Ethical to Work with Two Realtors?

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FreddieG
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Ethical to Work with Two Realtors?

Post by FreddieG »

I am interested in down-sizing to a new house, now that my kids have flown the coop. Obviously, inventory is very tight now. I approached one local realtor, described what I was looking for, and asked her to keep her eyes out.

Are there any problems with asking another realtor to also be on the lookout for me? Or even a third realtor?

Would like to get feedback on this. Thanks.
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Re: Ethical to Work with Two Realtors?

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As long as you haven’t signed anything, use all resources available to you.

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Re: Ethical to Work with Two Realtors?

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ResearchMed
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Re: Ethical to Work with Two Realtors?

Post by ResearchMed »

FreddieG wrote: Fri Jun 11, 2021 7:13 pm I am interested in down-sizing to a new house, now that my kids have flown the coop. Obviously, inventory is very tight now. I approached one local realtor, described what I was looking for, and asked her to keep her eyes out.

Are there any problems with asking another realtor to also be on the lookout for me? Or even a third realtor?

Would like to get feedback on this. Thanks.
Aside from any official issues, keep in mind that without an exclusive, written agreement, the agent will probably tend to spend more time on behalf of clients with whom they *do* have such agreements. Otherwise, they might be doing work, spending time, etc., for 'you', only to find out that another agent has already located and mentioned that property, and taken an offer or such. Or perhaps that you've already found a property with a different agent.

You probably would be better off with a *good* agent, one who is highly motivated to find "the property you want" for you.

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RickBoglehead
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Re: Ethical to Work with Two Realtors?

Post by RickBoglehead »

If a realtor shows you a home, that realtor would have claim to a share of the commission if you buy, not a 2nd realtor, contract or not.
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galawdawg
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Re: Ethical to Work with Two Realtors?

Post by galawdawg »

I wouldn't say it is an ethical concern per se. But I see a few potential problems with that approach:
  • If two or more agents identify the same house to you as a possible purchase and you indeed buy the house, there could develop a messy issue of who receives the selling broker commission. That would especially be true if multiple agents contacted the listing broker/agent on your behalf.
  • To avoid that issue, you should inform each real estate agent that you do not have an exclusive agreement with them. That is likely to result in diminished interest and results from one, several or all.
  • Depending upon your community, real estate may be a small and tight knit professional world. If you haven't disclosed your "non-exclusive" arrangement, you may find that you are dropped by one or all (or again, they may simply fail to deliver any results).
I would recommend that you secure the services of a single recommended buyer's agent. One great agent who will deliver results is much better than three mediocre agents who know that others are looking on your behalf as well. Unlike investment returns, more is not better!

Interview several to find out how they will locate, identify and pre-screen properties that meet your criteria (some agents will simply put you on an email list where you get a link to all "new" listings whether they are even close to your stated requirements or not. Ascertain what they will do for you to enable you to make an informed and competitive offer. Will they provide you information on the area and any potential issues, such as future development, crime or nuisance issues, etc? Will they provide thorough information on comps so you can formulate an informed offer? What is their availability and are they timely in their responses to you? You may be able to find properties where they previously represented the buyer. If you can, contact the buyer and ask about their level of satisfaction with the agent. And then pick the one you think will best meet your needs.

Good luck.
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Re: Ethical to Work with Two Realtors?

Post by nigel_ht »

FreddieG wrote: Fri Jun 11, 2021 7:13 pm I am interested in down-sizing to a new house, now that my kids have flown the coop. Obviously, inventory is very tight now. I approached one local realtor, described what I was looking for, and asked her to keep her eyes out.

Are there any problems with asking another realtor to also be on the lookout for me? Or even a third realtor?

Would like to get feedback on this. Thanks.
I would echo pick the best one vs keeping multiple. The only slight advantage in having more across different big agencies is getting to hear about pre-listing properties…

It’s tough these days to get a lot of value add for agents with Zillow and Redfin. I would just use those over additional agents…
jackbeagle
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Re: Ethical to Work with Two Realtors?

Post by jackbeagle »

One idea would be to ask both of them to put you on the "drip" of new homes meeting your criteria. That way, nothing too labor intensive that would push them to get you to sign something or "get off the pot".

Buyer agency contracts can include some real thorns. Such as the term length being only one aspect of the contract, but a separate clause could state "if the buyer closes on a home shown by (ME) with another realtor within 180 days after representation ends..."
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J295
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Re: Ethical to Work with Two Realtors?

Post by J295 »

Agree with concepts of posts above that you are better off with one good agent.

If you do choose to use multiple agents I believe it appropriate for you to tell each of them that you are using other agents. I am a retired lawyer, and my wife is a real estate agent, and we have multiple family members involved in real estate for decades. I have never heard of someone using more than one agent on a buyer side for a residential search.
stan1
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Re: Ethical to Work with Two Realtors?

Post by stan1 »

Sometimes one realtor is a "neighborhood expert" who does a high percentage of the buy/sell volume in a specific neighborhood, subdivision, complex or building. Possible this would get you access to a unit before it came on the market publicly if you are willing to come in hot with a good bid up front and give the seller an easy transaction. If I was interested in several such neighborhoods I might contact the "expert" in each to express my interest if something were to come open. Personally I would let them know I was talking to the realtor specializing in the other complex, too (they all know each other and likely talk between themselves in a local area). Plus its possible one realtor will come up with a prospect in the other's home turf, no harm with a little friendly competition.
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Re: Ethical to Work with Two Realtors?

Post by purpleKatz »

I once contacted the selling agent to show me a property they listed on the MLS. I was interested and asked a redfin agent to place an offer. The redfin agent would not place the offer without the selling agent agreeing that they were not entitled to a buyer's commission. The selling agent who had shown me the property refused to give up the buyer's commission. I had signed nothing.
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cchrissyy
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Re: Ethical to Work with Two Realtors?

Post by cchrissyy »

I don't see a legal or ethical problem but I also don't see a benefit of having more than 1 person informing you of new listings.

When I bought, I put some thought into who I wanted to work with and then I considered it my job to help them understand what I wanted/liked so they could serve me better.
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Re: Ethical to Work with Two Realtors?

Post by Jack FFR1846 »

As a buyer, I have never signed anything with a real estate agent. I've used multiple agents many times. We had a house hunting trip for a relocation and contacted an agent ahead of time. She showed us everything available the day after we arrived. Not satisfied, I contacted another agent and saw all the "other" houses available. Still not finding what we wanted, on day 3 we went out with a third agent and found a house we wanted, put in an offer that was accepted. Then we went to Bush Gardens for the rest of our week.

If an agent wants to get their commission, I'd tell them what Bill Belichik has said a million times. "DO YOUR JOB"
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Re: Ethical to Work with Two Realtors?

Post by leeks »

Jack FFR1846 wrote: Fri Jun 11, 2021 9:52 pm As a buyer, I have never signed anything with a real estate agent. I've used multiple agents many times. We had a house hunting trip for a relocation and contacted an agent ahead of time. She showed us everything available the day after we arrived. Not satisfied, I contacted another agent and saw all the "other" houses available. Still not finding what we wanted, on day 3 we went out with a third agent and found a house we wanted, put in an offer that was accepted. Then we went to Bush Gardens for the rest of our week.

If an agent wants to get their commission, I'd tell them what Bill Belichik has said a million times. "DO YOUR JOB"

Did you not look at the online listings yourself first? Were there houses the agents knew about that you would not have been able to find on Zillow?
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Re: Ethical to Work with Two Realtors?

Post by bsteiner »

jackbeagle wrote: Fri Jun 11, 2021 7:56 pm ...

Buyer agency contracts can include some real thorns. Such as the term length being only one aspect of the contract, but a separate clause could state "if the buyer closes on a home shown by (ME) with another realtor within 180 days after representation ends..."
How often do buyers actually hire their own brokers?
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Re: Ethical to Work with Two Realtors?

Post by johnubc »

If you are going to work with multiple Realtors in the same market area - tell them this. You do not want to be on the receiving end of two Realtors, each claiming that they identified the property to you first.

No, I would not work with multiple Realtors in the same market.
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Re: Ethical to Work with Two Realtors?

Post by jfn111 »

There are a couple of times where working with multiple Realtor's can be advantageous-

1) A high dollar area where there are mostly off market "Pocket Listings". Working with agents from different top brokerages can open up access to more properties. (These would be multi million dollar properties.)

2) Investors that work with a number of agents, that act as scouts for them, and will buy with whoever brings them a deal.
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Re: Ethical to Work with Two Realtors?

Post by stan1 »

jfn111 wrote: Sat Jun 12, 2021 7:52 am
1) A high dollar area where there are mostly off market "Pocket Listings". Working with agents from different top brokerages can open up access to more properties. (These would be multi million dollar properties.)
I'd change that to "exceptionally high demand areas" where houses are sold off market. I've definitely seen it happening for decades with small houses in historic neighborhoods (e.g. 1920s craftsmen). California Mills Act houses that get property tax breaks being one example. Also seen it in very popular condo complexes. Less so for luxury estates at least in my community.
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Re: Ethical to Work with Two Realtors?

Post by Beachey »

johnubc wrote: Sat Jun 12, 2021 7:19 am If you are going to work with multiple Realtors in the same market area - tell them this. You do not want to be on the receiving end of two Realtors, each claiming that they identified the property to you first.

No, I would not work with multiple Realtors in the same market.
The reverse is the only reason I could think of why you might want to use two realtors. If the geographic area you are looking in is widespread enough you might use one realtor for the "North' and one for the 'South'. Or for instance, you live in an area that crosses a state border. And in either case, there is almost no reason not to tell both of them that you are considering both areas and talking to each of them separately.
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Re: Ethical to Work with Two Realtors?

Post by pshonore »

Several years ago, I was the listing agent for a neighbor's house. Broker A brought in a lowball offer which was rejected. For some reason, same buyers called Broker B and made a better offer which was accepted. Broker A found out, sued and was awarded the selling commission because they had "introduced" the buyer to the property. The listing commission was unaffected. The was in the day when the only papers anyone signed were listing contracts and sales contracts.
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Re: Ethical to Work with Two Realtors?

Post by humblecoder »

Others have pointed out some of the pitfalls of working with two realtors. However, I will ask the question "why?"

Presumably, both realtors have access to the same inventory of houses. It's not like one is going to have exclusive access to some magical set of houses that the other doesn't. It seems to me that all you are doing is introducing complication and headaches with no discernible upside.

If I were you, I would just pick the one realtor you like the most, stick with him/her, and move on.
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Re: Ethical to Work with Two Realtors?

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pshonore
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Re: Ethical to Work with Two Realtors?

Post by pshonore »

humblecoder wrote: Sat Jun 12, 2021 10:06 am Others have pointed out some of the pitfalls of working with two realtors. However, I will ask the question "why?"

Presumably, both realtors have access to the same inventory of houses. It's not like one is going to have exclusive access to some magical set of houses that the other doesn't. It seems to me that all you are doing is introducing complication and headaches with no discernible upside.

If I were you, I would just pick the one realtor you like the most, stick with him/her, and move on.
Generally that's good advice, but an agent will always have faster access to new listings from their firms. Usually just for a few days if that. Of course when I was selling, offers were always presented "promptly", not "show the house for 5 days and then bring me offers"
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Re: Ethical to Work with Two Realtors?

Post by humblecoder »

pshonore wrote: Sat Jun 12, 2021 10:37 am
humblecoder wrote: Sat Jun 12, 2021 10:06 am Others have pointed out some of the pitfalls of working with two realtors. However, I will ask the question "why?"

Presumably, both realtors have access to the same inventory of houses. It's not like one is going to have exclusive access to some magical set of houses that the other doesn't. It seems to me that all you are doing is introducing complication and headaches with no discernible upside.

If I were you, I would just pick the one realtor you like the most, stick with him/her, and move on.
Generally that's good advice, but an agent will always have faster access to new listings from their firms. Usually just for a few days if that. Of course when I was selling, offers were always presented "promptly", not "show the house for 5 days and then bring me offers"
I am not a real estate agent, realtor, and have no experience in this field. My only experience as been a buyer and seller of our own personal residences. I've never heard of any sort of "agency exclusive" listing period or that they have "faster access". Maybe it happened without my knowledge, but I doubt it since when our houses have been listed, we were able to view them on the various real estate web sites within a short period of time.

As a seller, especially in a hot market, I would want my house to be listed and visible to as many prospective buyers as possible. This seems like it would increase demand and potentially the bid price.

Likewise, if the realtor values a higher commission and also claims to be acting in the best interest of their client, they would also want to put the listing in front of as many eyeballs as possible. Their interests should be alignment with their client's.

The only entity that I can see who wins in that situation is the firm that has "faster access" since they can be part of both ends of the transaction. It certainly doesn't seem to benefit the client or the agent. It also potentially can lead to some conflict of interests. There is some incentive for them to underprice the house so that they can get a full price offer during that exclusive period. That way, the firm can increase the chances of getting a deal while the house is still exclusive and get both buyers and sellers commission.

I guess where I am going with this is that any reputable firm probably wouldn't have any sort of exclusive period for their listing. Thus, back to my point that there is little benefit from working with two agents at the same time.
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Re: Ethical to Work with Two Realtors?

Post by 8foot7 »

Jack FFR1846 wrote: Fri Jun 11, 2021 9:52 pm As a buyer, I have never signed anything with a real estate agent. I've used multiple agents many times. We had a house hunting trip for a relocation and contacted an agent ahead of time. She showed us everything available the day after we arrived. Not satisfied, I contacted another agent and saw all the "other" houses available. Still not finding what we wanted, on day 3 we went out with a third agent and found a house we wanted, put in an offer that was accepted. Then we went to Bush Gardens for the rest of our week.

If an agent wants to get their commission, I'd tell them what Bill Belichik has said a million times. "DO YOUR JOB"
This. Why sign anything as the buyer? Either you want to show homes and write offers or not.
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Re: Ethical to Work with Two Realtors?

Post by humblecoder »

BogleFan510 wrote: Sat Jun 12, 2021 10:20 am
humblecoder wrote: Sat Jun 12, 2021 10:06 am Others have pointed out some of the pitfalls of working with two realtors. However, I will ask the question "why?"

Presumably, both realtors have access to the same inventory of houses. It's not like one is going to have exclusive access to some magical set of houses that the other doesn't. It seems to me that all you are doing is introducing complication and headaches with no discernible upside.

If I were you, I would just pick the one realtor you like the most, stick with him/her, and move on.
One reason I can think of is neighborhood specialization. If looking in multiple regions I would certainly want an expert in each area vs a generalist. In my home city, the neighborhoods are very local. SF and NY are even more extreme examples. That would be a reason I could support multiple agents, but also telling them their target market/neighborhood to avoid overlap.
Fair point, but even then, the agent's firm might have a specialist in a certain neighborhood that your primary agent can tap as a resource. This happened in one of our house searches where we were interested in two potential towns.

However, it sounded to me like the OP was doing this just to get another set of ears to the ground, so to speak, and the situation which you described.
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Re: Ethical to Work with Two Realtors?

Post by jackbeagle »

bsteiner wrote: Sat Jun 12, 2021 6:09 am
jackbeagle wrote: Fri Jun 11, 2021 7:56 pm ...

Buyer agency contracts can include some real thorns. Such as the term length being only one aspect of the contract, but a separate clause could state "if the buyer closes on a home shown by (ME) with another realtor within 180 days after representation ends..."
How often do buyers actually hire their own brokers?
Hiring a broker being the reason the buyer was introduced to two Realtors in the first place? I'm thinking of a different scenario, such as a buyer in the market for a "beach house" but flexible with location, and doesn't care if the house is in SC/GA/FL. Buyer wants a Realtor local to the properties being shown. Sees nothing they were shown in SC, so proceeds with another Realtor in GA, etc.
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Re: Ethical to Work with Two Realtors?

Post by bsteiner »

jackbeagle wrote: Tue Jun 15, 2021 2:05 pm
bsteiner wrote: Sat Jun 12, 2021 6:09 am
jackbeagle wrote: Fri Jun 11, 2021 7:56 pm ...

Buyer agency contracts can include some real thorns. Such as the term length being only one aspect of the contract, but a separate clause could state "if the buyer closes on a home shown by (ME) with another realtor within 180 days after representation ends..."
How often do buyers actually hire their own brokers?
Hiring a broker being the reason the buyer was introduced to two Realtors in the first place? I'm thinking of a different scenario, such as a buyer in the market for a "beach house" but flexible with location, and doesn't care if the house is in SC/GA/FL. Buyer wants a Realtor local to the properties being shown. Sees nothing they were shown in SC, so proceeds with another Realtor in GA, etc.
Don't the brokers still work for the sellers in the same way as the salesclerks in the stores work for the stores rather than for me even though they're showing me merchandise? I could hire my own clothing consultants to take me to stores to pick out things for me but most people don't do that.
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Re: Ethical to Work with Two Realtors?

Post by nordsteve »

We have friends who are shopping for lake properties in two areas that are geographically distant. They have two buyer's agents whose scope of representation is geographically limited.
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Re: Ethical to Work with Two Realtors?

Post by rascott »

I'm a Realtor (on side) and really don't have an issue with it. Other than if it was a house I showed you/ brought to you and then you put in an offer with Realtor #2.

Realty business kind of sucks..... for all the griping about it. Being a buyer's agent is really rough in that you could easily work for weeks and weeks and earn $0. All while paying fees, etc....

It's something that takes years of grinding to build a business that makes a good living. Low barrier to entry. Kill to survive.
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Re: Ethical to Work with Two Realtors?

Post by protagonist »

FreddieG wrote: Fri Jun 11, 2021 7:13 pm I am interested in down-sizing to a new house, now that my kids have flown the coop. Obviously, inventory is very tight now. I approached one local realtor, described what I was looking for, and asked her to keep her eyes out.

Are there any problems with asking another realtor to also be on the lookout for me? Or even a third realtor?

Would like to get feedback on this. Thanks.
I know I will catch flak on this, but you can also cut out the realtors completely.
It's easy enough to find any MLS listing online (realtor.com or any one of a number of other sites) and arrange your own showings with the seller's agent.
You will wind up doing a bit more paperwork and you will have to research things yourself, but you could save a substantial amount of money relative to the time you would save using a realtor.

The way you would save money is that, if the seller's agent needs to split their (say 6%) commission with a buyer's agent, and if the seller has agreed to only pay 3% if there is no other agent involved, you could come through with an offer up to 3% less than the next best offer of somebody using an agent and your offer will be preferable.

We just bought a condo using a buyer's agent with an escalation clause. If we only offered $1K above the next best offer we would not have gotten the property. We wound up paying $12K more than the next best offer because the next best offer was with no buyer's agent. If we did not have a buyer's agent we could have gotten the property for $11K less and still beat the other offer.
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Re: Ethical to Work with Two Realtors?

Post by Soon2BXProgrammer »

humblecoder wrote: Sat Jun 12, 2021 12:00 pm I am not a real estate agent, realtor, and have no experience in this field. My only experience as been a buyer and seller of our own personal residences. I've never heard of any sort of "agency exclusive" listing period or that they have "faster access". Maybe it happened without my knowledge, but I doubt it since when our houses have been listed, we were able to view them on the various real estate web sites within a short period of time.
It is common, but doesn't always happen, that when an agent is going to list, they will float a property internally with the other agents in their office and nearby offices. They hope for an off market sale with both sides of the commission being picked up by the managing broker. Commissions are split 4 ways. half to the seller's agent and half to the buyers agent.. then each typically pay half of that to the 'house" or the managing broker.

So if the managing broker can arrange a sale between two agents under the umbrella, the managing broker wins. and sometimes, if this happens the managing broker will lower the split they have with the agents, and they win too

---

Also, sometimes "off market" listing occur, and they never make it to the MLS, because someone doesn't want their house listed listed.
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