Listing Agents Who Want Both Halves of The Commission

| | Comments (5)

I went out previewing properties a couple days ago. That particular client's situation being what it is, I was concentrating on vacant properties. But over half the vacant properties in that area had restricted showing instructions. "Call agent first," or "call for appointment to see."

When the property is vacant, there just aren't any common reasons to restrict showing. It's not like the buyer's agent is going to surprise grandma in the shower or even could make off with the big screen TV. If you're really trying to sell it, if it's vacant, it's empty, at least of your stuff, and the stager's (if there is one) had better be insured. If there really is some reason to restrict showings, it should be somewhere on that listing report. But I'm seeing this schlock on lender-owned properties, where there is exactly zero reason for it, at least as far as the owner is concerned.

What the listing agent is trying to do is control access, so that people like my clients have a gatekeeper. Why? So that they are more likely to be the selling agent also, and keep both halves of the commission. If the offer they bring in isn't as good, or isn't as quick (thereby costing the owner money), they still made twice as much or more in commission if they represent the buyer as well.

I strongly suspect that many agents - and yes, I'm keeping track of who, even though I'll never share it - play gatekeeper with offers as well. I send over an offer, and I never hear back. I call the agent, and am informed my offer was rejected, but I never see anything with the client's signature or even initials. I don't list many, but when I do, every single offer gets a written response, even if it's just "Offer rejected!" signed by the owner. It's illegal for me (as a prospective Buyer's Agent) to contact the owner directly to confirm that they know about an offer, or I would. I could really get behind a law that said I could send a postcard to the owner that says: "Dear Mr./Mrs. X. My client made an offer on your property recently at 1234 Name Street. If you are already aware of this, please disregard this notice. If you are not, please contact your listing agent about the details. If they cannot satisfy you as to whether you previously saw it, please direct all complaints to the California Department of Real Estate at XXX-XXX-XXXX." Boy would that be a good use for postage. Agents who did their job would have nothing to fear; agents who failed would be out of the business fast.

The motivations of the seller are to show that property as often as possible, to as many people as possible. No showing means no offer. No offer means no sale. Therefore, anything which is a nonessential impediment to showing that property should be dealt with, and agent restrictions are one of these. Believe me, I understand about not wanting client phone numbers in MLS databases, because the last time I had a listing decide they wanted to postpone the listing (therefore withdrawing it from MLS), they told me they got over a hundred solicitations from agents who ignored both the "do not call" list and the fact that I still had a valid listing contract at the time, which they didn't bother to ask about. It's illegal to solicit another agent's listing in California. If it wasn't, people who list their properties would be getting phone solicitations from 8 AM until 9 PM every day, and the junk mail would kill entire forests.

But the seller, whether they realize it or not, wants their property shown as often as possible, to as many people as possible. That's how you get get good offers, or even better, multiple offers that you can play off one another. Anytime you make it more difficult for anyone to view your property, you make it less likely they will view it, less likely they will make an offer, and less likely that it will be a good offer. The sharks out there don't care about viewing restrictions. They're willing to make their low-ball offers sight unseen, albeit with inspection contingencies. And even a shark's offer is better than no offer if you need to sell.

So how does a Buyer's Agent deal with problem personality listing agents? About the only thing I can do is not waste my time and most especially that of my clients on their nonsense. The only one with the power to deal with such antics is owner of the property. Just insisting that you want to see all offers isn't enough. How are you going to know? You can ask that instructions go into MLS for making certain that you get duplicates of all offers. E-mail, fax number, address, or even a PO Box if you have one. Buyer's Agents can't bypass the Listing Agent, but they can send duplicates if the MLS instructs them to.

Even better is to insist that the Listing Agent forswear the possibility of Dual Agency, or they don't get the listing. In other words, no matter what, they will not get the Buyer's Agent's part of the commission. As I have said many times, make them pick a side of the transaction - yours - and stick to it. The listing agent can refer buyers to another agent, or the buyers can go without representation - it's not your problem. Actually, as a seller, you would prefer that the buyer go unrepresented. Not only will you get a better price from the poor fool, you get to keep the Buyer's Agent Commission. But this way, the listing agent has no motivation to not present offers from other agents, and you can give them a flat $1000 to handle the paperwork so they won't shoo suckers away. You are perfectly within your rights, by the way, to make whether you are going to pay a buyer's agent commission part of your decision making process on offers, but it isn't a good idea to make too big a deal out of it. Most of the reasonable offers you get will be represented by a Buyer's Agent of some stripe.

Nor does it demotivate them from open houses and all that. It is more likely that the people I meet at open houses will want to buy something else anyway. Oh, I do sell listings through open houses - but the one who actually buys that house is usually a contact of the neighbor who comes in with no possibility of buying themselves. Curious neighbors at open houses may be the most likely source of the kind of sale price that makes clients happy - if you treat them correctly. Internet marketing is cheap and easy and effective enough that it's worth doing just to get the listing commission. And when the property goes into escrow and people call about the ad in the monthly magazine I put an ad in, well I just find something similar if not better to sell them. Remember that I'm always looking for bargains, and I've usually got several properties in mind where the sellers are more desperate than I ever allow my listings to get.

This isn't all of the games that listing agents play to try and get themselves a larger commission. Many try to require a pre-qualification letter from a particular lender, which is over the border into illegality, or even requiring that you use their loan brokerage, which a dead center violation of RESPA - no borderline about it. I ignore either of these requests, and I'm not above bringing the latter to the attention of the Department of Real Estate. The vast majority of all pre-qualifications are worthless. Nonetheless, the tactics I've suggested cover you against them pretty thoroughly. One more worthwhile tactic if you don't follow my advice about disallowing Dual Agency is to walk into their office at random intervals, and insist that they pull an agent report - as opposed to client report that is all the general public is usually allowed to see - for your property in your presence and give it to you. You are allowed to see agent reports on your own property (and only on your own property), as the privacy reasons that restrict agents from showing agent reports to the general public do not apply. Look at the showing instructions. Does it say what you want it to? Are the requests for making offers restrictive? If not, you may have legal grounds to terminate the listing, and you should want to, because the reason MLS evolved the way it has is to encourage the widest possible interest in your property. A listing agent who wants to restrict that so that they can receive both parts of the commission is moving you back into the days of the single listing half a century ago, and that is not in your best interest, not for price, not for timeliness of sale, and not for the ability of prospective buyers to actually qualify.

Caveat Emptor

Original here

Categories

Delicious Bookmark this on Delicious StumbleUpon Toolbar Stumble It!

5 Comments

I had a guy taking me out to see properties a couple of weeks ago, and I noticed the same thing. Good grief, are some realtors so desperate that they literally shoot themselves in the foot by keeping potential buyers away? It is a sad state of affairs.

Dan Melson Author Profile Page said:

Jim,

You're confusing these agents with other agents who might actually care about their clients and fiduciary duty, rather than getting more money for the same work.

There are all kinds of reasons why agents do this - most are rooted in greed and/or sloth. It's very difficult for anyone else to pin down precisely why, but it isn't difficult to figure out that it's about personal advantage for that agent.

I'm going round and round right now with one agent who wants to "steer" my client to a particular lender. They're telling me this is required by the lender who owns the property. And here's the kicker: This lender is not the lender who owns that property, nor affiliated with them. Not that that wouldn't be a violation of RESPA in any case, on both the part of the agent, the owner of the property, and the lender to whom the person is directed.

Chris said:

I myself have been in the lending business now since 1999. I understand Realtors do stupid things and are unprofessional. I deal with bonehead Realtors every day, believe me. RESPA violations and loss of license everwhere.

Caveat Emptor applies in dealing with agents as with anyone else. Perhaps in the real estate sector it would seem more pronounced, because of the money involved. The writer of the Desiderata has put it well : Exercise caution in your business affairs, for the world is full of trickery. But let this not blind you to what virtue there is; many persons strive for high ideals, and everywhere life is full of heroism.

Itaz said:

Its agents as gatekeepers that are particularly irksome. Many a time a property is lost due to that. Many a time I have been tempted to utilize the post as you have said. It would be the case of optimization of post service!

Please be civil. Avoid profanity - I will delete the vast majority of it, usually by deleting the entire comment. To avoid comment spam, a comments account is required. They are freely available, and you can post comments immediately. Alternatively, you may use your Type Key registration, or sign up for one (They work at most Movable Type sites) All comments made are licensed to the site, but the fact that a comment has been allowed to remain should not be taken as an endorsement from me or the site. There is no point in attempting to foster discussion if only my own viewpoint is to be permitted. If you believe you see something damaging to you or some third party, I will most likely delete it upon request.
Logical failures (straw man, ad hominem, red herring, etcetera) will be pointed out - and I hope you'll point out any such errors I make as well. If there's something you don't understand, ask.
Nonetheless, the idea of comments should be constructive. Aim them at the issue, not the individual. Consider it a challenge to make your criticism constructive. Try to be respectful. Those who make a habit of trollish behavior will be banned.

Leave a comment

Copyright 2005-2014 Dan Melson All Rights Reserved

Search my sites or the web!
 
Web www.searchlightcrusade.net
www.danmelson.com


Buy My Science Fiction Novels!
Dan Melson Author Page

The Man From Empire
A Guardian From Earth
Empire and Earth
--Blogads--

blog advertising
--Blogads--

blog advertising --Blogads--
**********


C'mon! I need to pay for this website! If you want to buy or sell Real Estate in San Diego County, or get a loan anywhere in California, contact me! I cover San Diego County in person and all of California via internet, phone, fax, and overnight mail. If you want a loan or need a real estate agent
Professional Contact Information

Questions regarding this website:
Contact me!
dm (at) searchlight crusade (dot) net

(Eliminate the spaces and change parentheticals to the symbols, of course)

Essay Requests

Yes, I do topic requests and questions!

If you don't see an answer to your question, please consider asking me via email. I'll bet money you're not the only one who wants to know!

Requests for reprint rights, same email: dm (at) searchlight crusade (dot) net!
-----------------
Learn something that will save you money?
Want to motivate me to write more articles?
Just want to say "Thank You"?

Aggregators

Add this site to Technorati Favorites
Blogroll Me!
Subscribe with Bloglines



Powered by FeedBlitz


Most Recent Posts
Subscribe to Searchlight Crusade
http://www.wikio.com

About this Entry

This page contains a single entry by Dan Melson published on December 8, 2012 8:00 AM.

The Ideal Listing Commission and its Structure: Performance Based was the previous entry in this blog.

Do Not Sign Loan Disclosures That Don't Apply To Your Loan is the next entry in this blog.

Find recent content on the main index or look in the archives to find all content.

-----------------
Advertisement
-----------------

My Links