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June 20, 2014 09:43 AM

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Is your Listing Agent Ripping You Off?

So time to sell your home. You list with an agent, but spend a couple weeks getting the home in order before the grand opening. Perhaps you agent drops by with a few people to look over the home. You do a lot of work and it is ready.

The Home goes on the MLS and boom you have an offer that day, maybe in hours. It is even a full priced offer. Of course this is great. Sign the contract, get into contract and close all very fast.

So what could be wrong with this? Did you leave money on the table? Did the offer also come from your listing agent or someone else in their office? Is there an outside agent/broker representing the buyer or is it all one firm? Should it matter to you?

In real estate we call this Double Ending. When you sign the listing agreement generally you agree to pay a fee to the Listing Agent and the Listing Agent (In the contract) agrees to pay part of that to the agent/broker that brings in the buyer. But if the Listing Agent also brings in the Buyer generally speaking they keep both parts of the fee. This is Double Ending.

Is there anything wrong with Double Ending? Not necessarily, some states have laws against it, but not in California. I have Double Ended transactions myself. But sometimes the seller is not getting all the money they should.

During the waiting period between when the listing is signed and when the home is actually put on the market the Listing Agent is aggressively marketing the home, even as a Pre-Listing Sale, Off Market, or Exclusive Listing. Nothing wrong with that, I do it myself. I try to line up buyers so I can Double End it.

Now the problem is a Listing Agent should be trying to get the seller the best offer possible, and if you can get multiple offers and even people bidding against each other this is great. You will probably get a better price.

To get these Multiple Offers you need exposure. That means the home needs to set on the MLS for a period of time to give people plenty of time to make offers. (Now in a strong Buyers market you might not want to let an offer set – but in this market there are plenty of buyers.) If I see another agents listing come on the MLS it takes a little time to alert my buyers and get them out to the property. Give it time.

Here is my suggestions for Sellers:

Go ahead and let the Listing Agent market the home in advance of going on the MLS.

However, have the Listing Agent state a due date for all offers. I suggest two weeks out from the listing date, but there is nothing firm.

In that two week interval the home should be on the Broker Tour and have an Open House, preferably right after it comes on the market so there is still a week to 10 days for people to act on what they see at the tour or open house.

Make sure the agent is doing a good job of marketing the home with good photos and description of the property. Is the Listing Agent doing all they should and agreed to?

Insist on seeing all offers. Agents should be showing you all offers anyway, but I think that some don’t. Make them explain to you the ins and outs of each offer. Understand why issues other than price are important and how they should be considered when deciding.

Decide with your agent if you want to issue a highest and best counter to the better offers or just take one offer that is clearly the best.

A Listing Agent needs to act in the best interest of the seller, not their own pocket. I have Double Ended some homes. I have also had listings where my buyers did not get selected by the seller as the offer to take, because they were not the best. I bring all offers to sellers and generate as much exposure as I can.

Home Point Real Estate is located in Brentwood Ca and provides service to the East Contra Costa County Communities of Brentwood. Oakley. Discovery Bay. Antioch. Pittsburg and beyond. Give us call regarding Buying a Home. Selling a Home. or Real Estate Investing. Ask us for a Free Home Value Evaluation .