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What’s the big deal with a buyer calling a listing agent to see a listing?

By: Kari McCoy
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Question:

Dear Kari,

My husband and I just recently decided to stop throwing our money away on renting. We decided to take the plunge and become proud homeowners. We have hired an agent that we feel comfortable with. However, we also have called some of the listing agents on the for-sale signs and had those listing agents show us their listing. The problem came when one of these listing agents called us back to find out if we would like to make an offer. We said that we will be discussing that with our agent. At that point the listing agent became extremely angry on the phone. My question is, isn't it the listing agent's job to show their listing?  

 

Answer:

To answer your question in short, yes, it can be one of the listing agent's jobs to show their listing. Now we can take a more in depth look at this situation. In California, agents are allowed to practice dual agency. In short, this means an agent is allowed to represent the seller and also the buyer in the same transaction (this is just one form of dual agency). With this thought in mind when you, the buyer, asks a listing agent to show you their listing, they may assume you are going to write the offer with them. In this situation, it means the agent will receive the listing side of the commission and the buying side of the commission. This is what is referred to as double ending commission.

Now that the listing agent has showed the home to the buyer, this can be a sensitive issue. The major problem in this situation could be referred to as procuring cause, in which the agent who ultimately caused the buyer to purchase the home. This is when commission disputes may arise.

In the event you like the home the listing agent has shown you, and you write an offer with your own agent, then the listing agent will now only receive a commission on the listing side. Next the listing agent receives an additional offer from a completely different agent that followed protocol and took their time to show the property to her own buyer. This offer may look better to the sellers and their listing agent. Keeping in mind that all agents are human and no one likes to feel used or taken advantage of by a buyer or anyone. Now the sellers have two similar good offers setting in front of them, perhaps the listing agent shares with the sellers how both buyers came to view their home. In some cases this may tip the charts in favor of the buyer's agent who showed the home themselves. 

Another thought is the listing agent is the homeowners’ biggest advocate and contractually obligated to get the sellers the most money with the best terms for their property. For example, when the listing agent is showing you their listing usually folks will chat with the agent even if it is light. In this event, if the listing agent gains some important information such as you can actually pay more than the asking price, this could actually work against you.

Listing agents are responsible for communicating anything and everything they learn about you to the sellers.

To be clear, there is nothing wrong with asking the listing agent to show you their listing, however it is in everyone’s best interest to be upfront with the agent if you will not be writing an offer with them on their listing, then they will not be expecting a dual commission.

 Kari McCoy owns the Kari McCoy Group, at Lyon Real Estate. She can be reached at 916-933-5274 or sold@karimccoygroup.com. #00841588