for example, might work to get the ball rolling if the seller is eager to sell, rather than what would seem like a true advocate position of my sellers will only take highest dollar etc.

It's kind of like being an attorney trying to get a deal done.  You're an advocate, but if a deal is in the best interest of your clients, it's often a good strategy to be reasonable, make reasonable concessions, and earn credibility that way.   Not everything has to be positional or antagonistic bargaining.

Of course, the flip side of this is that the agents do want to close, so they're always going to prefer that you go with this property if it's a good fit rather than go on a potentially endless hunt for houses.  That's the bias to be aware of.

dresden

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One thing I learned during the last hot market is that realtors play a lot of games.   For one a realtor in Florida is only required to tell you about offers not people interested in seeing your house.  Realtors would not let other realtors show a house until they exhausted options finding a buyer.  So some realtors will prioritize trying to get both ends of the sale vs getting the best price for the seller.  If they find a buyer they will convince the seller to sign an agreement they are representing the transaction rather than the seller.  After learning this when we went to sell we required the agent to he an open house and wouldn’t accept offers until the open house ended.  We also required the agent to tell us of any parties interested in seeing the House not just offers.

longforastache

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I just obtained my license in NC.  ALL agents are seller's agents absent an agreement with you.  An agent is not a "buyer's agent" unless you have an agreement with them.

zephyr911

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Realtor here.

Listing agents with plenty of business commonly farm out open houses to other agents. I'm not even a very active agent and I pretty much get an offer every week. Sometimes they pay a small flat fee, sometimes it's offered just for exposure. Either way, the main reason to take the job is to try to snag buyer clients.
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Penelope Vandergast

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Thanks for all the responses. Yes, I agree that it isn't at all weird for the agent at an open house to become a buyer's agent for whoever is going to that open house -- I guess I phrased the title for my post not quite accurately. Should have written "agent I thought was the seller's agent for a house turned out to be a buyer's agent and now I feel kind of scammed." : )
 

Penelope Vandergast

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I should add that in Boston, where I recently sold a house, I did ask our realtor what would happen if one of his buying clients wanted to buy a house he was selling. He said that in that case, he would not be able to advise them to do anything one way or the other, and that his job (as their agent) would only be to convey their wishes to me and facilitate any negotiation without actually getting involved in the negotiation himself from the buyer's side. I think there was a reduction in his commission too. It seemed like a very clear and straightforward response, which I respected.

MommyCake

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In that scenario the agent's commission wouldn't be reduced... it would double. I personally don't think there's anything wrong with dealing directly with the listing agent.  I have done that for two real estate purchases, and was very satisfied with the deal both times.

zephyr911

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Re: Is this normal?? Agent running open house turns out to be a "buyer's agent"
« Reply #29 on: November 29, 2017, 12:31:05 PM »
In that scenario the agent's commission wouldn't be reduced... it would double. I personally don't think there's anything wrong with dealing directly with the listing agent.  I have done that for two real estate purchases, and was very satisfied with the deal both times.
The law and the trade association rules on that vary by state and area. In AL, you can represent both sides of a transaction but you have to get written consent from both parties in advance or you can't do it. The term for it, at least here, is limited consensual dual agency - "limited", because you just can't fight for both sides of a transaction the way you might for one, and "consensual" because you have to explain how it works and get their consent to do it. It usually works out, but see "limited". There's no downside to finding another agent to take one side for you, and there are definitely things we can't or won't do as dual agents, that we would otherwise. It's highly dependent on the details of the transaction - best case, no impact, worst case, you get less help and don't save any money.

Since commission is set at the time of listing, and is already allocated to both buyer and seller's agents, if I end up playing both, I get the total (not necessarily, but most often, double) - unless of course the clients negotiate something different as a condition of dual agency.
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