Sunday, June 8, 2008

Working with the List Agent

Showing my properties or holding open houses I hear on occasion that people want to "work with the listing agent" exclusively, instead of engaging a buyer agent to work on their behalf. It always puzzles me, and since I am not confrontational I don't want to say "Why on earth would you want to do that?!" especially if it's the first time we've met.

My rationale is this: the listing agent has undertaken the responsibility of working for the sellers of a property. He or she has fiduciary duties to the seller: obedience, loyalty, disclosure, confidentiality, accountability and reasonable care. The goal is to sell the house at the price agreed upon by the seller and the listing agent.

I think buyers believe that part of that duty is for the listing agent to give inside information to the buyer about the property and "what the seller would take." This is precisely what confidentiality means. Should the seller say, "Let's list it at $150,000 but I only really need to get $140,000," this is not information the listing agent gives out.

If there are any material defects the agent is bound by law to disclose them, whether he/she is a listing agent or a buyer's agent. The sellers can't say "We buried the oil tank in the basement because it was leaking, but don't tell anyone." Or they can say it, but the listing agent must disclose it.

And that disclosure is part of the fiduciary duties and means that if a buyer walks into an open house and announces "We can pay $175,000 and expect to for a home," then the agent must disclose this tidy little tidbit of information.

The world moves too swiftly today for people to rely on their own resources. They need an agent advocating for them, and just for them. If they buy one of his/her listings, so be it. There's nothing wrong in my opinion with dual agency, if it is done openly and everyone understands the process. But going it alone without someone checking for homes, talking to other agents, knowing particular markets and the homes themselves can lead to frustration and paying too much for a home. The feeling then is frustration and anger - "She took advantage of me!"

Who sets the price for the home? Often agents - not this one - state with absolute certainty that the home is worth x number of dollars. Go ahead, fall in love with that number, roll it around on your tongue, see how it feels. I'll get you that price - watch me! And the game's afoot. I pity the poor lowly buyer who walks into a situation in which pride takes over the negotiations! "You can't offer that - it's worth so much more - it's worth x number of dollars, like I said!" ("And if it takes me three years to sell it at this price while the owner pays the taxes and insurance and mortgage, then it does - but I will get them that price!")

Is it the commission that buyers want adjusted, and think that will happen if the agent gets both sides, the listing and the buying? A $200,000 home means that 1% of commission is $2,000. For that amount of money, the buyer is putting him or herself at risk. And speculating on commission is not something that is openly discussed. Negotiate the price of the house - that's a lot more expensive!

So here I am, Sunday afternoon in the village - the quiet village - knowing that I have a listing going into the computer tomorrow and an agent out there who has confided in me that she might have a buyer for this type of property. She's a buyer's agent, working for her people, and she will get the first call before it becomes generally known. It's what a list agent and a buyer's agent do.