Giving a listing brokerage both sides to get called first, is that a strategy or a tax?

I'm in the license course now and the material treats dual agency as a compliance hazard, full stop. Nothing in it describes what you're describing, which is agents using it as a business development tool. Reading your post I understand the chapter better than the chapter did.

halyard, that's the part that surprised me too. The forms are all about consent and the actual behavior is all about who gets called.

flint, the question I'd ask is whether the access is attached to the dual agency or to you. If she calls you because you close, the dual agency is just how she prefers to get paid and you might keep the flow while insisting on your own representation. If she calls you only because of the double side, then you're renting the relationship and the rent goes up.

sable put it better than I would. I bought a 6-unit from an agent who had both sides and then bought another one from her two years later with my own agent, and she still called me first the second time. The flow was about me being able to close on a building with two vacant units. She grumbled about the commission and called anyway.

Is off-market flow through listing agents actually a big share of how these deals happen? I've been reading for months and it keeps coming up but I can't tell if it's most deals or a small slice.

juniper, on small commercial and small multifamily it's a large slice, and the reason is that a lot of sellers of those assets don't want a marketing campaign. On single family retail it's much smaller than forum talk suggests.

flint, on your numbers, 1 to 2 percent on price is the visible part. What I'd underwrite is the selection problem. An agent who calls you first with a clean asset is doing you a favor. An agent who calls you first with the asset she couldn't sell at list is using you as an exit and the discount she offers won't cover it. Track your four deals against the ones you sourced yourself and compare gross margin at exit, not purchase price. If the pocket deals underperform, the access wasn't access.

sextant, that's the part I'd never have thought of. Being someone's first call sounds like a win in every version.

The documents matter more here than the relationship. If you're going to keep doing it, the thing I'd insist on is a written consent that spells out what she stops doing, and separately a written agreement that any repair or credit negotiation goes through a party who is representing you. Whether you can bolt that on depends on your state's rules for dual agency and what your broker's forms permit, so ask the broker in writing before the offer, not after inspection.

My interest is in whether a consent form signed at the same moment as the offer is really informed consent in any meaningful sense. That's a question for a lawyer in your state, though I doubt you'd like the answer.

flint, you priced the access at 1 to 2 percent. Did you price the financing side? On thin margin rehabs my experience with borrowers is that the pocket deals close faster and the faster close is worth real interest carry. Two weeks off a hard money clock on a $300k loan at 11 percent is roughly $2,500. That belongs in your column.

I've done the opposite for eight years and refused every dual agency arrangement, and I still get called. It just took longer to get to that point. Slow buyer, so the trade looks different for me than for you.

The one thing I'd watch on the pocket flow is tenant condition. Every same-brokerage deal I've taken over management on came with worse tenant files than the marketed ones. Nobody assembled the file because the deal never had to survive an audience.

flint, you said one repair credit you never got. That's the whole thing for me. On a rehab the inspection negotiation is where I make or lose the deal, and a dual agent is structurally the wrong person to run it. I'd take the pocket call and then bring my own agent in for that one fight.

harrow, does that actually work in practice? Once the listing agent has written your offer I'd think the brokerage treats the file as theirs.

girder, in the offices I've asked, they'll do designated agency if there's a second agent free, and they'll refuse if there isn't. Small offices refuse most of the time.

Reading this thread as someone with zero deals, the thing I'm taking away is that the commission isn't the price of the service. It's the price of the relationship. That's not what the books say.

ember, that's about right and it's also the reason the regulators are circling. An arrangement where the double commission is what buys the phone call looks a lot like the steering problem the settlement was about, so I wouldn't build a five year plan on it.

flint, my honest disagreement with you is that your edge is speed and reputation, and both of those survive without giving up representation. You just haven't tested it.

sextant's exit margin comparison is the test I'd run before voting. flint, you have four deals. That's enough to look at, even if it isn't enough to conclude.