I was in HomeSmart’s office in Mesa last week with a couple of clients from Canada after a day of home shopping. We were back in the conference room looking at the MLS on the huge flat screen monitor on the wall, checking out the comps to their favorite homes.

Their favorite home had five excellent and recent comparable solds. Three were priced very closely together on a cost per square foot basis. One home, however, was low priced and another was very high priced.

My clients were very curious about the very high priced home so we started looking at the differences between the homes. Nothing jumped out at me. Then it hit me and I said, “I think I got it.”

I checked and sure enough it turned out the same real estate agent represented both the buyer and the seller. I find that explains a lot of over-priced sales.

I imagine the unrepresented buyer walked into an open house, loved the home and wanted to make an offer. The seller’s agent may have even offered the buyer some money from his commission if she used him as her agent too.

The seller’s agent – who was now also the buyer’s agent – could not tell the poor buyer that the place was way over-priced because that would have betrayed his responsibility to the seller.

If that buyer had her own agent, I’m sure her agent would have been able to advise her on pricing and she could have paid $10,000’s less.

To this day, the buyer may still think she made a few thousand dollars and was very clever to use the seller’s agent to represent her. In fact, I believe she lost tens of thousands of dollars by using an agent that could not advise her on pricing.

TIP: When you see an home where you can’t explain a high sales price, check and see if the same agent represented both the buyer and the seller.

TIP: Most buyers should use their own real estate agent and not the seller’s real estate agent.