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.

Chaperoned Showings

"Listing Agent Must be Present for All Showings"

Most listing agents -- myself included -- are usually not thrilled when a client insists that you be there for all first showings.

For one thing, it's an imposition on your time; for another, prospective Buyers and their agents can view it as crimping their schedule and privacy (showings are typically set up as a one hour window; if the listing agent needs to be present, they must commit to a specific time).

However . . . for an upper bracket home with a lot of subtle features, it can be a real advantage for the listing agent to provide a guided tour (then absent themselves so the Buyer and their agent can talk privately).

As I discovered Saturday, it also affords the listing agent the opportunity to tailor their pitch to the specific Buyer -- and can save a lot of time, depending on the Buyer's questions and interests.

Other Pluses

So, I found myself fielding the Buyer's questions about local schools, Comp's and recent price trends, (lack of) plane noise, nearby bike paths and trails, etc. -- questions that their agent, located in the 'burbs, knew nothing about, and which I, as one of the leading Realtors in the area (and a neighbor!) knew in my sleep.

Meeting the Buyer and their agent also afforded me a chance to discuss the other homes on the Buyer's showing list later that day.

It did not exactly hurt my credibility -- or my client's selling chances -- to be able to discuss each of the homes on the list, their pluses and minuses relative to my client's home, the amenities of the surrounding neighborhoods, etc.