Double End Real Estate Deal
This probably sounds ridiculous and completely unconventional, but in today’s ultra-hot real estate market, you might have a better chance of getting your offer accepted if you don’t have an agent.
Think about it this way. Most folks looking to purchase a home have a buyer’s agent that represents them. When they find a property they like, their agent makes an offer and communicates it to the sellers via their listing agent.
The listing agent then talks to the seller(s) and assesses the offer. Here’s the problem nowadays. Many, many homes now receive multiple bids, making it increasingly difficult to get your offer accepted, even if it’s a great one.
To separate yourself from the crowd, you could approach the listing agent and tell them you don’t have an agent yourself. In this case, the listing agent could represent both parties or recommend someone from their office to represent you.
As a result, your offer would now become more attractive, assuming it was still positive in the eyes of the sellers.
Double Ending the Commission
This is known as “double ending” in the real estate realm because the listing agent essentially gets both ends of the commission. So if the commission is structured like a typical 6%, with 3% going to each agent, the listing agent could snag the entire 6% themselves.
Clearly this makes your agent-free offer more enticing because all of the commission stays in-house with the listing agent, or perhaps with an associate in their office.
As such, your offer is now getting a lot more notice, again, assuming it’s a reasonable offer and that you’re a qualified buyer who is able to come up with financing or cash.
The listing agent still has to fairly represent the seller and consider offers from those working with outside agencies as well. But this should at least get you noticed and keep you in the running if there are multiple bids.
For example, if you offer $500,000 for a home and someone else submits the same offer, yours should get a nudge forward if all else is equal.
Is It Risky? Unethical?
Now there are lots of real estate agents out there that aren’t fond of double ending deals because they think it can get pretty gray very fast.
After all, the real estate agent has to balance the best interests of both seller and buyer in this scenario, which can clearly be quite tricky.
What happens if an unscrupulous agent doesn’t submit all offers to the seller in order to guide them towards the one with the double end commission?
Or what if they mislead the buyer into making a higher offer than necessary to get the home? A lot can go wrong in a hurry, there’s no doubt about that.
But you could also argue that your own agent could mislead and deceive you and get you to overpay for a home. Or you could simply overpay because they’re not a very good agent. Or because your only chance of snagging the home is a super high offer.
And an agent who represents both buyer and seller will ostensibly want to work with them again to find a new home for the seller and eventually list the buyer’s new home. So they should still be motivated to do right for both parties.
This certainly isn’t a strategy for everyone, but nowadays lots of people seem to do their own research and come up with their own reasonable offers based on their own knowledge.
If someone scours Redfin and Zillow, finds a suitable property, tours it on their own, and determines an offer price on their own without the help of a real estate agent, why not approach the listing agent and ask for representation?
One would just need to be firm in their offer to avoid getting taken for a ride, and it would be disclosed that the agent is representing both buyer and seller, so the sellers would also need to be comfortable with the offer.
My assumption is that those who are down on double-ended real estate transactions see it as a threat to real estate agents because one of the usual two individuals in the transaction is essentially squeezed out.
Unfortunately, it’s becoming increasingly common for would-be homeowners to go it alone, thanks to all the new websites and technology available, and with demand so hot, you’ve got to give yourself any edge you can get. Just know the risks involved before you proceed.
Read more: How much to offer on a house.