Here at Solutions we get a lot of questions from potential buyers about the proper protocol for seeing a listing – should they go to see it with a buyer’s agent or simply call the listing agent?
Buyers might wonder if only the listing agent should show a home. Yes, an agent is obligated to show his or her client’s homes, but, if you’re working with another agent, typically your buyer’s agent will show you the home. A listing agent is hired by the seller to work 100% for the seller’s best interests. It’s better for a buyer to have their own representation. As an FYI, the buyer’s agent commission is paid for by the seller at closing.
In Virginia, like many states, you have the right to choose and consent to the type of representation that you want please see the link to the buyer agency agreement here.
Let’s be specific
If you hire a buyer’s agent, they will only represent you and your interests. If you have the listing agent show you the home and sign an exclusive agreement, with the listing agent. You have entered into a dual agency agreement and the listing agent will only have a fiduciary duty to you and to the seller.
NOTE: If you have signed an exclusive agreement to work with the listing agent under dual agency capacity, you may be obligated to purchase the home through that agent.
How to Answer the “Are You Working With an Agent?” Question:
What if a Buyer goes to a public open house and the listing agent asks them to sign in – what should they write down and what are the rules for who can represent them if they decide that the Open House is, in fact, their Dream House?
If the listing agent shows you the home, the first thing they should ask you is whether you are working with another agent. Here are examples of the best way to answer that question:
- No, we’re not working with an agent at this time, but when we’re ready to buy a home, we’ll find a buyer’s agent to represent us.
- Yes, we’re working with an agent.
- No, we don’t have an agent. Would you consider representing us?
Agents ask the question to establish an agency relationship. If you have an agent, and state so, the listing agent should gracefully let it go.
The reason for this is something called the “procuring cause” and many buyers in our market are not aware of what it means.
Question: What is wrong with calling a listing agent to see a listing?
Answer: In states, like Virginia, where agents are allowed to practice dual agency, when you ask a listing agent to show you that agent’s listing, the agent figures you are also going to write the offer with him or her. This means the agent will receive the listing side of the commission and the buying side of the commission (also known as double-ending).
This is a sensitive issue for many buyer’s agents. The main problem is procuring cause, or who can be seen as the reason a buyer comes to a particular house. Proving procuring cause can be a long, complicated process, but agents who sue over procuring cause are typically the agents who first showed the home to the buyer.
What can happen if you write an Offer With a Buyer’s Agent After Seeing the Home With the Listing Agent?
The listing agent should always ask potential buyers if they are working with an agent, just as we have discussed with new construction in a previous blog. The reason for this is that it will make a difference when it comes to making an offer on their listing.
If you, as the buyer, didn’t state you were working with someone, and then come back with a buyer’s agent later, the listing agent will notice your name on the contract and may feel as if they’ve been used if you didn’t make it clear you had an agent or were planning to use one. They also might not present your offer in the best light to their client, the seller, and, if there are multiple offers in the works, something buyers in a market with low inventory can surely expect, this might not bode well for that buyer.
The Upside of Letting a Listing Agent Show You a Listing
There’s one positive aspect to touring a home with the listing agent and that is he or she may tell you more about the property than they will disclose to another agent.
But, it’s better to just be upfront and let the agent know whether you intend to work with them. Don’t make the mistake of leading the listing agent on, regardless of how unintentional, because it could come back to haunt you if you want to make an offer later.
The bottom line is that in states like Virginia, it is almost always best to get a buyer’s agent and be fully represented.