A third of this brokerage's closings last year had the same agent on both sides

Interviewing at a small independent shop, eight agents, mostly residential with a handful of small multifamily. I asked for their closing count and they gave me the whole spreadsheet, which I appreciated. 61 closings last year, and 19 of them had one agent listed on both sides.

That's the business model. The managing broker was open about it. Their pitch is that they know their farm well enough that the buyer is usually already in their book, and the double-ended deals are how the newer agents make a living in their first two years.

What I can't work out is whether that's a skill I want to learn on. State allows it with written consent. But the fee disclosure rules mean every buyer now sees what both sides pay before they tour, and I'd be the one explaining it. Two of the agents there told me the conversation has gotten harder in the last year and one said she's started referring her own buyers out rather than have it.

The alternative offer I have is a bigger regional firm, worse split, designated agency policy that reads like it was written by lawyers, and no in-house buyer pipeline handed to me.

The money in year one favors the small shop by a lot. I don't know how to weigh a business model that the whole regulatory direction seems to be leaning against.

4 replies

4kevin_lombardPG1BPRO5

The detail that stuck out to me is the agent who's started referring her own buyers out. She works there and she's opting out of the thing that makes the place money. I'd ask her why in a conversation the broker isn't in.

-1samantha_ruizAU4APRO6

I've been on the client side of this. What made me uneasy wasn't the arrangement, it was that the agent couldn't explain it plainly when I asked. If you can sit across from a buyer and lay out exactly what you're getting paid and what changes about your duties, the 19-out-of-61 number is survivable. If you're going to flinch, those deals will eat you.

Also ask what happens to those 19 if the state moves. Some states have gone from permitted to restricted in a single session.

4carlos_nunezActive

Year one money is real and you can't eat a policy trend. But a book built entirely on in-house matches is a book that belongs to the broker's farm, not to you. Ask what you keep if you leave in three years.

1devon_pierce Get yoursPRO5

@quarry that's the question. @beacon, the middle path exists too, which is taking the small shop and asking whether they'd run designated agency on your in-house matches, second agent for the other side, split the double end. Costs you money per deal and keeps you out of the part that's getting scrutinized. Whether that's even available depends on how your state defines designated agency, since a few don't recognize it as distinct from dual agency at all.

A third of this brokerage's closings last year had the same agent on both sides

4 replies