Why Limit Private Discussion Between Buyer & Seller?

There are a number of reasons why to limit private discussion between buyer and seller when both parties are represented by agents prior to closing. Below I’ll cite some of those and provide some examples from my own experience. Keep in mind that the best offer financially is sometimes turned down because of other non-financial factors.

You could jeopardize your ability to perform a transaction with a seller.

Sellers will tend to be more ignorant & thereby less reasonable vs agents since a seller isn’t as knowledgeable regarding standard business practices in real estate & the law. While real estate agents can direct some sellers, agents can be biased to not disagree with their clients to keep them happy, with some sellers having very strong opinions. If you communicate directly to a seller about something, there's no agent filtering process from your agent nor the listing agent, and it can easily hurt the ability for a transaction to happen. For instance, if a buyer tells a seller a lowball offer they are thinking, & the problems about the property that they think should justify a lower price, it could easily cause offense to the seller, where if another offer comes along soon after, or has already come in, the seller is more likely than they would be otherwise to engage the other offer rather than the one where they were offended. Even the kinds of questions that you ask can impact whether or not a seller goes with your offer as a buyer.

You could jeopardize your ability to perform a transaction with a listing agent.

If you are a buyer & you say the wrong thing in discussion or even engage in much discussion with a seller and the listing agent finds out, in some cases they can get quite upset. I’ve had at least 1 listing agent tell me before that they didn’t want a certain client of mine ever seeing their properties again after a negative experience with the client despite a better experience with me, their agent. You would never want to risk something like that. On another occasion, a buyer I was representing showed up to a property unannounced and was found peering through the windows while simultaneously on other occasions calling the agent directly without me, which led the listing agent to use the term "stalking" when describing my buyer & I wouldn't want any of the buyers that I represent to be stigmatized with red flags like those that can substantially hurt an offer's likelihood of acceptance even if above asking price. On another occasion, a buyer I represented demanded that they make an offer in person with a seller without hesitation and without the presence of a listing agent. In a situation like that, 1 act could have cost them the house.

You could say something that could significantly hurt your bargaining power.

On one occasion, a buyer was frustrated by the seller refusing to do any walk through inspection items requested that the seller had already agreed to do in the original inspection request. On the day of closing, she called the seller directly without my knowledge, and inadvertently gave the seller the idea that she was going to close on the day that she was supposed to regardless after they gave the buyer some very minimal assurances and told the buyer about things that would not have been new information to me (warranties legally required on new construction). The threat of not closing on the day of closing was our #1 card in play where in the call she demonstrated that it was a bluff. She didn't say it outright, but they could see that they alleviated some of her biggest concerns without actually doing what they were supposed to do and going back out to the property and performing practically any of the repairs requested.

You could say something illegal & have no idea what you said was wrong because of lack of familiarity with fair housing law.

As I mention in my document on letters to the seller, “These letters are so fraught with liability that the National Association of Realtors recommends neither me sending them for a buyer, receiving one for a seller, nor reading them even if my client is convinced that they want to send one directly to the other side of a purchase if I won’t. https://www.nar.realtor/fair-housing-corner/love-letters-or-liability-letters “

Contract Terms

In the case of many contracts, there may be language that limits discussion between buyer & seller or that establishes that communication be between agents. For instance, in section 23 of the primary contract in Hampton Roads, the REIN standard purchase agreement, begins, "NOTICES: Except as provided below, all notices required to be sent to Seller under this Agreement shall be sent to Listing Firm and all notices to be sent to Buyer shall be sent to Selling Firm."

Also, many buyers & sellers never read the whole contract, & most that do, don't have photographic memories, so a buyer or seller may be unfamiliar with other contract terms, such as the Dispute Resolution procedure of section 19 of the same contract, which begins, "Prior to initiating any litigation, the parties agree any dispute or claim arising out of, or relating to, this agreement, the breach of this Agreement, or the services provided in connection with this agreement, shall be submitted to mediation."

Even if you weren’t pursued in court yourself, you could get your agent in trouble.

Your agent’s license & their career is on the line with every transaction. If your agent knowingly allows an open line of communication between buyer and seller or buyer and listing agent, their license is at stake.