I’d think it is a conflict of interest. If there are multiple potential buyers, wouldn’t they tempted to help the buyer they represent win the bid? Their commission from the seller is secured already.
Not quite the same situation, but we once had a real estate agent working for us (as buyers’ agent) that was “not available” when we asked to set up an appointment to see a home of interest. Different times, but homes were still selling fast. It was rare that he did not call back in a timely manner. A few days later, we learned, another buyer saw the home, and made an accepted offer with that same agent. Last time we used him.
When we sold our house last week, my realtor did have people she represented who came to look at the house. She told me that had one of them been interested in making an offer, she would have had a co-worker represent the buyer - she would not do it herself.
If I really want to buy a certain property, I contact the listing agent. They are highly motivated when getting dual commissions. I know I probably won’t get the best deal, but in a competitive market, I’ll have a much better chance of getting the deal.
Once, we saw a short sale come up near us. I called the listing agent and he met us at the property immediately. He wrote up an offer for us, called the seller, who accepted, and it was pending on the MLS in less than an hour.
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In my state, dual agency is technically illegal. What may happen is that the Broker acts as an intermediary, meaning the Broker simply facilitates the transaction, but advises neither party. Far more often, the Broker assigns one of its agents to represent the seller, and another completely different agent (within said Brokerage) is delegated to represent the buyer. These agents act in the interest of their assigned clients.
This can nevertheless be a slippery slope, because at the end of the day, it’s in the interest of the Broker to get the deal closed and collect the entire commission.
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Depends on the State law. (Legal in most states)
That’s how DS bought his house. We didn’t have an agent and did all legwork ourselves. Found the property that was being refreshed while waiting to go on a market and contacted a selling agent. Of course she liked getting double commission so it did give us an edge over others. It’s not illegal in our state
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This is why this practice is illegal in 8 or 9 states. The listing agent has a fiduciary to get the best possible deal for the seller, even if the best offer is made by a buyer with their own representation (from a different brokerage). Giving a buyer with no representation “an edge” so that they do not have to share in the commission is not putting the seller’s interest above their own. While it’s possible that the buyer without his own representation actually does make the best offer, that is what is giving this buyer the “edge” over others, not the fact that the broker is keeping the whole commission. Any scenario in which a buyer gets an edge over others simply by virtue of the listing agent getting to keep the whole commission rather than the actual terms of the offer is not adhering to the concept of fiduciary to the seller.
This practice leaves the whole thing open to shady behavior on the part of the listing broker.
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Nowadays when all information is available to everyone online I don’t even know why would anyone need a buying agent.
Wouldn’t be shocked if the buyer was either a personal friend or a relative.
That’s really crappy of the real estate agent.
Is there anything one can do to protect oneself? If your agent brings a buyer, you can’t refuse.
In my neighborhood right now, which is inexplicably “hot”, folks are using buyer’s agents to knock on doors and ask the homeowner “what’s your magic number”.
The last five houses that sold were never officially “on the market”. The buyer’s agent does the legwork, it usually goes through as a “for sale by owner”, buyer’s agent gets half of what the typical seller paid commission would be, the buyer avoids a bidding war in a tight market if the property had actually gone on the MLS site.
I’m usually a proponent of “open” transactions as a way to ensure the best price… but I do see that listing with an agent can be SO painful (insisting on thousands of dollars to “stage” with trendy West Elm accessories and furniture, or having to replace appliances before the sale when the buyer is going to knock the whole house down) so I get why people want a shortcut.
In my state, in order for the Broker to act as intermediary with assigned agents to the seller and the buyer, the seller and buyer must each agree in writing to the arrangement.
Seems like that may be the case in some states that do allow dual agency.
Yes, but you can’t not sign if you need representation. It doesn’t protect you much.
If you have already signed with an agent who will be your listing agent, you absolutely can refuse to sign giving him permission to now bring in his own buyer. The realtor already has you as a client, so he is legally bound to that contract and to you as the seller. You can insist that the buyer get their own representation. This happens all of the time.
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They could assign an agent from the same firm to the buyer to keep the sales commission in house. A little better but still.
Would you let buyers preview your property before it goes on the market? What would be an advantage allowing it?
The sellers whom my sister bought her home from allowed her agent to preview before it went on the market, then she looked at it and purchased it a few days after it was listed. She flew 2,000 miles just to look at this house, and if the agent hadn’t liked it, she wouldn’t have flown out. The benefit to the seller is that they got a full price offer, close when you want to sort of deal, immediately. They could have taken their chances with the open market, but this was a deal in hand, immediately, no contingencies.
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Plus no headaches of constant showings. Important when there are pets in the house!
Our neighbors sold their house off market. It went in the MLS as pending immediately. There was no realtor sign anywhere! We learned about the sale when new neighbors showed up in that house. 
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We are listing below the market. My realtor is trying to start a bidding war. Everyone in the area sold their houses at least 20% over asking. And all within a week. The only person who got less than 20% over sold their house before it went on the market. They had a good reason. A family member was not well and much preferred not having to show.
I took a long walk thinking about this. I’d like to get 20% over asking like everyone else. I am willing to do the work for that and decided against the preview. A buyer won’t pay that much more without a competition. Of course, I may not even get the asking price. Will recalibrate when that happens.
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Kids are shopping for a house and report that bidding wars are slowing down here in my neck of the woods. 7.4% mortgage rates definitely cooled thing down. Houses that used to sell over ask now get one offer by offer review date. Just something to keep in mind.
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