Experience You Can Trust


When do negotiations on your home purchase really begin? Maybe you have never thought of this, but
after you spend a couple of hours with your agent, then have lunch, on the way home I know what you do. You stop at open houses. Maybe your agent is ill or gone for the day and you pop by some open houses and chat with the listing agents.

Remember that the listing agent represents the seller, not you. Be careful what you say to the agent if you like the house at all. Why? Because if you decide you like the house the agent can relate whatever he learned about you to his seller. Conversely, if the listing agent begins to reveal the motivation of the seller then maybe you can use that to your advantage. If you choose to work with a listing agent directly then know that he is NOT representing you UNTIL you sign a dual agency agreement. Up until that time “anything you say may be used against you.”


The state of California, along with most states, has agency rules and disclosures. Dual agency is legal and can work well if the agent follows the rules, but it can also backfire if the agent is unethical. Agency in a normal transaction is spelled out very clearly as to who is representing whom. There is no doubt. Also the rules of agency are clear. All Realtors owe “honesty” to all parties but they are NOT supposed to reveal the motivation of their client, as that may put their client at a disadvantage in negotiations.

If the client has directed his agent to reveal information, then it is allowed. For instance, if the seller directed his agent to use language like “must sell this week” or “bring all offers” and instructed his agent to put that in the MLS, then it is allowed. When you come across an agent saying something like “I know this price is too high and I can get you a lower price.” then that is unethical behavior.

I was mentoring a new agent this week as he represented his buyer in negotiations and was shocked to hear that the listing agent had revealed to my mentoree a very personal and revealing fact about the motivation of his seller. The seller was going to have to bring money to the table to close a deal and he must do so because of the sensitive nature of his financially-related job. Once this piece of information had been revealed to the buyer’s agent, the buyer’s agent certainly can pass it along to his clients to help in the negotiations. It is not illegal for an agent to ask certain questions of another agent, but there are strict ethical guidelines the second agent must follow in answering, or not answering, those questions.

As I was musing about this subject it came to mind again how many times I have seen a few misplaced words end up costing principles thousands of dollars. Even if those words are not unethical they may be badly timed. Many times it is the new agent or the discount agent, or maybe the unethical agent, that hurts the financial position of his client and the client is no wiser. My father-in-law, who managed a large business, used to say, “We can never pay a great employee what he or she is really worth, BUT a bad employee isn’t worth whatever we pay him.”

Be careful who you hire to sell your home.

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