WHY SHOULDN'T I CALL THAT AGENT ON THE SIGN IN THE YARD?



When a seller wants to list their house for sale with an agent, that seller enters into a listing contract with the agent. At this point, that agent becomes their Listing Agent because a listing contract is signed by both of them.

That seller then rightfully expects their listing agent to work hard on their behalf to get the highest price with the best possible terms. After all, that's what they are paying for. One of the most basic items on the listing agent's "To Do List" is to place a sign with their name and phone number in the front yard, encouraging would-be buyers to inquire about the house.

It is a common and serious mistake for any homebuyer to call that agent, because the buyer has now probably unwittingly given up their right to have their own agent represent them as a buyer, one who would work to get them the lowest price and the best possible terms for them, as the buyer.

Here's why. By calling and beginning a relationship with that listing agent, you will most likely:

a.) end up either continuing to work with that agent, which is dangerous because of where their loyalty and duty lies, or

b.) if you like the property enough to write an offer on it, you may ask that same listing agent to represent you as your buyer's agent.

THIS IS WHERE IT GETS VERY TRICKY FOR YOU, AS A BUYER! Remember that the listing agent is there to protect the seller's best interests, and it would be a conflict of interest to have them protecting your interests as well, as a buyer.

At this point, because you've asked the listing agent to also represent you as your Buyer's Agent, the listing agent's supervising Broker is going to assign you a new agent from his/her office and force you into a designated agency relationship or multiple representation relationship. BOTH OF THESE ARE NOT IN YOUR BEST INTERESTS! We have explained both of these at length and their dangers on our "who's who" page.

After you find out that the supervising Broker is going to assign you a brand new agent, (designated agent) who still isn't looking out for your interests because they must remain neutral and/or impartial, you begin to realize that you really want and need to have someone representing you while writing the offer to purchase on that property you like.

So you decide to call another agent that was referred to you by a friend or family and explain the situation you've found yourself in. You ask that agent to represent you as your new Buyer's Agent.

What you begin to hear from this agent is a lot of information about "procuring cause" and how it will be difficult as well for this new potential Buyer's Agent to represent you during that transaction. You begin to hear how you inadvertently made it hard for any other agent to get involved in that transaction because they will not get paid for their services.

Let us explain.

Back when you first called that listing agent on the sign and he/she first showed you the property, that agent should have disclosed to you that they were representing the seller's interests. That probably didn't happen! As you then continued to ask questions about the property and that listing agent answered them, you were inadvertently obligating yourself to that agent by building a relationship and interest in the property, which caused an "unbroken chain of events" leading up to you wanting to, and ultimately causing you to purchase the house.

This is called "procuring cause" and it can trap you when you go to look for buyer representation from any other agent.

Why? Because under procuring cause the agent in this case, the listing agent, that caused you to wish to purchase the home, is most likely going to be due the compensation that would have flowed to the new Buyer's Agent of YOUR choice.

All agents know this and that's why when you explain your situation to your new potential Buyer's Agent and asked them to represent you, they won't be able to help.

They know that they can't help you because, by doing so, they would be a conflicted Buyer's Agent and step into the transaction that already exists. They would not be able to get paid, or for that matter, stay paid for their services.

This is because the funds that are available to pay commissions are already predetermined who they go to. The largest portion of the commission funds goes to the listing agent and the rest go to "any other agent" who causes the buyer to purchase the property. Here, that would be the listing agent as well. It will not go to the Buyer's Agent of your choice after you go out and get one. This is a very lucrative payday for the listing agent. They get paid twice. The first time is from their seller and then again for establishing procuring cause and getting you, as the buyer to the closing table.

There is nothing you can do about this because all agents who belong to a local Realtor Association, (most do) have already pre-agreed to this in order to belong to the association.

If that other agent that you called to act as your new Buyer's Agent would have agreed to represent you, they would have done all the important, vital work, taken on all the liability, gotten paid at closing, only to receive notification-after closing- that the former listing agent is now forcing them to arbitrate, all in an effort to take away their fee. This is an effort the former listing agent will most likely win, because they established procuring cause.........and you were unsuspecting pawn in the whole process that inadvertently allowed it to happen.

The best way to protect yourself from having an agent assigned to you or having an agent that must remain neutral and can't advocate for you, is to have an Exclusive Buyer's Agent working for you from the start. Once you've entered into a WB36 Buyer Agency Agreement, you are protected and you can rest assured that you won't have to worry about all the conflicts of interest that are within the real estate system.