Pamela Vasiliu
Sales Representative

RE/MAX Professionals Inc.
Independently owned and operated.

Date: Monday May the 28th, 2018 



Buying from a Listing Agent Yay or Nay?

March 24, 2016 - Updated: March 24, 2016

More often than not, when I am listing a home for sale, I find that there are several buyers wanting to directly buy from Listing Agent instead of having a Buyer’s Agent.


These Buyers spend hours scouring the MLS, go to open houses, and book appointments directly with the Listing Agents. Then use the Listing Agent to prepare and submit an offer. 


What I learned from with these Buyers, is that the decision to buy using the Listing Agent is based on misconceptions about how real estate agents work and the untruths that some agents tell Buyers.


Before subjecting yourself to the pitfalls of buying with the Listing Agent, you must first understand how Realtors are regulated in Ontario.


Buyers and Sellers retain a brokerage, not an agent. The agreements they enter into are with the brokerage, not the agent. The Listing Agent is the person who represents the Seller, and the responsabilities to the Seller include:

  • Promoting and protecting the best interests of the Seller (price and terms favorable to the Seller)

  • Informing the Seller all information they obtained/know about the Buyer (price range, motivation, circumstances)

  • Confidentuality of the Seller's motives and price

The Buyer’s Agent is the person who represents the Buyer. There are 2 agreements that a Buyer can enter into with an Agent:


The Buyer signs a Customer Service Agreement, making them a Customer. When a Buyer is a Customer, the agent IS NOT representing your best interest and provides restricted services. The agent’s obligations are:

  • Fairness, honesty and integrity to everybody
  • Conscientious and competent service
  • Only disclose to you the material facts that he or she already knows or ought to know – they are not required to take any further investigative steps.
  • Limited privacy obligations

Buyer can sign a Buyer’s Representation Agreement, this means you are a Client and the obligations to a Client are:

  • Fiduciary: the agent must promote and protect your best interests at all times

  • Negotiate favorable terms for the Buyer

  • Maintain confidentiality

  • They must take reasonable steps to determine and then disclose to you all material facts about the property.

In Ontario, it’s legal for an agent to work for both the Buyer and the Seller. It’s called Multiple Representation and it can get complicated. When an agent works for both the Buyer AND the Seller, they are acting as mediators and that Realtor has certain obligations:

  • Confirm in writing that all parties understand and consent to the agent representing both parties

  • Maintain the best interest of Buyer and Seller - sometimes this means sacrificing something for the other party.

  • Not reveal confidential information to either side

The Danger of Buying With The Listing Agent

Despite what your Uncle or Your Dad told you "working with the Listing Agent will guarantee you will win the bidding war, or that you will get insider information about the property's selling  price".  Yes, the Listing Agent has access to all the offers and can tell you how much to bid to win it, but that is 100% against the real estate code of ethics. Any agent who tells you’will have an edge when you work with them is unethical and risks losing their real estate license and in turn give ethical agents a bad reputation.


This is one my favorites - "The secret inventory or inside scoop of houses that Buyers dream of is not true and rarely if never works to the Buyer’s advantage."  There is a common belief out there that every agent has a secret inventory or special network – homes that are not actually on the market that can be solely accessed by the agents’ own insider information or they can obtain a private preview prior to listing. Yes, agents may have the inside scoop on the homes they they will be listing in the future, most agents in Toronto only list a handful of properties per year.  What about other agents' listing in the future? How will they gain access to that information? Also, what many Buyers fail to realize, it rarely ever makes sense for a Seller to sell to you instead of listing their home to the open market (particularly with the market we have been experiencing in the GTA) This tactic is used so they can get you to pay more than market value, or there may be an issue with the house. Some Listing Agents will tempt you with the "secret inventory" line to get you to be their client, but it really never works out for the Buyer.


For the most part, buying with the Listing Agent does not secure a "good deal". Another misconception Buyers have is if they buy with the Listing Agent, they’ll save money because the agent is going to get a better commission, and the Buyers will benefit from that commission. Here are the facts: the Seller pays the commission, Buyers cannot negotiate the commission with the Listing Agent – that negotiation took place between the Seller and the Listing Agent at the time the listing documents were signed and has notheing to do with the Buyer. The Seller may benefit if the Listing Agent brings an offer from the Buyer, but, it is the Seller's savings, not yours.


While the Listing Agent does probably know the house better than anyone else, it’s their job to focus on the positives of the house and the neighbourhood.The Listing Agent is not going to disclose information about the crack house down the street, the rooming house next door, or the issues in the basement. If you work with a Buyer Agent, it’s their job to represent you and only you. They will get the pertinent information on the house and the neighborhood. They know what questions to ask. Something to keep in mind, some Listing Agents in Toronto don’t always know about the house and the neighborhood and the Buyer’s Agent already knows more than them. 


When an agent represents both the Buyer and the Seller whether you’re a Customer or a Client, they can’t tell you how much to pay for the property. With Customers, their duties are to the Seller so sharing historical comparable sales that don’t support the Seller’s price, for example, wouldn’t be working in the Seller’s best interests. In the case where the Buyer is a Client, and the brokerage represents BOTH sides, they can’t reveal anything they know to the Seller about the Buyer and vice versa. And they can’t recommend a price.


The Listing Agent’s goal isn’t to get you the RIGHT house, it’s to get you to buy THIS house. Having your own agent means they are motivated to find you the perfect house in the perfect neighborhood no matter how long that takes. Of course, some agents are primarily motivated by the possibility of a bigger commission, so the person they are most concerned with is themselves.


People who work with the Listing Agent almost always reveal their position – their budget, that they’re pregnant or that need to buy a house in the next 30 days. The Buyer’s Agent keeps all of that information confidential so it can’t be used against you in negotiations.


One of the most important qualities you need in an agent is negotiating skills. As a Buyer, you want someone who can negotiate on your behalf, and that’s not really possible under Multiple Representation.


Tagged with: buying real estate purchasing selling listing agents representation junction triangle sellers market high park
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