RUSH: Question about Dual Representation in the sale of a house

[arivecchi]

We are going to receive a contract on our house today. The buyer's realtor asked whether we want to be represented by him as well. We were planning on representing ourselves, but would it be a better idea to have him represent both sides in the hopes of obtaining a higher price? Would that potential increase offset the increase in the commission (we would have to pay the buyer side commission anyhow). Need some quick answers as I have to decide soon. TIA!

[Momit]

We've had a couple of instances when we listed our house with an agent, and that agent has found the buyer as well. In both cases the agent has actually been a "team" of 2 agents (husband/wife etc.), so one person works with the seller and the other with the buyer. That way both parties have someone representing their interests. You do pay both sides of the commission (3% to buyer's agent and 3% to sellers agent or whatever the percentage is in your area). Sometimes they will give you a little bit of a break on the commission if the same agent or team of agents represents both sides.

[newg]

I would be careful.......we signed a contract with our agent and in it was some wording that implied she was our agent first and if she also found the buyer she would be our agent first and foremost and represent our interests ahead of the buyers......

Your potential buyers may have signed a similar contract with their agent.....so their interests would come first.......
I think the realtor would actually make more money if he represents both of you....
You might want to call another realtor office, and ask their opionion..

[vonfirmath]

We are going to receive a contract on our house today. The buyer's realtor asked whether we want to be represented by him as well. We were planning on representing ourselves, but would it be a better idea to have him represent both sides in the hopes of obtaining a higher price? Would that potential increase offset the increase in the commission (we would have to pay the buyer side commission anyhow). Need some quick answers as I have to decide soon. TIA!

You need to find your own representation. The buyer's realtor can not adequately represent both YOU and the buyer. In real estate, there are numerous issues where the interests of the seller and the buyer conflict. It is to the buyer's interest to get the lowest price possible, and to the seller's to sell for the highest. Etc. And then there are issues of things to be fixed, things to disclose, etc. And because they were with the buyer first, they will likely represent the buyer's interests.

[BelleoftheBallFlagstaff]

If you rep yourself as a FSBO, you are paying commission on the buyers side only. If you are going to pay commission to this person as a sellers agent, get an agent you want to represent YOUR needs. I wouldn't do it...

[Momof3Labs]

You aren't listed with an agent? If you chose not to list with an agent, why would you accept his offer and pay him the full commission now when you haven't gotten all the normal services of a selling agent?

I would not assume at all that you'd get a higher price this way. The buyers are going to pay what they are willing to pay and don't care what agent fees you have to pay. I can't see that they would be willing to pay enough more to offset his commission.

I sold a house once with an agent who wanted to do dual representation with the buyer that she found. But once that situation arose, I felt like she stopped representing me. It ended up being a pretty messy situation; I would never consent to dual representation by a single agent again. And I would never, like in your case, agree to pay a selling agent's commission to an agent who did not perform all the services that a selling agent normally performs! Sounds like a good deal for that agent, but that's about all.

[codex57]

Dual representation is a total crock. It really shouldn't be allowed, except it's sort of tradition in the real estate field and who would sue to outlaw it? Convenience wise it works, but that's about all you can really say about it.

I say this as a licensed real estate broker and attorney.

[boolady]

You aren't listed with an agent? If you chose not to list with an agent, why would you accept his offer and pay him the full commission now when you haven't gotten all the normal services of a selling agent?

I would not assume at all that you'd get a higher price this way. The buyers are going to pay what they are willing to pay and don't care what agent fees you have to pay. I can't see that they would be willing to pay enough more to offset his commission.

I sold a house once with an agent who wanted to do dual representation with the buyer that she found. But once that situation arose, I felt like she stopped representing me. It ended up being a pretty messy situation; I would never consent to dual representation by a single agent again. And I would never, like in your case, agree to pay a selling agent's commission to an agent who did not perform all the services that a selling agent normally performs! Sounds like a good deal for that agent, but that's about all.

All of this--100%. If you're doing it yourselves to save fees, having her represent you means paying her for doing not much at all. Furthermore, I don't believe for a second that you will get more; if anything, she's going to do whatever she can to make the sale, including convincing you to take less. I also don't know what the potential is for issues to arise at inspection, but I really wouldn't want dual representation at that point-- whose interests is she looking out for?

[BabyMine]

I will ask my mom but if I remember correctly, the reason he is asking is that his comission doubles.

[BelleoftheBallFlagstaff]

I will ask my mom but if I remember correctly, the reason he is asking is that his comission doubles.

Yep! He would get 3% or whatever is standard in your area, twice. So 6% for doing 3% worth of work. Dual Rep is illegal is some states. I used to be RA before my daughter, and even though it is fully legal in AZ, I never did it. I thought it was like getting a divorce, while using one attorney for both parties. You cannot represent everyone's best interest, it just doesn't work.

[bluestar2]

I would advise against it. GL

[shoxie]

We sold by owner a few years back with no realtors involved at all. If you're ok negotiating, then you might be fine without an agent - but make sure you have a good attorney. The attorney will be the one to protect your interests. Realtors can help with negotiations and they can help the process along by being on top of things; however, just because you hire a realtor, don't assume that things will go more smoothly. Some agents are much better than others. We've dealt with both, so think about it that way. You've done a lot of work already in getting an offer on the table - do you really want to pay someone 3% extra (on top of the 3% you've agree to pay) just for bringing the buyer? I wouldn't do it. Get a really good attorney...

[arivecchi]

Thanks everyone. We are not doing it. Dh and I are both lawyers and we will have a re atty help, so I think we should be ok. You all confirmed that this would be a bad idea anyhow!

[niccig]

Congrats on getting a contract. I know there's still a little way to go until the sale is final, but you're one step closer and I know how you've worried about selling the house.

[kijip]

When we sold a house (we inherited it, never lived there), it was from a distance and we had never done anything real estate wise. The listing agent sold the house to family that was his wife's client. We got no advice on the fact we could have countered their offer etc- they were getting the full 6% so it was not in their interests to educate us at all...they got more from an offer where they were to the only representation than from a higher offer from a different agent. Hindsight, we should have not been so quick to accept the offer, likely would have been able to get them to come up by a bit.

Dual representation sucks. Don't do it. Get a RE attorney to handle the paperwork for you if need be, but don't let this guy get a double commission off you!