You know the market is competitive, you’ve lost a bidding war or two, and then it happens – a hot new listing pops up that is right in your wheelhouse.
The thought occurs to you. “Maybe I should buy direct from the listing agent?”
First, let’s identify how often this happens.
The last time I checked about a year ago, the listing agent represented both the seller and buyer 15% of the time. Of the 163 closed sales in NSDCC last month, there were only 10% of the sales where the same agent represented both parties.
Why doesn’t it happen more often?
- Listing agents aren’t that comfortable with dual agency. The agents who don’t sell much (less than one a month) are already nervous about their ability to handle all the phone calls they are receiving, and are paranoid about mis-representing the seller’s interests. I just saw this happen where the listing agent was talking to a buyer right in front of me, and the buyer asked the listing agent to write an offer….and the agent declined. He told the buyer that he’d have to find his own agent to represent him, even though the listing agent gave the buyer the tour of the home by appointment, and talked about it for another 20 minutes.
- Sellers are paying attention. The listing agent can help you more when the sellers are uninterested (short-sales) or long distance clerks (REOs). Today, the majority of sales are with local sellers who are involved with the process and are pushing for a top-dollar sale. The listing agent’s ability to tilt the table in your favor is minimized.
- Both parties expect a discounted commission. Listing agents are reluctant to discount, because it looks and feels like two jobs with extra liability. If they don’t see enough benefit, they won’t do much, if anything, for you.
- The listing agent sides with the seller in bidding wars. They feel like their job is to be fair to everyone, and above all, represent the seller properly. If you aren’t going to get any favors, and in effect, be unrepresented, you might as well have your own agent.
There are times when I smell a scumbag, and will tell my buyer to go direct.
I have also won a bidding war when the listing agent had her own buyer.
There are so many variables that it is difficult to know when going direct to the listing agent will pay off, but it is much less likely when the seller is local and involved. If you work with me, and we detect a situation where going direct will pay off, I’m going to help you do it, and we’ll work something out on the side for compensation.