Listing REALTOR® vs Buying REALTOR®: Which is the Best Choice for Calgary Alberta?

Posted by Lana Waller on Friday, December 4th, 2015 at 8:49am

 Listing Realtor vs Buying Realtor

Listing REALTOR® vs Buying REALTOR®: Which is the Best Choice for Calgary Alberta?

When you’re dealing with buying a home you may wonder which is a better choice for you.  Should you deal with, the Listing REALTOR® vs the Buying REALTOR®.  It’s always advisable to have your own REALTOR® and not go to the listing REALTOR®. This is because there are aspects under the Laws of Agency in Alberta that can put buyers who go to the listing REALTOR® at a real disadvantage.

When a member of the public goes directly to the listing REALTOR®, it puts the listing REALTOR® in a position where he represents both sides. The question that comes up under the law is, “How can the listing REALTOR® possibly represent both parties equally and fairly?” Because of this, when the listing agent represents both the buyer and seller, he/she becomes a facilitator, and cannot legally give advice in the same way he or she could if they represented only one party.

Two of the biggest points on this are price and motivation. A buyer always wants to know the seller’s motivation This is something the buyer’s agent can try to find out, but by law, the listing agent can’t discuss price and motivation with the buyer.

Consider the following scenario:

The listing REALTOR® shows the buyer the property and the buyer loves it. The buyer, looking for expert advice, asks the listing REALTOR®, “How much should I offer?” The listing REALTOR® has to, at that time explain that he/she cannot discuss price and motivation and therefore can’t answer the question of how much the buyer should offer.

The only thing the listing REALTOR® can do is provide a list of homes that have sold in the area and at what price, but can’t discuss price on the specific home since he/she represents both the buyer and the seller.

The inability of the listing REALTOR® to discuss price puts the buyer in a position of not knowing what to do. The buyer then has to do his best to figure out how much to offer. When he/she sends that price to the listing REALTOR®, the listing REALTOR® then communicates that to the seller.

The seller then naturally wants advice from the listing REALTOR® regarding how much he/she should counter. At that point, the listing REALTOR® must say to the seller, “I cannot discuss price or motivation because I’m working with both sides here.”

At that point, the seller might come back and say, “OK. Well, I’ll pull this number out of the air and go back to the buyer.” And then the buyer will end up pulling a number out of the air and the buyer and seller will go back and forth until they hopefully end up somewhere in the middle. There cannot be any advice from the listing REALTOR® through that process. Negotiating price is a very important matter, and one of the most valuable assets you get with an expert REALTOR® working for you.

In contrast, if both parties are working with their own REALTORS®, the buying REALTOR® will come in and run all the stats. He will also investigate the market to see which house the seller used as a direct comparable in order to price the house in the first place. That little piece of information is available most of the time and obtaining it is part of the advice that the buying agent will give to buyer throughout the process in order to get them the best possible value and to ensure they don’t pay more than necessary.

The thing that motivates people to go directly to the listing REALTOR® is they often think they’ll get a better price and less commission will be paid since only one REALTOR® is involved.  However, this isn’t generally the case because there is a good chance the listing REALTOR® has already negotiated a lesser commission with the seller if they happen to bring their own buyer. I get this question all the time when listing a property.

On top of that, when the buyer goes directly to the listing agent, he puts himself in a position where he can’t receive any advice on price. Additionally, the listing REALTOR® already has some degree of relationship with the seller and in fact, the seller could be a second, third or fourth time client for them or a friend and they may naturally feel more loyal to the seller. This is a big issue under the Laws of Agency.

For important information, you should know Read our Free First Time Home Buyer Report, and visit our Home Buyer page for more great information. If you are ready to start your search, don't miss your dream home when it goes on the market. Simply fill out the short criteria form and we will get you on the list today.

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The trademarks REALTOR®, REALTORS® and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. Used under license. The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.

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