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Mitch Rolsky
Mitch Rolsky - REALTOR®

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Mitch Is Listing Agent: Share In Lower Seller’s Costs

Dual/Limited Agency… Against the Law in Most States

Mitch Feels it Unethical & Found Ways To Help Buyers Save In Lower Selling Fees!

Dual or Limited Agency is when the same REALTOR tries to represent both the Seller and the Buyer in the same transaction. Indiana is one of a few states that still allows Limited or Dual Agency. The law requires Buyers AND Sellers to sign a document acknowledging that both parties are agreeing to Limited Agency but that document does not typically reflect or explain any negatives associated with being in a limited Agency transaction.

 

With Keller Williams Realty Indianapolis Buyers and Sellers will be required to sign or acknowledge receiving several documents predominately focused on Limited or Dual Agency. Additionally you will see several other places that limited or dual agency is discussed including in 2014 a “check box” on every Metropolitan Board of REALTORs Purchase Agreement. This CYA is all there in an effort to eliminate law suits. In fact one of the most common reasons for law suits, related to the sale or purchase of a property, is that one party feels that the Limited or Dual Agent inappropriately advocated or represented the other party’s interests.

 

The conflicts when this happens are numerous. As a buyer your goal is obtain the best price and terms while the Seller’s goals are typically to get the highest price.  Usually the only person who “wins” in Dual/Limited agency is the Realtor who receives the commission from both sides of the transaction. Since commission fees are most often paid by the Seller that means Sellers factor these fees in to the the amount they are wanting to get for the property.

 

Check out Tab 3 ‘Options To Share In Lower Fees’ to learn about ways you can save on fees

Do anything that could be perceived as representing the interests of ONLY the Seller or the Buyer. A few examples of things a Listing Agent can’t legally do as a Dual/Limited Agent include:

 

  • Suggest how you should counter a Seller’s offer or counter offer
  • Propose writing a Purchase Agreement or Inspection Response that favor’s your interests as the Buyer
  • Share any information with you they have learned about the Seller that might interest you or reflect the Seller is willing to sell their place for less or share information about the Seller that might make you want to change an offer.
  • Share with you that Inspection items, requested by you as the Buyer, that the Seller is unwilling or unable to do that would otherwise be usual and customary.
  • Advise you which items within an Inspection Response you should agree to address vs reject.

 

Check out Tab 3 ‘Options That Lower Fees’ to learn about ways you can share In any savings the Sellers have in fees.

3choices-300x200Usual and customary Listing Brokerage Commission fees are 7% +$179 for homes and condos that sell for $300,000 or less and 6% + $179 for homes and condos that sell for more than $300,000.  (Ask Mitch about commission fees for homes and condos that sell for more than $600,000)

 

When Mitch is the Listing Agent, and a you as a buyer have interest in writing an offer on the property then Mitch provides the seller, and the buyers, options that can lower the Seller’s selling commission fees. Most Sellers understand that the Buyers expect to share in the savings Seller’s receive from lower fees. This usually creates a “win-win” situation where buyers can purchase the property for a lower amount than usual and the sellers still actually net more at closing than they typically would net when two agents are usually involved even after “sharing” some of these savings with you the Buyer.

 

When Mitch is the list agent and he is also your buyer’s agent and you as the Buyer wanting to write an offer on the property the first option Mitch gives is to the Seller. Mitch offers to stop representing the Seller for negotiations with  you as the Buyer. In this transaction Mitch will represent ONLY you as the Buyers.  To be honest this is not the 1st choice for most Sellers! Most Sellers have busy schedules and understand the importance of having a strong experienced negotiator like Mitch that understands the current market and knows how to get the best sales price and terms for the Seller. Frankly, Mitch never recommends this option but he understands that for many sellers self-representation may be what they actually would prefer.

 

In this scenario, because Mitch will NOT be representing you as the Seller, and working without the benefit of another agent on the other side of the transaction, means that Mitch will be doing things that a Sellres own agent typically would handle to help insure that we get the sale closed.

 

For example Mitch will help facilitate preparing offers, counter offers, inspection responses and similar documents that reflect the desires as the Seller. Mitch does NOT advise sellers as to what your offers, counter offers or responses should include. But, Mitch will only prepare the documents based on the Seller’s direction for them to review, accept and sign before submitting these documents to you as the Buyer(s) for you review and respond.

 

After acceptance of the purchase agreement Mitch will also followup with the Seller to insure lender pay off information is provided to the title company along with any Homeowner Association documents that must be provided to you as the buyer etc. Once you as a Buyer submit any inspection responses then Mitch will also prepare an inspection response for the Sellers based on the Sellers direction but again Mitch will not advise or represent the the seller beyond typing up the paperwork.

 

Because Mitch will be doing more work than he would otherwise be doing, when there is an experienced REALTOR representing the other side of the transaction, the reduction in fees are not quite half of what they would typically be. In this option if the home is selling for less than $300,000 the seller’s total commission will be only 5.25% versus the usual and customary 7%. If the Sellers home is selling for more than $300,000 than the Seller’s total commission will be only 4.75% versus the usual and customary 6%. Regardless of the Home’s sales price this option can reduce the sales commissions by thousands of dollars.

 

You and the Sellers will also sign a No Agency Doc when Mitch Represents Buyer Only that confirms that the Sellers understand that I will ONLY be representing you as the Buyer in this transaction and that the Seller, have declined to have their own representation.

Mitch will continue to fully represent the seller but will give you as the Buyers the option to represent yourself.  Again this may not be viewed as a viable option for many buyers and especially for 1st time buyers! While, Mitch never recommends this approach he does understand that for many experienced buyers self-representation may be what they actually would prefer.

 

In this scenario, because Mitch will be representing the Seller, but not you as the Buyers, that means there won’t be another agent on the other side of the transaction. So, Mitch will be facilitating things that a your buyer’s agent typically would handle to help insure that we get the sale closed.

 

For example Mitch will prepare the your offers, counter offers, inspection responses and similar documents that reflect your desires as the Buyer. Mitch does NOT advise you as the Buyers in this role as to what the offers, counter offers or responses should include. But, Mitch will only prepare the documents based on the your direction for you to review, accept and sign before submitting these documents to the Sellers(s) to review and respond to.

 

After acceptance of the purchase agreement Mitch will also followup with you as the Buyer’s and your lender to insure loan application and insurance confirmation have occurred.  Once the inspection has occurred Mitch will prepare a response based on the you direction as the Buyer.

 

Because Mitch will be doing more work than he would otherwise be doing, when there is an experienced REALTOR representing the other side of the transaction, the reduction in fees are again not half of what they would typically be. In this option if the home is selling for less than $300,000 the Seller’s total commission will be 5.25% versus the usual and customary 7%. If the home is selling for more than $300,000 than the Seller’s total commission will be only 4.75% versus the usual and customary 6%. Regardless of the Home’s sales price this option can reduce the sales commissions by thousands of dollars.

 

You and the Sellers will also sign a No Agency Doc when Mitch Represents Seller Only that confirms that you as the Buyer, and the Seller, understand that I will ONLY be representing the seller in this transaction and that you as the Buyer have declined to have their own representation.

When Mitch refers you as a Buyer to a fellow Keller Williams Realty Indianapolis REALTOR that you come back to Mitch if the fellow Agent is not able to help you get the home under contract. So the Agent has an incentive to get a deal done on this place! Because the Agents won’t be investing the usual amount of time showing you as the buyer multiple places and the agent did not have the usual marketing costs or time investment to acquire you as the Buyer they are willing to receive lower commission than they normally would. The other REALTOR pays Mitch a referral fee and Mitch uses that fee to lower the total commission fees the Sellers pay as part of closing. The Sellers understand you as the Buyer expect to share in these savings.

 

In this option if the home is selling for less than $300,000 the Seller’s total commission will be 6% versus the usual and customary 7%. If the home is selling for more than $300,000 than the Seller’s total commission will be 5% versus the usual and customary 6%. Regardless of the Home’s sales price this option can reduce the sales commissions by thousands of dollars.

You as the Buyers always have the option to interview and negotiate with REALTORS that you may know to represent you as a buyer.

 

However most Buyers understand that there are no savings associated with selecting your own Agent and know that if they are not successful in getting this property under contract, and they did not work with a REALTOR that Mitch referred them to, that it would be unlikely Mitch would continue to help them find another place.  While it’s always the Buyer’s decision… this is actually the least selected option of those listed above.