I am interested in a house and contacted the real estate company online to schedule a showing. The real estate agent told me that the listing agent is an independent through the same company, but that I should not contact the listing agent directly, because they work for the seller not the buyer, and that they won't have my interests in mind. My reasoning for going with the listing agent is that the seller would have to pay less commission and may be more flexible with their asking price. I live in NC, if this matters. Was it ethical for the real estate agent to tell me that? and is it true? What should I do?
2006-11-28 04:06:45 · 5 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
It was very ethical for the agent to tell that their fiduciary responsibility was towards the seller. Real estate laws are different in every state. In many states Realtors can act as Dual Agents (equally representing both buyer and seller) but in some states the laws only allow an agent to work for one or another. When an agent works for both buyer and seller things can get sticky for the agent and some would just assume not put themselves in a potential litigious situation so they state upfront which party they represent.
The commission is contracted at the time the property is listed thus not going to change. Most of the time the comission is anywhere from 5-8 % with an agreement that if the buyer has an agent, the comission would be split between the Realtors. Occassionally there is a provision that if the listing agent acts as a dual agent he/ she will accept a slightly smaller commission (1-2% depending upon the listing contract), but since the agent has come forward to say he is only working for the seller, you know this is not the case.
Therefor, it is in your best interest to get a Realtor to solely represent you, whom will protect your interests as a buyer. Commissions are usually paid by the seller per the listing contract and split between each of the participating Realtors (rather than just the listing agent), thus it won't cost you any more to have an agent in your corner helping you through the process.
2006-11-28 05:04:27 · answer #1 · answered by linkus86 7 · 0⤊ 0⤋
Real Estate changes from state to state so my answer may be a little off but, should give you an some insight.
Once the home owner has signed with a listing agent to sell their property, the fee (money owed the broker/agent at closing) is established. That fee is a percentage of the sale price and, as a rule it won't change.
If your agent brings you in as a buyer, he will split that fee with the sellers agent (listing agent). Usually 6 or 7 percent, split with half to each agency.
If you are able to go straight to the listing agent and negotiate a purchase agreement, your agent gets nothing!
Your agent was right though, the listing agent does have a responsibility to the seller above all else. I believe it's called fiduciary responsibility. In essence, they are protecting the seller from scam and fraud while guiding them through the sale which, can get confusing at times. However, one agent can list and sell. But, think about it, is the listing agent going to work to make sure you get the best deal?
The real estate fee, usually called a commission is not a part of the sale price and almost always is paid by the seller but, it is negotiable. FYI: Most of us add to the price of real estate to insure their is enough to pay the real estate fees although most RE market analysis is based on inflating the price because of commisions... Confused?
2006-11-28 12:34:49 · answer #2 · answered by ggraves1724 7 · 0⤊ 0⤋
There is no ethical issue here. The agent you spoke to was only warning you that if you wanted an agent to repersent your interest, then you should get one. In any event, the listing agent can acts as dual agent for both buyer and seller so long as you are fine with that. Keep in mind that the agent is paid by the seller so at the end of the day, your interests become subordinate to the seller's.
My 2 cents.....get an agent to work for you.
2006-11-28 12:43:11 · answer #3 · answered by boston857 5 · 0⤊ 0⤋
The BROKERAGE is who is actually working for the seller or the buyer, etc. So if you called the listing COMPANY, the person you spoke with also works for the seller. I think the agent you spoke to wasn't trying to deceive you, but just doesn't fully understand representation.
The listing company can operate as (in some states - "dual agents") (in some states - "intermediary status") and lots of agents don't understand where their responsibilities begin and end within these. Probably the agent you spoke with will treat you as if he was your buyers agent, and everything will work out fine. (assuming no attorneys get involved anytime)
The right way to buy a house is to find a Realtor who you can trust, and have them help you find a house you like, help you negotiate for the best price and terms to fit your needs and keep you out of trouble.
A dishonest Realtor can hurt you worse than a dishonest auto mechanic, and a poor Realtor can too.
2006-11-28 12:57:11 · answer #4 · answered by teran_realtor 7 · 0⤊ 0⤋
as an Real Estate Agent, not in NC. it is definitely more ethical if you go with the person who got you interested in the house, this person should get paid for their work and effort, and take in mind that most houses are being sold with two agents, now, even though you have a separate agent, since they work in the same office they have a mutual interest to get this deal for you, and they might work something out in terms of commission, assuming that the listing agent doesn't have her own offers on the table, in which case she still has to present your offer, anyway back to square one, go with the person who showed you the house and stick with your morals so you gain in the long run.... good luck
2006-11-28 12:14:29 · answer #5 · answered by Anonymous · 0⤊ 0⤋