I read an annoying article in MoneySense last week called Tricks Realtors Use to Sell Homes. My previous five blog posts debunked some of the misinformation and unfounded accusations contained in it. In this final post, I respond to the writer’s absurd claim that agents actually obstruct legitimate showings so that they can find their own buyers and receive a double commission.
So why would a realtor work at not selling a home? Because it’s one of the simplest ways to double-dip in the commission pool. A double-dipper’s goal is to postpone any interest from the general population—the 92% of house hunters who use the Internet to look for listings—so he can find his own buyer. That way the agent represents both the seller and the buyer, and effectively doubles his commission. This tactic is primarily used by agents who dominate a particular neighbourhood or condo-building, and who think there’s a good chance of attracting a buyer on his own without MLS. On the sale of a $350,000 condo, double-dipping could be the difference between a commission of $8,750 and $17,500.
This assertion assumes that we have a steady supply of buyers who we can access to purchase any property we have listed. I wish we did; I wouldn’t have to work so hard at marketing the listings I do have.
I might be working with two to three buyers and the same number of sellers at any given time; it’s often less than that. Their wants and needs are so diverse that the odds of me matching any one of them to any one of my listings would be like pulling six random strangers off the street and matchmaking two of them so well that they decide to get married. Not too likely.
Besides, if I don’t have an MLS listing, that means I’d have an exclusive listing with the seller, meaning the property only appears on my website. That would mean there would be no way for buyers to know it was on the market unless they stumbled on to my website in the first place, and since those 92% of the buyers who scour the Internet for listings are usually on Realtor.ca, how are they going to find me? Pretty ineffective marketing, if you ask me.
Realtors find unrepresented buyers when the property is on MLS and there’s a sign on the front yard, and someone calls them because they’ve either found the listing on the Internet or driven by and want to see it. Because they don’t have an agent, the agent shows it to them. If they like it, they may decide to make an offer, using that same agent. There’s nothing wrong with that, as long as the ethical rules are followed and the buyer understands that they are a customer of the agent, and not a client, and the realtor’s primary obligations are still to their seller. Double-ending is not illegal or unethical.
Here’s another ridiculous allegation:
Another way unethical agents try to double-dip is by ignoring viewing requests. If your realtor can’t seem to book a viewing for a particular house, or the appointment is always cancelled at the last minute, you may have come across a double-dipper. The listing realtor may be thwarting your agent in the hope you’ll get frustrated and contact them directly, without your agent. They’ll then try and represent you in the deal and collect both commissions.
If your agent can’t get a showing, that means you have an agent. And if you do, I have to deal with that agent, not you. It’s illegal for me to even communicate with another agent’s client without their written consent under our REBBA legislation. I cannot represent a buyer who is already represented, that’s why are first question to any buyer who contacts us is, “do you have an agent?” And that applies even when they’re the ones doing the contacting.
As for viewing requests, those go to the client for approval, through a booking or appointments desk, so I couldn’t ignore a request if I tried. If you can’t get in to see a property , it’s because it’s not convenient for the seller to let you in. Besides, realtors know how to pick up the phone if they’re having a hard time getting into a property — they would simply call the other agent to find out what the issue is and arrange access directly.
So the writer’s claim that a realtor would deliberately thwart another agent in the hope that other agent’s buyer will contact them directly shows a complete lack of understanding of how real estate actually operates, not to mention the law. On the baloney meter, this gets a 10 out of 10.