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.

The "Due Diligence" Showing

I Guess That Qualifies as Feedback

I was wondering what was up with an agent who showed a couple of my listings near Cedar Lake in Minneapolis in the span of a few days last week.

The feedback was quick and generic, and there was no follow-up interest.

The "mystery" was cleared up this morning when I saw the agent's new listing on MLS, in the same area and general price range as mine.

Rules of the Game

Before Sellers get up in arms over the foregoing, two caveats: 1) an agent who is "just" previewing today may have a real, live Buyer tomorrow -- or work with a colleague who does.

That's especially the case if they're about to list a competing property and pull in a ton of prospective Buyers looking for a home in the same general area and price range -- Buyers who, for whatever reason, may not be candidates for the agent's new listing, but might be for yours.

If your home is for sale and on the market, there really is no such thing as bad exposure.

Caveat #2: your agent likely did the same thing before your home came on the market.

By way of clarification, most agents who want to see a home, but aren't actively working with a suitable Buyer, will set up the showing as a "preview."

That way, the home owner can hang around, and doesn't need to go through the fire drill of getting everything shipshape for an actual showing.

That's an especially nice courtesy in Minnesota around, oh, January.

P.S.: I am careful to coach my selling clients not to volunteer anything to the previewing agent if they happen to be around -- like, how many recent showings there have been, feedback from same, etc.