How Many Buyers Agents...

Can one Buyer have?

This week we received an excellent question from an Ask The Realtors blog reader who asked:

Is it permissible (both legally and ethically) to enter into multiple buyer-broker agreements? Why not have multiple agents trying to find that perfect home? Of course if they both want to show the same house there is a problem but on the other hand what if certain brokers hold ìpocket Listingsî that are available or known only to their clients? Thanks.

The short answer is, ìNo.î You cannot have more than one buyerís agent working for you to make a purchase, either legally or ethically.

Legally, the buyer-broker agreement obligates the real estate agent to live up to a defined set of obligations, paramount among them: placing their clientís best interests first. The agent has a ëfiduciaryí responsibility, but that agreement also provides an exclusive right to provide those services to the client. It makes a promise to that agent that if they can help their client successfully find, negotiate, and purchase ìthat perfect home,î they have earned compensation. In that way, the buyer client has obligations outlined in the agreement, too.

Ethically, it is not fair to multiple Realtors to all be working for the same customer when only one of them will actually earn compensation for doing so. An agent doesnít make a dime until their buyer client is happily ensconced in ìthat perfect home,î but it takes a lot of awareness, insight, and hard work to get them there. Realistically, good real estate agents work with their clients to learn about, and help find, all of the properties that fall within the parameters their clients are searching for. If you put three good agents on the same search, they are going to produce largely the same candidate properties for review, and you will have exactly the scenario you mentioned, ìthey both want to show the same house[s],î and then ìthere is a problemÖî

You also very astutely ask, ìWhat if certain brokers hold ëpocket listingsí that are available or known only to their clients?î

While pocket listings do exist, they constitute a mere fraction of the available properties for sale in any real estate market. In a buyerís market especially, if your property is available for purchase, you want absolutely everyone to know about it. You want it yelled loudly from the tallest building, posted on every bulletin board, shoveled into every nook and cranny of the Internet. You want top signage and repeated mailings. You want the fact that your house is for sale passing under as many noses as humanly possible. The greater the marketís awareness of the availability of your home, the greater the your proceeds from its sale and the easier that sale will be. Remember, the basic Law of Economics is Supply vs. Demand. If you are selling your property, you want demand as high as possible, not a secret kept in some agentís ìpocket.î

If your goal is to find that ëhidden gemí property, find yourself the absolute best agent possible, or best agents in the case of a team (wink, wink). Discuss with them your goals, dreams, concerns, capabilities, and intentions, and they will be able to root out all of the best, top-value properties available, and get you in your first choice for as little money and effort as possible. They will also be able to help you ascertain propertiesí true market values, likely seller motivations, and situations where you can make your dollar buy the absolute most and best in your market.

Finally, you may notice that we discuss both customers and clients. Customers are anyone who may be interested in real estate, a client is someone who has chosen and entered into an agreement with the Realtor of their choice, and will receive that agentís best efforts as guaranteed by law, whether that client is trying to buy or sell real estate.

Thank you again for your questions. I hope this clarifies things for all of you Ask the Realtors readers out there. Remember, keep sending your comments and questions ó we love this stuff! Leave your question as a comment below, or e-mail MikeGaines@C21Northland.com or Mike.Annelin@C21Northland.com.

All the best,
TEAM MIKE


Last Updated: November 20, 2007