This point came up in my listing presentation this week. I don't show unrepresented buyers my short sale listing because of:
- Dual Agency
- Risk of reduced commission
What's your take on this topic? Do you address it with your clients upfront?
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I have 2 buyers agent that handle all showings. I receive referral fees to help cover my assistants salary expenses.
I tell Seller when listing I will not be showing your home as I only represent them in this transaction.
But I have agents that will show any interested buyer straight away. This has not caused reduced commission of any kind even being in the same office.
Sellers seem to like being up front and you working only for them.
Good luck.
Rare in our case to do dual representation because of dropped commissions, but Chase allowed 6% on dual! Never know what they'll say from week to week, so try it.
I don't think his main concern was about commission I think he was aking how do you handle it. How I have seen it handle was to have your broker take one of the positions.
Regardless, I think his question was answered. Some states do not allow dual agency, some do. If you are in a state that does not allow it, the answer is simple. If you are in state that allows it or in the case of Florida, we are transcation brokers that can list and sell in the same transaction. If it was not about commission, then why did he ask about risk of reduced commission? Just because you have both sides does not mean commission will be reduced and just because you use another agent to try to get full commission does not mean commission won't be reduced.
For me I want to do what is best for my customer/client.
I refer it out, so the lead is work out and worst case scenario I get a refer fee.
Marlene, why do you do it that way? Legal reasons?
Abvraham, here iln Connecticut Buyer Brokerage is law. However, you can work with an unrepresented buyer if and when you have him sign an Inrepresented Buyer Agreement. That means you do not represesnt him, i.e. there is no dual agency. How much the banks can reduce the commision depends on the mortgage the seller has. Generally, if you are the listing and selling agent, you should have that reflected ilndividually in the HUD-1..An alternative would be (and I have done that a cojple of times) to use your name for the LB lcommission and your broker's name for the selling broker's scommission. That should be reflected in the UBA as well as the HUD-1.
I rarely represent both sides. I give them to someone in my office that I feel will represent them properly.
I do disclose that I am a sellers agent when showing the properties. Being upfront with potential buyers has actually gotten me much farther than just trying to 'double side' the deals.
That depends. If your seller is going to have a tax burden as a result of the short sale, which could happen if the listing is an investment property, then your 1st duty is to get the seller the highest and best. If you truly are representing both parties, how can you help the buyer get the best price for them as buyers? Buyers needs are to get the lowest price, so you will have a conflict of interests in a case like that. Even if there is no tax burden and the price can be "advantageous" to the buyer, remember, the banks often will push the foreclosure process forward in parallel with the short sale process and if the buyer can't perform or the bank decides they would net more as an REO than accepting your buyer's offer, they can foreclose - which would be against what you were hired to do for the seller. I am sure if you think about it, there are a few more "what if's" that could create conflicts of interest - that is why Agency Laws were created.
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