I’m often asked what a seller’s bottom price is for his or her property. This seems to happen most often in open houses.
Here’s the deal…even if I know, I can’t tell you. Not only is it against the law, it wouldn’t be fair to the seller.
A Realtor who has a signed listing agreement with a property owner has a fiduciary duty to that seller. It is the agent’s responsibility to act in that seller’s best interest at all times.
After all, the owner hired the broker to do a job.
I said “broker”. Not agent. Is there a difference? Yes.
A broker is a person/company with a broker’s license. For simplicity’s sake, think of brokers as companies. Examples include Coldwell Banker, Edina Realty, Re/Max, Keller Williams, etc.
When a seller signs a listing agreement, the contract is actually with the company, and everyone on that team. The Realtor is a sub agent in the transaction. As a result, the entire company has an obligation to that seller; not only ethically, but under the law as well.
So even if a buyer comes in to an open house and encounters an agent with the listing company, but not the listing agent herself, that agent has a responsibility to act in that seller’s best interest.
Let’s say a Minneapolis duplex is listed for $300,000. The listing agent knows the seller is motivated and would accept an offer of $265,000. A buyer walks into an open house and inquires whether what the seller’s bottom dollar is and whether he would accept an offer of $285,000. If the agent discloses that the seller would accept an offer of even less, he has just cost the seller money.
The same holds true for the agent representing the buyer. If an offer is submitted for $250,000, and the buyer’s agent discloses that her client is actually willing to pay $275,000, she may cost her client money.
Does that mean a buyer should be represented by an agent with another company for an outcome that’s most favorable to him or her?
Well, if the buyer is also represented by the same company, both the listing agent and the buyer’s agent have a fiduciary responsibility to both the buyer and the seller. This is called dual agency, and the agents involved have an obligation to make every effort to negotiate a “win – win” for the parties involved.
There’s only one way to find out what a seller is willing to take for a property. Write an offer. Their response to it will tell you everything.