Can a buyer work with multiple real estate agents?
Yes, a buyer can work with multiple agents as long as they don’t have a written exclusive (buyer representation) agreement with an agent or an agreement for same services from multiple REALTORS®. The most common service agreement would state that a buyer agrees to work with a specific agent, to buy a specific type of property or business, through that brokerage, in a defined area, over a period of time.
What constitutes an agreement? Agreements can be in writing or implied. If a service provider has been contacted by a consumer and asked that provider for services, then the service provider provides those services, the parties have an agreement.
You need to ask yourself why you want to work with multiple agents. Is it because you are looking over a broad area, maybe your having difficulty finding properties that suit your needs, or perhaps you need multiple areas of expertise in the real estate market? Take a few moments and think about this, because you will need to explain your reasons to the REALTORS® you want to work with.
Ultimately, if you are going to speak with multiple agents, transparency is key.
While a buyer can work with multiple agents let’s examine if they should.
Should buyers work with multiple real estate agents?
Finding a suitable property and getting to the closing table can take time… a lot of time, energy and money on the buyer’s part and an agent’s part too. Real estate agents only get paid when they successfully close a transaction to sell or buy a property. So from a real estate agents perspective buyers should only work with one agent.
Who wants to go to work every day, accumulate expenses and not get paid? Nobody. However, from a buyer’s perspective, they may feel it’s beneficial to work with more than one agent. So let’s look at the pros and cons of working with multiple agents.
Pros of working with multiple agents
Areas of Search
If a buyer is looking in a broad area, multiple counties, working with one agent probably isn’t optimal. Buyers do best when working with a local REALTOR®. With that being said, buyers need to let their agent know they are looking in other areas with other agents.
Areas of Expertise
If a buyer is looking for different types of investments at the same time, for example multi-residential, office and vacation properties; working with one agent probably isn’t realistic.
Most REALTORS® have taken some form of specialty training and earned specific designations associated with different real estate markets. Buyers should seek out REALTORS® with expertise in the services they need. With that being said buyers need to let their agent know they are looking in other markets for different investments with other agents.
Different Information
No two agents are alike therefore buyers are going to get different service levels and different expertise, some good, some bad. Real estate agents have access to the same exact information, so it comes down to how they search for properties. Some might use specific criteria resulting in minimal options. While others might use broad criteria resulting in a lot of options to choose from. Buyers will quickly learn which agents know their craft and which ones don’t.
Cons of working with multiple agents
Reduced Level of Service for Non-Exclusive Customers
Buyers that wish to work with more than one agent or brokerage are referred to as non-exclusive customers. A REALTOR® is obligated to treat every person in a real estate transaction with honesty, fairness, and integrity, but unlike an exclusive client, provides a non-exclusive customer with a restricted level of service. Services provided to a customer may include showing the property or properties, taking customer direction to draft an offer and present the customer offer etc.
Brokerages use a Customer Service Agreement to document the services they are providing to a non-exclusive buyer or seller customer. A Buyer Customer Service Agreement acknowledging a Customer relationship is a “non-exclusive” agreement, meaning both parties agree to work with other people.
As an non-exclusive customer, the brokerage doesn’t owe you a fiduciary duty. Your salesperson may assist you with filling out the paperwork for your offer, but you will have to come up with your own negotiation strategy to purchase the property, for instance. They have to be fair and honest, but they do not have an obligation to promote or protect your best interest.
When the buyer works with one agent, and the brokerage works with one client, the brokerage owes them a fiduciary duty. That means the brokerage must follow your lawful instructions, promote and protect your best interests as a buyer during a real estate transaction, and refrain from sharing any information you don’t want them to disclose. Your salesperson or broker can help you prepare and negotiate an offer to seek the most advantageous terms on your behalf, refer you to other professionals, including home inspectors, and assist you in performing due diligence on a property.
Different Information
Yes, different information was a pro, but it’s a huge con too. Since agents have access to the same information odds are a buyer is going to be bombarded with the same information from multiple agents. Not only that, multiple agents can send hundreds of properties that don’t even meet the buyer’s search criteria. In order for a buyer to ensure they don’t miss the “perfect property” they’ll have to take the time to review all of the listings. With that being said they might scroll right by the perfect investment because they’re overwhelmed and not paying attention.
When a buyer works with one agent they’re only going to receive useful information. Not duplicate listings or listings that don’t fit their needs.
Wasting Time
Working with multiple agents can be exhausting! Trying to keep track of who sent what, who showed what, who said what. Even the most organized person will have difficulty keeping track of everything. And if the buyer is looking on their own they will certainly waste time inquiring about properties that aren’t even available.
When a buyer works with one agent that one agent will keep track of everything for them. What listings they’ve sent and what properties they’ve seen. They’ll also be able to investigate any listings a buyer finds, for those buyers who can’t help but look on their own.
Smaller Pool of Agents
There will be a smaller pool of agents willing to work with you. If you choose to work with multiple agents, you must inform each agent of your intention. Not only will this provide transparency for all parties involved, but it will allow any agents who require exclusivity to politely decline your business.
Commitment
If a buyer is not committed to one real estate agent odds are a real estate agent isn’t going to be committed to the buyer. How much effort is an agent going to put forward when there is a strong possibility they won’t get paid? Not only that, what type of agent is going to work with a buyer who’s working with multiple agents? Odds are not the best in the business.
Now, this is assuming buyers working with multiple agents are upfront with every agent, which a majority probably won’t be. Here’s the thing, outstanding agents will quickly figure out a buyer’s loyalty to them and fire them on the spot or just stop communications.
When a buyer works with one agent that one agent is going to bend over backwards for their client. When that new listing hits the market they’ll make sure their client is the first one in the door. When a fire starts they will promptly put it out.
Risk of Paying Multiple Commissions
If an agreement exists with a broker, it’s important to understand what you may be on the line for — if you’re not careful and have multiple agreements (even if they’re just implied) you could end up being on the hook for multiple full or partial commissions for all of the agents you worked with.
When a buyer partners with one agent fees are predictable and risks for unexpected expenses are minimized.
No Rapport
The property buying process can be a long, sometimes stressful process. How is a buyer going to build rapport with an agent when they’re basically using multiple agents as door openers? The answer is they’re not.
When a buyer is working side by side with one agent that agent will quickly learn what type of property or business they’re looking for. This, in turn, is going to keep a buyer from looking at properties their agent knows won’t work. Their agent will also have suggestions they won’t have even considered. Top REALTORS® know their market. They know the builders, the inventory, and pricing.
Working with one top agent is priceless. It makes buying a property fun and exciting, not stressful, and a constant scramble.
Ethical concerns
Although there are valid reasons why it may be beneficial to work with multiple agents, ethical considerations should be taken into account. Buyer’s agents only receive their commission when they close on a deal. Working with multiple agents means that whichever one doesn’t close on a property with you misses out on their compensation. Simply put, you’re asking one of the agents to work for free and pay for your expenses to find a property out of their pocket, and that is wrong.
While there aren’t any regulations against working with multiple agents on buying and selling your property, REALTORS® affiliated with the Real Estate Council of Ontario (RECO) have a specific code of ethics they follow that requires them to not interfere with another agent’s sales. The code of ethics states that a REALTOR® cannot communicate with another agents’ client directly, they must go through their brokerage. It also states that a REALTOR® can’t try to get you to change brokerages for the services that is already being provided to you by another brokerage.
ONTARIO REGULATION 580/05, CODE OF ETHICS
Dealings with other registrants
- (1) A registrant who knows or ought to know that a person is a client of another registrant shall communicate information to the person for the purpose of a trade in real estate only through the other registrant, unless the other registrant has consented in writing. O. Reg. 580/05, s. 7 (1).
(2) If a broker or salesperson knows or ought to know that a buyer or seller is a party to an agreement in connection with a trade in real estate with a brokerage other than the brokerage that employs the broker or salesperson, the broker or salesperson shall not induce the buyer or seller to break the agreement. O. Reg. 580/05, s. 7 (2).
Another big part of the code is related to honesty, and if the client is not being honest about how many different agents are involved with helping to buy or sell the property, then this will be problematic.
Beyond ethical issues, if you do work with more than one agent without being transparent with each of them, you could gain a bad reputation in your area and find it challenging to hire an excellent agent in the future.
There are some buyers who practice contacting multiple agents. These types of buyers are often called principal buyers, and they only call listing agents (instead of buying agents) because they don’t require representation. Principal buyers generally are more well-informed of real estate practices, and agents are familiar with their practices.
Unable to Form a Team
Disagreements between agents from different brokerages can lead to frustration. One agent may offer a piece of buying advice that another agent disagrees with. There could be scheduling conflicts between the agents and difficulties in getting agents to commit to any decisions made by other agents. Ideally, a buyer won’t have to referee these disagreements, but they may feel like their in the middle of a tug-of-war—and that can have its difficulties.
When a buyer partners with one agent, they are not working alone. REALTORS® are masters in collaboration teaming with inspectors, lenders, lawyers, municipalities, colleagues at their brokerage, other REALTORS® and everyone involved in real estate.
Furthermore your signed agreement is actually with the brokerage, they can assign more than one REALTOR® for your property search if a coordinated team approach is your preference.
When it makes sense to work with more than one real estate agent
If you’re searching for a home or property in a broad area, you can rationalize working with two different agents.
If that’s the case, you should notify both real estate agents and make sure your buyer-broker agreement reflects that arrangement. For example if your preferred locations for a new property are Markham and Durham; you could consider working with separate agents for those individual areas.
Again be transparent with both agents and specify that you are looking for one property in Markham or Durham. Just make sure the geographical areas in the agreements of service for each doesn’t overlap.
When it doesn’t make sense to work with more than one real estate agent
If a buyer is looking for a specific property type in a specific area, for example gas station, child care centre or automotive garage, working with more than one REALTOR® won’t improve your chances of finding a suitable property.
REALTORS® have access to the same information, particularly commercial REALTORS®. They usually subscribe to the same information gathering systems and see the same available properties across different platforms.
When interviewing REALTORS®, ask them what systems they use to search for properties to confirm this. If they use the same systems, you are not going to get access to more inventory and most likely will get caught up in the conflicts that this situation produces.
Why real estate agents generally demand exclusivity
Unlike most professions with steady paychecks, real estate agents usually get paid only by commission—in other words, a cut of the real estate deal if it goes through. So when showing you properties, answering your questions, and negotiating on your behalf, an agent is essentially working for free.
That’s why exclusivity agreements are critical for agents—without them, there is no guarantee they will get paid for their work. And even worse, without this agreement, it leaves the door open for a buyer or seller to switch to another agent right before closing—a nightmare for agents who spent weeks on a deal only to realize they won’t get compensated!
Other reasons to think twice about working with multiple real estate agents
Just because you can do something, doesn’t mean you should. As it turns out, working with multiple real estate agents isn’t as clever a strategy as you might have thought.
You probably won’t find your dream property any faster by asking multiple agents to search listings for you. Why?
All real estate agents have access to the same information through their multiple listing services. If you work with more than one real estate agent, chances are none of them will put forth much effort because you may purchase through another agent. They will work harder for you when they know they will eventually get paid for their efforts.
It’s in your best interest to do your research and choose one real estate agent who meets your needs. Consulting around without an honest intent to work with an agent will result in mediocre results.
Why you should interview multiple real estate agents before committing to one
Choosing a real estate agent to work with is one of the most important decisions you’ll make during your buying or selling journey. After all, this is the person who will serve as your first line of defense for finding your dream property or selling your property for top dollar.
Because of the considerable amount of time you’ll spend with your agent, it’s essential to find someone that you click with—someone you could even see yourself being friends with. But don’t forget: This is a mutually beneficial business relationship. The person you select will benefit directly when you buy or sell a home, so you want to make sure your agent has your best interest at heart and isn’t trying to make a quick buck.
What if I don’t like my real estate agent?
You followed all the rules: You interviewed multiple real estate agents, you settled on a favorite, and you even signed an exclusivity contract—only to realize it might not be a good fit after all.
The first step is to have an honest conversation with your agent, where you will ask to cancel the contract. Because you both signed a legally binding document, you will need the agent’s agreement in order to officially terminate. In other words, don’t work with a new real estate agent until you get your current contract sorted out.
Final thoughts
Just because a buyer can work with multiple agents doesn’t mean they should. Buying and selling real estate is a full-time job. A job only licensed real estate agents know how to do effectively. Buyers can certainly work with multiple agents and the agent who finds them a home “wins,” but is the buyer really winning?
When it comes to negotiating an offer do they have the best agent in their corner? If inspection or appraisal issues arise do they have the best real estate agent advising them? There is more to real estate than finding a home, that is the fun and easy part. ANYONE can open a door, but can they provide the best advice?
Purchasing a home, business or commercial property is usually the biggest investment a person will make in their lifetime. So the agent guiding them through this process shouldn’t be whoever opened the door.
Click here for your copy of “Working with a REALTOR®” which explains relationships and multiple representation in real estate.
Click here for more information on the differences between a “client” and a “non-exclusive customer” relationship
