Agent Interference in a Real Estate Transaction
Why a Listing Agent Might Ask a Buyer to Use Her Own Agent
Buyers don't always understand what agent interference means or why they can't demand that a listing agent show a home and make the listing agent bend to their wishes. They wonder if the listing agent doesn't want to sell the home. But the fact is a listing agent's fiduciary relationship is to the seller, not to the buyer.
Contrary to popular belief, no real estate agents take orders from a buyer, particularly a stranger.
Agents are not waiting patiently at a buyer's beck and call. Agents are paid on commission. For the most part, agents are also independent contractors, which means they choose their own work hours and with whom they choose to work. Especially listing agents.
Why Won't a Listing Agent Show a Home?
As a seller, you might authorize your agent to show your home to anybody who calls and requests an appointment. In fact, some sellers feel uncomfortable using a lockbox and expect their agent to be there personally for each and every showing, which is not always practical and could result in lost showings.
There are logical reasons why an agent might not show a home:
- The buyer might not want the listing agent to represent the buyer.
- The buyer might not be qualified to buy.
- The buyer might be working with a different real estate agent.
- The home might already be in pending status.
- The agent might not want to represent more than one buyer for the home.
Questions Listing Agents Ask Potential Buyers
Agents aren't just being nosy when they ask a buyer questions. Sometimes, certain questions are mandatory, either by law, by practice or by the REALTOR Code of Ethics. Some are simply common sense.
First, understand that agents are not order takers. Buying a home is not like buying a car or shopping for shoes in a Neiman-Marcus catalog.
You can't pick out the color and style and slap the purchase on your credit card. There is agent protocol.
- Are you prequalified by a lender and do you have proof of funds?
Agents don't care which lender a buyer chooses or whether the buyer pays cash. But the seller will care. The seller doesn't want to take the home off the market if the buyer is not qualified to purchase the home. Many sellers require a buyer to submit proof of ability to purchase such as a loan preapproval letter along with the purchase offer.
If a buyer isn't ready to write a purchase offer, there is little point in taking up an agent's valuable time to show homes. Agents generally show homes to buyers who are in the position of being able to buy. Buyers who are not ready to buy typically attend open houses and do not call an agent to arrange a private showing. By the time the buyer is ready to buy, that home may not be for sale anymore.
Agents don't get paid to drive buyers around town. Agents get paid when a buyer is ready to buy, which is why they prefer to work with buyers who have a sense of urgency and are ready to whip out the checkbook. Their refusal is nothing personal.
- Are you working with an agent?
Agents ask this question because they are required to find out if the buyer already has an agent. If the buyer is already working with an agent, that agent could be guilty of interfering with another agent's client.
Especially if that buyer has signed a buyer's broker agreement with another agent. Because even if a buyer may want to change agents, the terms in the agreement may prevent them from doing so. Agents are not interchangeable.
Agents know that sometimes a buyer's agent might be on vacation or otherwise unavailable, so the buyer will call the listing agent to ask for an appointment to see the home. Procuring cause is a complicated situation, and there are no cut-and-dry decisions, but typically it's the agent who shows the home and writes the offer who is entitled to the commission.
If a buyer's agent is unavailable, buyers should call the agent's broker to find out who is available in the agent's absence. Sometimes the buyer's agent does not belong to the Board and cannot show homes without a lockbox key, and in that event, you might want to ask yourself why you are working with such an ill-equipped agent.
Although I personally do not like to practice dual agency, I always inform buyers who call for an appointment to see one of my listings that my team will be representing them if we show the home to them. Dual agency is not legal in all 50 states, but it is permissible where I sell in California. Sometimes, when I explain the situation to a buyer, their agent suddenly becomes available to show the listing. I never want another agent to say I or anyone on my team interfered with their buyer.
At the time of writing, Elizabeth Weintraub, CalBRE #00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.