So this is a story, more than an ‘article’. It happened a couple weeks ago. Our family is looking into a larger home to upgrade, so I’m representing myself as the Buyer agent. I’m disclosing this because it does play a part in the story.
So my wife and I saw a house and decided to put in an offer.
We saw the house during an appointment and then came back during the open house when my dad was in town so he could take a look too.
The listing agent, let’s call her B so we can reference names. I told her that we’d be putting in an offer later in the afternoon and she mentioned that someone from the open house, who doesn’t have an agent was planning to submit too.
Agent B would be representing this potential Buyer as well. And she also was the listing agent representing the Seller. This is called multiple representation.
Side track…I know multiple representation happens, but I don’t like it because how can you be fair and represent and negotiate for both Seller and Buyer fairly? Agents typically do it because they get “double commission” or what the industry calls double-ending the deal because they get the listing commission and the buying commission (which is usually reduced in a scenario like this).
Knowing this, I was already behind in negotiations.
Prior to submitting my offer, Agent B lets me know that she is reducing her commission because of multiple representation, I ask what’s her total and it is 3.25%. The original total commission was 4.5%, meaning that she was getting 2% to list and offering 2.5% to the co-operating brokerage who brings a Buyer…which was myself.
So instead of getting 2%, if she represents the buyer, she would get 3.25% total. That in itself forces me to drop my commission to 1.25% to match that, so net net, the Seller would receive the same amount.
I hope that makes sense.
After submitting my offer, Agent B asks me if is there anything I want to improve before submitting to the Seller. I’m 100% sure that Agent B has already seen the other Buyer’s offer as well. Not a big deal in a case like this for me. I improve our offer to list price with no conditions.
After she presents, she gets back to me and says the Seller would like to work with the other offer. I’m disappointed to hear that, and then ask her what the price was, and she won’t disclose until the deposit is in…which is normal.
I then said to her that the other offer had better been significantly higher than mine because you didn’t ask for a second chance. She said it wasn’t that much over and you should always submit your best offer. So I got a little heated and asked why we didn’t get a second chance…then she comes up with an excuse that if I asked you to go up in price, and you did, then I have to give the other Buyer the same chance and it would have gotten out of hand…which is a lame excuse because isn’t her job as a listing agent to represent the SELLER’s best interest
Don’t you want 2 Buyers to keep bidding?
Typically yes. But in a case that she represented the other Buyer, she might have had a sense that her Buyer couldn’t go that much more in price or change their terms in the offer. But that’s my best guess, because in the end, it didn’t matter.
So what I found out was that other bid was $2,100 more than ours. WTF! So if another agent represented the OTHER Buyer, I’m 100% sure that she would have tried to give everyone a second chance, knowing that the prices are $2K apart and try to get more for her Seller…but she DIDN’T.
Because she represented the other Buyer and earned another 1.25% commission on the deal. So it was another $10K in her pocket instead of doing what’s best for the Seller to get another say $5K-10K or even more.
Process wise, she followed the rules to disclose everything etc. Moral ethics might be a different story, but that’s very hard to prove and not worth the fight.
So this Agent B…greedy or not? You decide.
Or my what my wife said when she found out how much they beat us by…she’s a B. lol sorry, had to throw that in, I thought it was funny.