The Drawbacks To Using The Same Listing And Selling Real Estate Agent

When you have a good real estate agent, it can seem like a great idea to keep them around for the long term. Maybe they helped you buy your house, but now you're ready to move, and you'd love to partner up with them again. Or, they just sold your home and got you the best deal, so they must be able to do the same when you buy. Or sometimes, an agent representing a property might offer to liaise directly with the seller on your behalf, claiming to represent the property. These situations can be tempting, but they are not always a good idea.

Using the same real estate agent for listing and selling can sometimes have disastrous financial impacts on you in the long term. According to The Mortgage Reports, listing agents and buyer's agents have two distinct sets of responsibilities. While some real estate agents typically work either side of the deal for different clients, they usually only excel at one. Actually, agents working both sides of the same deal for two clients often breach ethical practices and can even cost you a lot of money. Keep reading for some important drawbacks to using the same listing and selling real estate agent.

Agents representing buyers in a transaction will usually have more experience with the delicate dance that is obtaining financing for a home. So, if you choose an agent with more experience in listing homes to represent you while you are buying, they might not be able to help with the financing side of things.

According to The Washington Post, it's not a good idea to totally shield your real estate agent from your financial situation. Licensed Realtors are bound by a strict code of ethics, and you can rest assured that your sensitive financial information will not pass around behind your back. If you don't trust an agent enough to guide you to homes in your budget with the correct information, you probably shouldn't be working with them on such an expensive undertaking. If your agent typically sells houses, they might not have the best advice about moving forward once you're pre-approved.

A primary downside of using one agent to sell the house you live in and purchase your next residence is the latter part of the process. Imagine you partner with a rockstar listing agent who is a shark at negotiating and gets you the most value possible for your home. Will they be able to do the same when it's your turn to cough up the cash? Typically, listing agents are used to fielding offers, not putting them together. It's much easier to be good at negotiating when you are the one sitting on the property, not the one trying to move in.

According to Forbes, if you are willing to pay a certain amount for your dream home, and the housing market is already very competitive, you should start with your best and final offer. If you get knocked back or countered, you spend less time going back and forth and can move on to your other options quicker. In addition, consider the seller's unique needs while putting together this offer. Do they want someone local to take over their house? Are they interested in a speedy, no-contingency sale? If you use the same agent to buy and sell your home, they might not be as quick on the second part of the deal.

When you need to find your next home, a listing agent might not have the connections to find properties. This limitation is because they typically represent people selling their homes, so the other agents come to them with offers. When you tell someone who usually works as a listing agent that you want a three-bedroom ranch-style home on the southwest side of the city, their network might not be big enough to find you what you really want.

According to Better Homes & Gardens Real Estate, networking is one of the most important tools a real estate agent can cultivate. Agents can build relationships with other professionals in their local community and further afield through networking. They can rely on each other to introduce clients to properties and vice versa. Listing agents might not have to rely on their network in typical transactions, while buyers' agents can call on existing relationships to get their clients the best deal. By using only one agent for both, you might miss out.

If your real estate agent typically works on behalf of buyers, then you might have trouble when it comes to naming your price. Since they don't typically work as a listing agent, they are used to hunting down deals, not confidently pricing your home to sell.

According to The Balance, most listing agents will run a comparative market analysis on each home they represent before putting it on the market. You might also hear this called a CMA by those working in real estate. A CMA helps establish the current market value of your home by pulling comps, or comparable homes. It shows you all recent listings in your area: active, pending, sold, expired, and even canceled listings. From this information, your agent will be able to set a competitive price for your property. An agent that typically represents buyers will have less experience setting comps, so you might not get the best price.

If you love your current real estate agent and want to use them to buy a home, they might not be allowed to legally. This point is especially true if you are moving out of state. Like lawyers, real estate agents often have a state license and can't operate elsewhere. According to Aceable, agents who already have a license in one state won't necessarily have to start over if they move or want to practice in more than one state.

However, agents will still need to be intentional about where they assist in sales. Even if a state has license reciprocity, there are still a few hoops to jump through. License reciprocity is the industry term for agents that hold a license in one state being allowed to apply for a license in a second state without having to take the locally required courses. The idea is that because they've already met the requirements at home, as long as they pay the fee, everything should be okay. So, if moving out of state, be sure your agent can legally work there if you want to use the same one. If not, things will take longer while they obtain their license, which is a big downside.

Just like there is a difference between being just a real estate agent and becoming a licensed Realtor, there are also further accreditations agents can receive. Agents can take courses in a variety of subjects, like advanced negotiations, marketing, and even networking. In addition to these courses, agents who see themselves working more with clients looking to purchase a property can take a course to become an Accredited Buyer's Representative (ABR).

According to the National Association of Realtors, becoming an ABR takes a few steps. First, agents must complete a two-day designation course, then an additional ABR elective course. In addition, they must prove their involvement in at least five buyer's transactions, from start to finish. ABR agents are invaluable to people looking to purchase a property as they have unique insight into the process from the purchasing point of view. Because of this, it's unlikely that a listing agent will be an ABR. If you use the same agent for buying and selling, you might lose out.

Listing agents tend to be really good at advertising a property to a broad market. It's part of their job to get as many eyes on the property as possible and get their seller the best deal. However, if you use an agent who tends to do more work on behalf of buyers, your home might not get the exposure it deserves. According to Rochester Real Estate Blog, there are many different avenues to take when marketing a home.

Traditional ways of marketing like newspaper ads and flyers can still work well, depending on the average age of buyers in the local market. In addition to this, social media marketing is now heavily used in the industry, as is classic peer-to-peer agent information sharing. If you work with a listing agent, they will likely be pros at this. However, if you use the same agent who helped you buy your home to sell it, they might not be as up on the latest marketing trends.

If you use an agent to sell your local home and move across town, they might not know the area enough to get the best deal. Real estate agents rely heavily on connections to buy and sell houses. The farther you move from your original location, the sparser your previous agent's network is likely to be. If you remain in the same state, then licensing won't be an issue, but using as local an agent as possible still has many perks.

According to Bradley & Bradley Real Estate, local agents know the area better than anyone else, period. They know the roads with the worst congestion, the best schools, and the flooding patterns. Even if you work with someone from across town, they won't have the same intel for you. In addition, using someone local means they will be more available to meet with you on shorter notice. Even if your agent has to commute a short distance, local events and traffic patterns can severely impact things.

Many people decide to use the same agent to sell their house and buy their next one because they think it will give them access to commission savings. However, going this route doesn't always pan out. The Consumer Federation of America conducted a survey of over 200 real estate agents across 20 cities in the USA.

The findings stated that 73 percent of agents would not want to lower their standard commission rate for a particular deal. So, if the only reason you are working with the same agent is to save on commission, there is a high chance that it won't actually pan out how you think. Standard commissions for a deal tend to hover at around six percent of the final price. For a $300,000 home, that would be roughly $18,000. You might be willing to find an agent who will cut their commission slightly, but significant savings are statically unlikely.

If you are interested in buying a specific house, be wary of its listing agent representing you. This situation is actually illegal in some states, including Alaska, Colorado, Florida, Kansas, Maryland, Oklahoma, Texas, and Vermont. According to the Consumer Federation of America, you have to be really careful and pay close attention to the agent's official title. For example, a dual agent represents the financial interests of both the buyer and the seller, which is not possible. A transactional agent attempts to facilitate a sale but has no responsibility to either the buyer or the seller.

Think of it this way. If you are in court and accused of a crime, would you want the lawyer prosecuting your case to defend you? We didn't think so. So, when buying or selling a property, you always want to have an agent that works for you and you alone. The potential loss of money here is a real drawback to using the same listing and selling agent.

In addition to avoiding working with a property's listing agent to assist you in purchasing the home, you also need to pay attention to the professional connections between agents involved in any real estate transaction. If your agent is a direct colleague of the one selling a property, things are likely to go south. Same if it's the other way around. Colleagues working in the same office are less likely to have your financial interests at heart and are apt to help each other out, even if it violates professional ethical codes.

According to ResearchGate, a study conducted between 2004 and 2007 analyzed over 10,000 real estate transactions in New York. The study found that people who used colleagues from the same firm to represent them on a real estate transaction had more negative outcomes financially than those who did not.

If you have to sell your current residence before buying a new place to live, the agent representing you in both transactions may encourage you to drop the price of your existing home. They might ask you to do this to ensure a quicker sale so they can get paid and move forward with the second half of the transaction: finding you a new place to live.

According to Rocket Mortgage, the home selling process can take months, depending on current market conditions. Owners in a seller's market might not have to do much to prepare to list their house. However, it could take months to get things ready for people to make offers in a buyer's market. If you plan to work with the same agent throughout the entire process, they might rush you through the half of the process that is less lucrative for them, so be careful.

Choosing the right real estate agent is essential. Any problems with your agent's personality or work style will worsen if you use them to sell your home and buy your next one. Before you sign any contracts or make a deal, you need to be sure that you like this agent and trust how they work. According to NerdWallet, it's important to conduct research on multiple agents before working with them.

While it's great to consult friends and family for recommendations, you should also read reviews of past clients online and ensure that the agent has worked in your area before with success. If you can't meet with a potential agent in person before moving forward, consider a short video interview or introductory phone call to get a feel for their personality and how they work. If you don't get along and use them for two transactions, your life will be miserable.

Finding a perfect buyer, figuring out the best time of year to list your house, negotiating a deal on the sale, then doing it all again (or at the same time) for the home you are moving to is a lot of work ... work that an agent doesn't usually complete alone. If your agent does this for multiple clients, you might not hear from them much. According to The Balance, things move extremely fast in real estate. Offers expire in minutes, and you often need to stay in constant contact with your agent in the final days of a deal, no matter which side you are on.

The best way to get the level of contact you need from your agent is to establish a plan early on for the amount of contact you would like to be in with them. Decide on the type of contact (text, phone, email) you want to use. However, your agent may still get bogged down trying to be everything for all of their clients.