- The Washington Times - Friday, February 19, 2010

Every homeowner who opts to sell a home and buy another faces the same dilemma: Does it make sense to use the same real estate agent to list the home for sale and represent the seller for the next home’s purchase?

For families moving out of the area, the decision is simple because Realtors must be licensed to sell homes in each state. Few Realtors feel they have the expertise to help a client find a home in other parts of the country, but they often are able to recommend another agent they know through networking groups and Realtor associations.

“The first question homeowners need to ask is whether they are looking for a home in the same marketplace,” says Aidan Surlis Jr., an associate broker with Re/Max Leading Edge in Gambrills, Md. “The two main criteria for people when choosing a real estate agent are whether they are trustworthy and whether they will have knowledge of the local market.”

In the Washington market, many Realtors are licensed in Virginia, Maryland and the District, while others are licensed to work in just one or two jurisdictions. Some Realtors think they can best serve their customers by specializing in one neighborhood or county, while others believe in a regional approach.

Paul Sliwka, an associate broker licensed in Maryland, Virginia and the District with Coldwell Banker Residential Brokerage, says he listed property from Baltimore to Bristow, Va., in 2009.

“I strongly believe that agents should be experts in our whole region, and frankly, with all the technology at our fingertips, that isn’t that hard,” Mr. Sliwka says. “For example, if an agent doesn’t feel they know Arlington well enough, then I suggest they get in their car and drive around and look at homes until they do know it.”

Mr. Surlis takes a different approach.

“I do about 70 percent of my work in one area,” Mr. Surlis says. “If you are looking at homes within two miles of my office, I could probably tell you the color of the carpet in every listing. I’m pretty comfortable with properties about 15 to 20 minutes away, but I would probably refer clients to someone else if they are looking farther away. Some agents work bigger areas, but then they have just a little bit of working knowledge about each place.”

Peggy Speaker, an associate broker with Long & Foster Real Estate in the District, says that on the listing side, she feels confident she can give advice and sell a home regardless of neighborhood expertise.

“When you go to purchase a home, it is much more important to know an area well,” she says. “I meet lots of agents, so I prefer to recommend someone I know personally to represent a client of mine as their buyer’s agent if they were looking for a home in a neighborhood I don’t know much about.”

Ms. Speaker says she would prefer to recommend someone in her own company but she also would be happy to recommend agents from other companies, as she has met many reputable Realtors from a variety of companies in her more than two decades in real estate.

Agents who refer an agent to one of their clients generally receive a referral fee based on the commission earned once a transaction is completed.

When deciding whether to use the same agent for selling one home and purchasing another, consumers need to understand the issue of Realtor agency. In each transaction, a Realtor must clearly state whether she or he is representing the buyer or the seller. There is no conflict inherent in one agent working with the same clients to sell their current home and buy another, but Realtors who work as exclusive buyer agents (EBAs) do not accept listings because of the potential for a conflict of interest.

John Sullivan, an associate broker and EBA with Buyer’s Edge in Bethesda, Md., says, “If an agent is taking listings and representing buyers, there is the potential for dual agency, in which one agent is working with both the buyer and the seller in one transaction. If a Realtor who lists homes shows property to a buyer, what happens when that buyer wants to see a home she is listing? There is an incentive to show your company’s listings so that your brokerage sells their properties, but there’s a double incentive to show your own listings.”

Mr. Sullivan says the potential for this conflict of interest is even greater with Realtors who work for large brokerages because they naturally will have a larger number of listings.

“I would suggest that a traditional agent, in order to avoid the potential conflict, should tell their clients that they will not show them properties listed by themselves or their brokerage,” he says.

Mr. Surlis says consumers need to understand that a real estate agent can represent them in one transaction as a buyer’s agent and act as a seller’s agent in other circumstances without a conflict.

“There can be a benefit to clients to being able to work with an agent again to sell their home if they are comfortable with that agent,” Mr. Surlis says.

Most Realtors say that as long as the home sale and purchase are within a particular area or region, most consumers will opt to work with the same agent for each part of their transaction.

“If someone picked their agent to sell their home or to buy a home because they think that person is a good, trustworthy agent, then it just makes sense they would want to work with them for every part of their real estate decisions,” Mr. Surlis says.

Mr. Sliwka says consumers typically develop a rapport with their real estate agent, so they want to continue to work together for both buying and selling.

“I think the only reason for someone to choose to work with two different agents, as long as they are staying in the area, would be if they are unhappy with the performance of their Realtor,” Ms. Speaker says. “The Realtor-client relationship is a very intimate, intense one which people either want to continue or not.”

Mr. Sliwka recommends that customers unhappy with their agent discharge the agent from their listing, but if they are not comfortable doing that, they should at least feel free to work with a different Realtor for their home purchase.

“As long as the listing agent communicates well with the buyer’s agent, working with two separate agents can work fine,” Mr. Sliwka says.

Communication is one of the main reasons homeowners choose to work with one agent.

“Having continuity and communication is vital when you are selling and buying homes because there is a domino effect with real estate,” Ms. Speaker says. “If one side fails, you are better off having one person handling all of it and caring mostly about protecting the client’s interests on both ends.”

Mr. Surlis says if customers decide to work with one agent to sell their home and a second agent to find their next home, they cannot make assumptions that everyone knows every detail of both situations. Coordinating settlement dates and other pieces of the transaction requires what Mr. Surlis calls “first-rate communication.”

Mr. Sullivan says, “Communication should not be an issue if you are working with professionals who know the deadlines, have a timeline in place, have a tracking system and are staying in constant contact with the other agent.”

Some Realtors work with a team of agents in which one salesperson works primarily with buyers and another works primarily with sellers. Some Realtors have a preference for one side or the other of a transaction, but most will work with either side.

“New agents tend to be buyer’s agents and then add listings as they gain more experience,” Ms. Speaker says. “Right now, it can be much tougher to work with sellers since you need to talk to them about fixing up their home and listing it at a price they don’t like.”

Mr. Sliwka says customers benefit from working with an agent who both lists homes and works with buyers because experienced agents can share information about what buyers want with home sellers.

Ms. Speaker says most people start with discussing selling their home because most people need to sell their home before they start looking for another one.

“Selling the home has everything to do with what someone can buy, so we start by estimating what the sales price is and then make sure the sellers go to a lender to determine their financing options,” Ms. Speaker says. “It typically takes 30 to 60 days to sell now, and then about 60 days after that to go to settlement. The owners can ask for a two-month rent-back on the home if they need it, which means they have as long as four to six months to find a home to buy.”

Mr. Sliwka says each real estate transaction has to be approached independently.

“I try to put myself in my client’s shoes,” Mr. Sliwka. “For instance, if someone has been living in their home for more than 20 years and wants to sell, I talk to them about the condition of the home, realistic pricing and a strategy for selling. If someone is buying, I ask them about their objectives, what they are trying to achieve with the move.”

For most homeowners, the decision about where or whether to move depends on how much their home is worth and what they might be able to buy. Mr. Sliwka says everyone needs to keep his eyes on the objectives.

One final reason some consumers may choose to work with one agent for selling and buying a home is that real estate commissions may be reduced.

“It is possible that individual agents and brokers give a discount for multiple transactions within the same time frame,” Mr. Surlis says. “For example, when an investor decides to sell multiple homes at the same time, he would usually be given some type of discount.”

Mr. Surlis points out that legally, because of antitrust laws, real estate agents cannot set a standard commission or a standard discount for working on more than one transaction with the same person. He says, though, that commissions are always negotiable.

Homeowners with an established relationship with a real estate agent should discuss their objectives for buying and selling a home. Trustworthy agents will help their clients make the decision about whether their expertise is sufficient to be the best representative on both sides of the transaction.

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