Do I have to use the agent who shows me the home?

Jul 23, 2019 7:58:00 PM / by Mark Gorman

Many buyers wonder if the listing agent of a home they are interested in will show the home to them. The answer is "yes", as the listing agent is obligated to show his or her client’s home. A listing agent is hired by the seller to work 100% for the seller’s best interests.  

Additionally some buyers wonder if they can save some money by going directly to that seller's agent to buy the home. On the surface, the thought of cutting out the "middleman (a buyer's agent)" may sound like a way to save time and money. While it may save time, the buyer will NOT save money on that specific purchase transaction.

What many potential buyers DO NOT realize is that the buyer’s agent commission is determined by the seller. The listing-side AND buyer-side commission is set once a property is listed with an agent. The seller negotiates the total commission they will pay for the home to be sold which includes the portion to be paid to another "buyer's agent" if he/she represents the buyer in the transaction.  

Sharing of commission is called cooperating, or a co-op commission. This is a practice which is somewhat unique to the real estate industry, which actually encourages competing salespeople to cooperate and share commission to consummate transactions.  

If the listing agent also represents the buyer on the same transaction, he or she will get both sides of the commission. This means the agent will receive both the listing side of the commission and the buying side of the commission (also known as double-ending). In addition to the contractual obligation to the seller to show a prospective buyer the home, the listing agent also stands to experience an financial windfall from the prospective buyer.

If a buyer signs an exclusive agreement to work with the listing agent under dual agency capacity, he/she may be obligated to purchase the home through that agent. Additionally the listing agent will have a fiduciary duty to both the buyer and to the seller.  

In a legal setting, this type of practice is actually illegal. It is viewed by the court as a "conflict of interest" to have the same lawyer represent both sides of a case. Similarly it is highly recommended (and even legally required in some states) that a buyer work with a "buyers agent" to represent them in a real estate transaction. 

It is good to keep in mind that when you speak to an agent at an open house, call an agent for information from a advertisement or ask an agent to show you a home, you might be opening a can of worms for yourself if you don't intend to buy a home through any of these agents. Your best bet to avoid potential procuring cause disputes is to be upfront with each real estate agent you talk to. 

Topics: touring homes, buyer's agent, commission, listing, homebuyers, dual agency, homes for sale, agency, listing agent, open house

Mark Gorman

Written by Mark Gorman

Co-Founder of HomeTraq. 30 years mortgage & real estate experience.

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