Santa Cruz Buyers' Brokerage

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I am thrilled that we are all working so hard to try and improve the level of protection and fairness for the real estate consumer. In this case, however, the problem identified in the article is not a problem at all, and the solution called for is going to severely aggravate the actual problems faced by real estate consumers. On the one hand, we say that the seller pays the commissions because it does appear this way on paper, both the listing agreement and the closing statement. On the other hand, you can argue that buyers pay the commission, because typically they are the ones bringing money to the closing. However, particularly when negotiating commissions, it's not a wild stretch to imagine that the cost of the total commission is shared between the buyer and the seller. This is a mutually beneficial arrangement when each side has its own representation. The thing that we desperately need to avoid is a system that encourages buyers to rely on the seller's agent for their representation in a transaction, which is exactly what eliminating the offer of compensation would do. More buyers would opt to avoid paying a buyer's agent at all. They would instead go to the listing agent who is in the business of pursuing the seller's best interests and who is a presumably a whole lot more experienced in the business of Real Estate than the buyer. From the standpoint of consumer protection, this is a nightmare scenario. As we know, the buyer is going to bring the money to the closing table to pay for the seller's agent, adding insult to injury. In a way, FSBO sellers who pay buyer's agents are in a similar situation, but they have chosen to work outside of the MLS system. It's our responsibility to make the system that we do have equitable for those who choose to work within it. The offer of compensation is a good system. This system encourages the tendency for buyer and seller to each be represented independently. In fact, the real problem is that the current system does not push this tendency far enough. We should couple the offer of compensation with the outlawing of sub-agency, dual agency, and transaction brokerage and encourage true fiduciary representation. This will get consumers more for their money, eliminate a great deal of agency obfuscation, and help restore the value and reputation of Realtors. The cost of agency is already factored into property values, but clients will receive a higher level of uncompromised service for that cost. It would be good for the public, and good for the industry. I don't think it's likely that large brokerage corporations are going to be doing anything but lobbying massively against a proposal like this, but at least the consumer has a choice. Sellers and buyers both can insist upon strict single-agency. The few Brokers who are willing to forgo the windfall of double-ending and commit to single-agency can offer the pubic and the industry a real and substantial opportunity for improvement. Andy Salamone Broker/Owner Santa Cruz Buyers' Brokerage http://www.santacruzbuyers.com