All buyers should understand Double-Ending. REALTORS® like it because they get paid more, but for you, it could be a disaster. 

Here’s a Common Scenario

You’ve been following the market online for a while and finally found a home that looks perfect for you. You took a drive past, and it’s everything you thought it would be. Priced right, good area—exactly what you’re looking for. What Now?

Well, because you aren’t working with a Realtor, you call the name on the sign. This person is known as the listing agent. You explain, excitedly, that you are considering making an offer. The listing agent jumps all over it and offers to show you the home. He tells you to bring a cheque.

You have a look, and the home doesn’t disappoint—it’s the one! You tell the Realtor (whom you’ve just met) you want to write an offer. That’s fine, right? He’s a Realtor, so why not let him write the offer for you?

Double-Ending Explained

First off, I’ll tell you how Realtors get paid. The short answer is to sell a home. This is also the long answer. We receive a commission on the successful sale of a home. Unless we work part-time at the Home Depot, we have no other income.

Further, the seller supplies the commission we earn—buyers don’t pay commission. The Realtor representing the buyer then gets paid a portion of the total commission offered by the seller. It’s usually a 50/50 split, so if the seller’s full commission is 4% of the sale price, 2% goes to the agent that brings the buyer (writes the offer), and 2% goes to the agent that listed the property. 

Most home sales in Regina (90% plus, I’d guess) involve two Realtors, one representing the buyer and the other the seller. From time to time, though, the listing agent represents both the buyer and the seller in a transaction. This is known as double-ending. Realtors like this because they can earn both sides of the commission split or “double” the amount of money.

Here’s the Problem With It

It’s a conflict of interest. The Realtor has “inside” information on both parties.

I guarantee the listing agent listens carefully to every sound that comes from your mouth. Clues about your financial ability, motivation and where your head is at.

The listing agent also has a relationship with the seller. He knows why the seller is moving and usually knows how much they’ll take for the home. He may even be good friends with the seller.

With This in Mind, Can You be Sure the Listing Agent is Acting in Your Best Interest? 

How do you know he didn’t overhear (or maybe you just told him) that you would pay $275,000 for the home but would like to offer $265,000 to see if the seller will accept it. When the counter comes back at $275,000, you’ll wonder if the Realtor sold you out.

Realtors follow rules (I must stress) to ensure this doesn’t happen and all parties are treated fairly. When a Realtor acts for the buyer and the seller in a transaction, they must not discuss money or motivation with either side.

This means that when you look to the listing agent for advice on how much to offer or inquire as to why the seller is moving, they have to close their mouth and tell you they can’t help you. You’re on your own to try and figure out how to proceed.

Doesn’t Seem Very Helpful, Does It. So What Should You Do?

The best solution is to have a different Realtor from another brokerage work on your behalf. They can serve you better by helping you come up with a strategy to get the property for a good price and make sure all the inspections are done correctly.

Since Realtors are free when you buy—we get paid by the seller—it doesn’t cost you any money to have better representation.

Having someone that doesn’t have an interest in the subject property working on your behalf ensures you get fair and impartial advice.

Curtis