Real Estate's "Miranda Warning"

Why Buyers Shouldn't Talk Directly to Listing Agents

The person in custody must, prior to interrogation, be clearly informed that he or she has the right to remain silent, and that anything the person says will be used against that person in court.

--U.S. Supreme Court; Miranda v. Arizona decision (1966)

As a listing agent, I strongly discourage my selling clients from talking to the Buyer's agent, beyond exchanging social niceties.

In fact, direct contact between a represented client and the other side's agent is inappropriate; all communication is supposed to be between the two agents.

In practice, however, the Buyer's agent and Seller can cross paths when the former is previewing (looking at a home without their client), and the Seller is home.

"Hot Summer we're having" is certainly harmless enough.

"How many showings have you had, and what have people been saying?" isn't.

Seller Blunders

Perhaps the most damning -- and costly -- blunder I've heard of involved a Seller who let slip that their Contingency had been called, and that they'd lose their dream home unless they found a Buyer for theirs in the next 48 hours.

According to the agent who related the story, the Buyer's offer just dropped $20k.

Even if Sellers don't say anything compromising, sometimes, just their "body English" (facial expressions, general demeanor, etc.) betrays them. That's especially so if they're discouraged or impatient about how things are going.

Call it the real estate "Miranda Warning": anything you say (or telegraph) can and will be used against you.

Buyer Blunders

The same holds true for Buyers talking directly to Listing agents.

Case in point:

I recently met a Buyer, their agent, and the Buyer's contractor at a home I was listing to discuss repairs they were requesting of the Seller, including a wiring issue in the Kitchen.

Since the wiring was inaccessible and the Buyer insisted that the home required extensive remodeling (hence their low offer), I suggested it would be much cheaper to fix the wiring once the Kitchen walls were opened up.

At that point, the Buyer interjected, "Oh, no -- we love the Kitchen just the way it is!"

Oops.

Goodbye, negotiating leverage.