If this headline caught your attention, odds are your company is transferring you to another location or you’ve just accepted a job with a new company in another town, state or country.
In either case, your employer has put you in touch with their relocation company and they have given you the name of the real estate agents they will require you to use to sell your current home and purchase your new one.
It probably didn’t occur to you to ask if you have to use those agents, because, frankly you have plenty of other things to be thinking about right now. However, it’s a question you should ask, especially with regard to the agent who will be protecting your best interests when you purchase in your new hometown.
Why? Because when most relocation companies contract with local real estate agencies, they typically partner with one of the largest in the community. Usually, large agencies have a lot of listings. This can work out pretty well on the selling end because they have plenty of tools to employ to get your house sold.
It’s not such a good idea on the buying end because, well, they have a lot of listings.
Stick with me for a minute because this is CRITICAL to you getting the kind of protection you deserve when making the largest purchase of your life.
First, understand that when a seller lists a home, their contract isn’t with the listing agent. It’s with that agent’s company. That works when you’re the seller, because now every agent at that company is representing you and your house. The bigger the company, the more agents working on your behalf.
It’s the same when a buyer signs an agency agreement with the agent they want to represent him/her. The agreement is with that agent’s company. If, as a buyer, you opt to work with an agency that has a lot of listings, there is a high risk you will fall in love with one of those listings. First, it’s just a matter of odds. Second, the agency is probably going to pay your agent more if s/he sells you one of their listings, so your agent is motivated to show you more of her company’s listing. If you ultimately fall for one of those homes, your agent transitions from a buyer’s agent to a dual agent and that’s where things go south.
What does that mean? That your agent is no longer allowed to advocate for your best interest because her company now represents both you and the seller. Now, neither your agent nor the listing agent can give their client any advice that could be viewed as helpful to one side over the other. Great for the company and the agents, both of whom will maximize their income. Not so good for either you or the seller.
How to avoid this unfortunate situation? Whenever possible, choose to work with an exclusive buyers agent who is with a firm that doesn’t take any listings.
If there are no exclusive buyers agents in the market where you’re purchasing, find a buyers agent with a company that has far fewer listings, making it much more likely that you will not be thrown into a dual agency situation.
“But, the Relo company said I HAD to use their agent or they wouldn’t provide all my moving benefits.”
Yes, they did. But, you don’t.
If you are insistent, the relocation company will give you permission to use the agent of your choice. However, there is one big “if.” The agent you work with must agree to pay the relocation company a sizable referral fee, usually 35-40% of their gross commission.
Will most buyers agents agree to that? Yes, because the opportunity to demonstrate their superior performance to another person who may serve as a valuable referral source in the future is worth the money they’ll have to give to the relocation company.
When the relocation company recommends an agent, thank them for their help and insist on being allowed to select your own. Then let us connect you with a buyer’s agent who will work hard for you (rather than their company’s sellers) and will meet all the requirements of your relocation company.