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Dual Agency- feeling uncomfortable...
What your opinions on an agent acting as a dual agent? We just dropped our price like I posted last week hoping to drive some offers (since we had a deal fall through and one offer that we just couldn't reach an agreement with.) It's difficult to find qualified buyers since our building is in litigation with the developer to get some repairs done in the common areas. Our agents felt if we dropped the price to what they suggested (basically our bottom line) we would generate multiple offers. We did what they said since we do need to sell soon or lose our new place. After the open house we had an offer come in right away and several return buyers who had previously viewed our place and verbally suggested they would be making offers (but they haven't come in yet. This could be because we are requiring people go through a pre-qual process with a lender that can fund our building with the litigation). Well, turns out the one offer that came right away comes from buyers who don't have an agent and now our agents are representing them as well. I know in our contract it says they can act as a dual agent but it makes me uncomfortable in this situation because this is our last push and I feel they have incentive to try to make this deal go through (so they get the double commission) rather than really push for these other people to get their offers in which is what was the goal in doing the big price drop.
I really like our agents but this situation makes me feel like they can't possibly have my best interest first now that their own interest comes into play as well. That being said, we need a sale so we are going forward negotiating with the buyer but still hoping to get other offers in. Also, I talked to our agents and asked if they could credit back a percent of the buyers agent commission because they are representing both sides (and it would enable us to settle at a slightly lower price and not worry as much about trying to get another offer). They said it can't be done because it's their agencies policy (Clodwell Banker). Is that really true? I feel like everything should be negotiable...
Re: Dual Agency- feeling uncomfortable...
Ugh, I don't like it but if they came through an open house I don't know if there is much you can do. I'm a suspicious person by nature, but it seems strange that the one offer came in so fast.
My agent works for Coldwell Banker, but in PA. I know that here, they get the broker to make concessions (throwing in a home warranty or something like that) OR they take it out of their personal commission. In the house we're buying, the listing agent is taking the money to fix the window seals out of her commission. I remember what your place is priced at and your agents are looking at a pretty big payday if they close this on both sides. If they're also getting commission on the place you're buying, holy cow.
That said, you're in a crappy situation where you have to be your own advocate. If it were me, I would express my concerns so that they know you're on alert for any funny business. I would have them communicate to other interested parties that you will be reviewing offers on (date and time) so that they know to get them in. I'm assuming you're paying 5% commission and I would ask them to lower that to 4% if you go with their client.
You can always call the office and ask to speak to the managing broker to discuss your concerns. They might be able to work something out to make you happy.
I wouldn't worry about it honestly. Depending on your state's law on dual agency they might be more obligated to help you than the buyer regardless. Another point on this, it is in their advantage for you to sell higher so I really wouldn't feel uncomfortable. And yes, they do really want the deal to go through but you should too.
As for the commission, your agent is doing double the work and deserves the commission. You wouldn't ask your hairdresser to change her rate if she shampooed your hair vs her assistant. Your agent has to guide the buyer through the sale, assist them with financing, home inspection, calming their fears, nswering their questions and calls, etc. It is alot of work. You were fine paying this commission to another agent so why should it matter if it ends up being your agent. The same work gets done. You had to have been also fine with the price since you accepted it instead of waiting for the other offers so, my suggestion is to be happy you have an offer that might go through and you can settle.
A couple thoughts:
1) Real estate agents live and die by referrals; they're not trying to screw you - they'd be out of a job in an instant.
2) Their own interests are always a factor - they only get paid when there's a sale.
3) Do a little math on what the difference in sales price means to them. If you sell for $150k instead of $158k, the difference in their commission is just $480. ($9000 vs. $9480). Do you really think they'd risk an ethical violation, a dissatisfied customer, and their career for $480? The difference is even less when you consider the significant chunk (as much as 2/3, depending on the agency) that the managing broker and firm will take out of their commission.
But that's not to say there aren't snake oil salesmen out there. Sit down and discuss your concerns openly with your agents. Contractually, they're obligated to help YOU.
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sit down with your agents (or call, if you can't meet in-person soon enough), and go through each of your concerns. if, after speaking with them, you're still not satisfied, go talk to their broker. on the coldwell banker commission thing, ask their broker.
we ended up in a dual agency situation (seller's agent was our agent's friend and both work for the same brokerage), but it ended up fine. both agents did not hesitate to answer questions or concerns we had about the dual agency, either.
I think you misunderstood my concern. Using your numbers, you are right that 150K or 158K isn't that big of a difference on commission IF they are only getting sellers commission. However, if they have the choice between doing a dual agent sale on a 150K offer vs just sellers agent on a 158K offer, they get way more money by pushing the 150K offer because they get double the commission on the that offer and they don't for the higher offer.
I'm worried they aren't encouraging other people to really get their offers in before we have to make a decision on the current offer because they want to get both commissions if we make a deal with these particular buyers.
They are getting commission off the new home we are buying once we sell too so they are making like over 40K off us! It just seems like a ridiculous amount and I don't feel comfortable with them acting as dual agent and potentially not trying to get higher offers in because those higher offers actually mean less commission for them since the buyers we are waiting on (that are supposedly potentially writing offers soon) already have their own agents.
Just wondering, but how close to asking was the offer?
I'm also wondering if you can point out to your agents that you did something they told you would work, and it doesn't appear to be turning out in your favor. Maybe it would motivate them to be more aggressive with the other potentials?
It's not terrible, about 13 grand off. But, we already had dropped to below what we ever planned on selling for (the comps are really in our favor, it's just the litigation issue mainly...) We were also appraised for a lot more than our list price less than a year ago when we did a refinance (that was before the baby when we didn't realize we would outgrow it so fast and planned to stay for awhile) We just countered down 5 more and I don't feel comfortable going any lower than that so hopefully they will accept. Our realtors felt confident we should get list price if we dropped to what they suggested and we do still have a few offers potentially coming in but I feel like our realtors may not be pushing those people to do their pre-quals quickly with the lenders we need to see etc because they are trying to push this current deal along... Like they have some return people who want to come back in and they scheduled their showings for later in the week and the weekend... maybe that's the only time those people can come, I don't know, but we have to make a decision on the current offer now - they haven't given us until the weekend. I feel like if this offer wasn't a dual agency offer maybe they would be pushing some of these other buyers who have shown a lot of interest to get in now rather than waiting until the weekend to return...
If they take our counter I'll be happy even though its less than we wanted but we can do it and it will put us in our new home. But, I'm not happy with the situation because I feel like now our realtors aren't working only for us anymore and I don't like that. I really like them and have been very happy with them and wouldn't be bothered by them acting as dual agency except for the fact that with the timing of the price drop and all the activity we had at the open house as a result- I feel like there are potentially other interested buyers who may not be getting as much motivation to move forward from our agents because it's in their benefit to work with these people.
Yep, you're right, I did misread you on the 3%/6% thing.
But my advice, and the advice of at least one other person I saw in the thread, still stands: talk to them. You've spent a great deal of time typing to us what you should be telling them.
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I would also be bothered by the fact that your agents told you it would be a very competitive price if you dropped, but then they can't communicate that to their own buyer? I would almost feel like their were capitalizing on their knowledge that I was desperate to sell.
If they counter you lower than the 5, I would counter them back at your current asking price and tell your agents that they said you could get that price, you want that price.You could also try just not countering and saying that the buyers need to submit another offer, I've seen this done before and it's nice because it means that you're not "stuck" in a negotiation. Another buyer can come along at anytime with a better offer and it might push these people to up the ante.
Also, if you're currently in negotiations your agents could tell other agents that and it might dissuade other offers. We liked one house a lot but didn't offer on it because it was already in negotiations and we didn't want a bidding war.
It's all a mind game and if you make your agents think that you've completely gone rogue, they're going to do anything they can to close the deal quickly -- including telling the buyers to pay your very fair asking price.
do not play games like some others have suggested before having a very frank, calm, straightforward conversation with your realtors with everything you've noted here.
despite my own good experience with dual agency, i know not everyone is as honest as the agents i worked with. being wary is fine, and it's good that you are. now get your fears allayed by getting informed and laying it out on the table.
it's a lot like dating. you can take the mind games, drama route and stress yourself out and potentially ruin a decent relationship. or you can save yourself and your partners in this whole transaction a lot of grief by honestly explaining where you stand, your fears, and giving them a chance to give you what you need. if they can't, then it's totally fine to move on or take an offer from someone with a different agent.