What's the Problem With Calling a Listing Agent to See a Listing?
Question: What's the Problem With Calling a Listing Agent to See a Listing?
A reader asks: "We saw this house online and fell in love with it. So, we called the listing agent and went to see it. She asked us if we were working with an agent and we said no. We called her again a few days later to show it to our parents. Now we want to buy the house and found a different agent to write the offer for us. Our new agent said we should not have called the listing agent. I don't see why not. What is wrong with calling a listing agent to see a listing?"
Answer: In states where agents are allowed to practice dual agency, when you ask a listing agent to show you that agent's listing, the agent figures you are going to write the offer with her. This means the agent will receive the listing side of the commission and the buying side of the commission. The agent gets both ends. That's why it's called double-ending.
When the Listing Agent Shows the Home
This is a sensitive issue for many buyer's agents. The main problem is procuring cause. Proving procuring cause can be a long, complicated process, but agents who sue over procuring cause are typically the agents who first showed the home to the buyer.
In California, like many states, you have the right to choose and consent to the type of representation that you want. You can hire:
- A seller's agent (and represent yourself)
- A buyer's agent (who will represent you)
- A dual agent (who will have a fiduciary duty to both seller and buyer)
If you have signed an exclusive agreement to work with the listing agent under dual agency capacity, you may be obligated to purchase the home through that agent.
Answering the Question: Are You Working With an Agent?
If the listing agent shows you the home, the first thing an agent should ask you is whether you are working with another agent.
Here are examples of the best way to answer that question:
- No, we are not working with an agent at this time, but when we are ready to buy a home, we will find a buyer's agent to represent us.
- Yes, we are working with an agent.
- No, we do not have an agent. Would you consider representing us?
Writing the Offer With a Buyer's Agent After Seeing the Home With the Listing Agent
This is where it gets sticky. First, the listing agent will see your name on the purchase offer, and will know who you are. This is not likely to sit well with the listing agent because the agent will feel as though she was used. Agents do not work for free.
You might ask, "Isn't that her job -- to show her listings?" Yes, an agent is obligated to show her client's homes, but if you are working with another agent, typically your agent will show you the home.
To compound the problem, let's say there are two offers on a home. Which will get accepted? Will it be your offer or the other offer from another agent? Listing agents tend to orchestrate offer acceptance.
If the listing agent is peeved at you -- and at your agent for "stealing you" -- your chances of offer acceptance many suffer.
Think about it. It takes a smooth-talking, fast-thinking buyer's agent to iron out this tiff with the listing agent and gain that agent's cooperation at this point.
The Upside of Letting a Listing Agent Show You a Listing
There is a positive aspect to looking at a home with the listing agent and that is she may tell you more about the property than she will disclose to another agent. She might even slip up and tell you if the seller will accept less, which is against the law in most states.
Just be upfront and let the agent know whether you intend to work that agent. Don't make the mistake of leading the agent on, regardless of how unintentional, because it can come back to bite you.
At the time of writing, Elizabeth Weintraub, BRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.