Here’s another listing question I get frequently: what happens if a buyer approaches me directly to buy my house? And a related one: what happens if the buyer makes an offer on my house without an agent?
If we have a listing agreement to sell your house, one of its terms is that you will refer all buyers to me. So once we have a listing, you can’t sell your house directly to a buyer yourself unless you’ve got what we call a “mere posting.” That is where a real estate brokerage has put your listing on MLS for you, but leaves it to you to handle all negotiations. The buyers will come to you and deal with you directly; the agent is not involved.
Royal LePage doesn’t do “mere postings,” so if your property is listed with my brokerage, and a buyer approaches you, the proper course of action is to let them know to contact me.
In the second scenario, buyers sometimes think that if they approach the listing agent with an offer, they’ll get a better deal because the commission may be lower. Sometimes that’s the case, but not always. My commission is negotiated with the seller, and has nothing to do with the buyer — I have a contract with the seller, and I can choose to change its terms, but I don’t have to. If the listing has been complicated, or the house has been on the market for a long time, or if I’ve run up a lot of costs with photographs and staging and getting the house ready for sale, and particularly if there has been lots of interest in the property, I may not be willing to reduce my commission.
The bottom line is: that’s my decision, not the un-agented buyer’s, or the seller’s alone.
If a buyer wants to deal with me directly when I’m already acting for the seller, instead of getting their own agent, they become my customer, not my client. That means I do not have the same high fiduciary duty to them that I have to my client. I can’t really do up a comparative market analysis for them or advise them on price, without creating a conflict of interest with my client. And our legislation, REBBA 2002, states that we can’t disclose bottom lines.
The duty to hold our client’s interests above our own is reduced with a customer to answering their questions honestly and fairly. So I have never really understood why a buyer would want to deal directly with a listing agent instead of getting their own realtor who can give them straight, unbiased advice on the property they’re interested in.
If you have any questions about buyer representation, contact me – I’d be happy to answer them!