The Listing Agent, whether good, ho-hum, or bad, represents only the seller, and tries to get the highest possible price for the seller. The Listing Agent signs an agreement with the seller that stipulates a commission. That commission is usually 6 percent of the selling price and it is split 50/50 between the Selling Agent and the Listing Agent. So the Listing Agent has an agreement with the seller that he will get paid 3 percent of the sales price when the house sells and closes. The job of the Listing Agent is to market the home and represent the seller’s best interest. So if a buyer walks into an open house and asks the Listing Agent if the home is priced correctly, even if it’s $100,000 over priced, what do you think the Listing Agent will say? "It’s a great house and priced really well," is a typical response. And if the buyer wants to work with the Listing Agent, then he may be able to give up some of his commission to help the deal go together and save the buyer some money.

This is a false economy and here’s why. If the selling price of the house is $300,000 and the commission is 6 percent, the total commission is $18,000. The Listing Agent will get $9,000 and the Selling Agent will get $9,000. The Listing Agent knows that he will receive $9,000 when this house sells. Now the unsuspecting buyer walks in and uses the listing agent to write up the offer. The listing agent says he will give up $4000 of his commission so the buyer can get the house for $4000 less. So the seller gets $296,000, the listing agent gets his $9,000 for the listing side and $5,000 from the selling side, for a total of $14,000. The buyer saves $4000, the seller gets his full price because the listing agent gives up $4000 in commission, and so the seller’s net is the same as if they sold it for $300,000. Every one wins…right! Wrong! The buyer in these situations usually pays too much for the house. The buyer has NO REPRESENTATION. The Listing Agent becomes a Consensual Dual Agent and says that he will represent both parties, but that is just like going into court and telling the judge that you represent both the plaintiff and the defendant…it just doesn’t work! The buyer has no one advising him or her whether the house is priced correctly. The buyer has nobody working for him or her during the entire process. The Listing Agent makes $14,000 — not $9,000. That’s $5,000 more then he thought when he listed the property – who do you think he represents? The sellers make everything they wanted to. And the buyer…well the buyer may have paid $20,000, $30,000, perhaps $40,000 too much for the house.

So we strongly suggest: Never ever use the Listing Agent to write up your offer.

Effective Austin real estate agents possess a very strong sense of the Austin real estate market and are attuned to its nuances and subtle changes. A good buyers agent’s approach to the clients needs are well thought out and documented. Of course, we think we’re great buyers agents, but we realize we may not be right for everyone. You can read about our approach here.