Dual agency 'not all black or white'
Letter to the Editor
By Inman News, Friday, July 24, 2009.Re: 'Broker: Ban dual agency' (July 22)
Dear Editor:
Let's say I have YOUR home listed and you are sitting on my shoulder listening (invisible) when I get a call from a buyer interested in seeing it. I set up an appointment to show it immediately because the buyer is sitting in a car next to the sign and wants to see it NOW.
I show the home (you're still invisible on my shoulder), and the buyer tells me on the spot to write an offer.
"Wait," I say. "I can't write your offer, go away and find someone who can," and direct him to my most incompetent competitor, or to someone I can get a referral fee from.
"Dual and designated agency have been done away with," I explain to you, my seller client. I had to turn that buyer away because I represent you.
"Great job!" you tell me?
I purposely left out the possibility this buyer would have been happy to make an offer using just my assistance for ministerial services and OK with me representing the seller. It's just too difficult a concept for many who are screaming about dual agency to understand, I guess.
When you walk into the showroom to buy a new car, do you bring your buyer's agent with you? Ask the salesman on the floor to split his commission? How about when you buy anything -- where's your buyer's agent?
Who's standing up for the seller's rights? The issue is not all black or white. Though I would shed no tears if single-agent dual agency were done away with, I think the argument that typical residential real estate sales must or should be adversarial is wrong. Comparisons of real estate with law, or stock brokerage, are far-fetched.
A well-prepared buyer will generally do well in any market for any commodity. Ill-prepared ones are likely to do less well. In my experience, most of my clients -- whether buyer or seller -- don't want a steal. They don't want win-lose. They want win-win and a fair price. How do we accommodate that?
Steve Sober
ERA Beasley Realty
Woodstock, Va.
***
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Submitted by Jeffrey Douglass on July 24, 2009 - 5:30pm.
Dear Steve, Your comments speak for itself in why dual agency is not a good idea for most consumers. However, if the consumer chooses to do it, they should truly understand what it means and go bravely ahead.
I have nothing against dual agency as long as properly disclosed at the start and the Client chooses such - and not minimized in any conversation while dual agency is not big deal.
You simply cannot serve two masters with different interests. Yes the end goal is to get the home sold, but the Seller wants the maximum sales price in most cases, and the buyer wants to pay market rate or below and have representation during his or her investigation.
Now if you have your Seller's interest in mind, you would refer a buyer to a competent Buyer's agent for their own representation - not one that is incompetent should the buyer choose their own agent. Better yet you would recommend the buyer to seek their own agent from referrals of friends and family.
I quote:
"Who's standing up for the seller's rights? The issue is not all black or white. Though I would shed no tears if single-agent dual agency were done away with, I think the argument that typical residential real estate sales must or should be adversarial is wrong. Comparisons of real estate with law, or stock brokerage, are far-fetched."
Who is standing for the seller's rights? I assume that it is the listing agent.
Does single agency make the transaction adversarial? No that is not the goal, the goal is to have both the Seller and Buyer have their own Agent looking out for their own interests.
Your comments suggest that Dual Agency gets in the way of a smooth transaction, I suppose because the Seller's agent is not going to do anything to disrupt the smooth flow towards a close of escrow, regardless of lack of attention to the Buyer's interests.
Steve, I would shed no tears if Dual Agency were to go away!
Submitted by Jay Thompson on July 24, 2009 - 9:02pm.
"and direct him to my most incompetent competitor, or to someone I can get a referral fee from."
Huh? Why wouldn't you direct him to a competent agent?
"I purposely left out the possibility this buyer would have been happy to make an offer using just my assistance for ministerial services and OK with me representing the seller."
Fine, then have the buyer sign a document stating you represent only the seller and write up the offer. How hard is that?
"Who's standing up for the seller's rights?"
Uhm, the listing agent should be, along with the seller him/her self.
"I think the argument that typical residential real estate sales must or should be adversarial is wrong."
Who's making that argument? Having both the buyer and seller represented by their own competent agents doesn't, and shouldn't, be adversarial.
Sorry Steve, I'm just not following the logic of your argument. At all.
Jay Thompson
Broker / Owner
Thompson's Realty
Blog: www.PhoenixRealEstateGuy.com
.
Submitted by Jon Astaris on July 25, 2009 - 8:25pm.
In the light of day this entire argument disappears.
The listing agreement says seller owes a commission if the broker produces a willing, ready and qualified buyer. Seller opts out after that, he owes the commission. Period. No more fiduciary duty, representing seller, buyer, third party interests, legalingo. I get you a buyer, you owe me a fee. It's that simple.
Steve Sober adduces some sober pertinent arguments reminding us that firstand last we're in the real esate SALES business, but then contradicts himself with this: "Who's standing up for the seller's rights? The issue is not all black or white. Though I would shed no tears if single-agent dual agency were done away with".
These two statements not only go directly against his good points, but make no sense at all in the context.
First: The seller pays the commission so BOTH the listing and buyer's agent owe him duties -"rights" - galore.
Second: The "invisible witness" hypothesis shows clearly the stupidity of doing away with single agent dual agency, but then he says he would shed no tears if it was banned, inexplicably shooting himself in the foot and utterly demolishing his own argument. Why, Steve, why?
Submitted by Robert A. Hulme on July 27, 2009 - 7:36am.
Anytime we have change it takes time to adjust. Jay had some great arguments. We need to follow our best instincts and represent our clients the best we can while trying hard to be fair to all involved in the transaction.
www.PaysonUtHomes.com
www.SpanishForkUtHomes.com
Submitted by Nathan Belo on July 27, 2009 - 12:13pm.
As a "real estate agent" (Not a Realtor) the problem I see is that few agents (mostly residential) understand agency, let alone "dual agency." In Washington State (Seattle), you can only be a "dual agent" if you had a prior "buyer agency" with the would-be buyer on your listing. What does that mean? It means you were showing homes/real estate to the buyer prior to showing your listing and acting as a "buyer's agent." Dual agency is improperly chosen by the agent if an unknown buyer (to the listing agent) calls via the sign or internet directly to the listing agent and then agrees to allow the listing agent to write the offer up on said listing as a dual agent.
Most agents cannot explain agency nor understand dual agency since they want to double-end the commission (both listing/selling commissions) they go with "dual agency," which is WRONG! As a listing agent you have a contract with the seller (listing agent). If you don't have a buyer's agency agreement signed with the buyer nor did you know the buyer prior to taking the listing, where's your written contract with the buyer? Dual Agency is watered-down agency and the only one represented is the real estate agent.
I've sold many listings as the seller's agent receiving both commissions explaining to them that "The best agent to sell a listing is THE LISTING AGENT. By law I owe honesty and fairness to you the buyer but my fiduciary is to the Seller. Tell me what you'd like to offer and I'll put it in writing today.!"
Submitted by Danny C. Flucke Jr. on July 28, 2009 - 10:23am.
It seems the only argument against dual agency is the "price issue". Price price price price. I am aware that price is important - But the "anti-dual-agency" clan seems to think the last $500 of negotiations is the most critical part of the transaction.
Professional agents can and do perform both duties - Ethically and morally.
If the goal for the seller and buyer is to arrive at a fair price - And have a stress-free and smooth closing - Then it doesnt matter if dual agency is in the picture.
I am in a dual agency state. But I would guess than single agency states have their own issues for "steering" prospective home buyers within their own company or to other specific agents. (I'm sure all done in the interest of having the "best" agent help them make the offer.)
In the end - You are either an ethical agent or you are not. The type of agency does not matter.
Listing aggreements commonly offer commission discounts for dual agency - Saving the sellers money.
Common sense tells us with fewer people involved in the transaction - There are obviously fewer chances for a communication break down.
To convince others of an "anti-dual-agency" agenda - You are going to need something more concrete than a simple pricing issue. And just saying it's "impossible to be ethical" doesn't make it a fact.
Dual agency is okay in my book.....
Danny C. Flucke Jr.
Senior Partner
Nationwide Mortgage Experts, LLC
Direct: (714)624-9479
DCFJ@NationwideMortgageExperts.com
www.NationwideMortgageExperts.com / www.NaMoEx.com
Submitted by Ken Lampton on July 28, 2009 - 12:09pm.
Gee whiz folks! When we get done beating dual agency to death, could we please try to settle that other pressing life-and-death question: How many angels really do fit on the head of a pin?
Be honest. Don't cheat people. Understand your state laws regarding agency. And follow them to the letter. Then go to bed with a clear conscience.
Ken Lampton, CRS
RE/MAX About Dallas
www.mstreets.com
Submitted by Bruce Hahn on July 28, 2009 - 1:34pm.
American Homeowners Grassroots Alliance
Steve-
Don’t say "I can't write your offer, go away and find someone who can," and direct him to my most incompetent competitor, or to someone I can get a referral fee from.”
Instead say "I can't represent you in this transaction because I’m already representing the seller. Not much would be gained if I did agree to represent you anyway, since I wouldn’t be able to counsel you on how to get the best price and terms in this transaction. However, if you would like to write an offer right now on this fantastic home as an unrepresented buyer, I’ll be happy to present your offer to the seller. Here’s a pen and a blank offer form. I’ll wait”
Submitted by Jon Astaris on July 28, 2009 - 8:52pm.
Bruce Hahn: Do you give the same speech in reverse to the seller?
"I can only represent you, so if a buyer calls the number on the For Sale sign in front of your house, I'll have to tell him to find himself another broker because I can't represent him AND you at the same time".
"But Bruce", says Seller, "I trust you, have the buyer call me, I'll put in a good word for you. It's fine with me, you're an honest guy, you can take care of both."
"Sorry" says Bruce, it's against my principles."
"Why then do you put your name and number on the For Sale sign in front of my house? You're advertising YOURSELF, not my house."
"Sorry" says Bruce, "I can't. I represent you only or no listing, ok?"
And I hope the seller always says "OK Bruce, I'll list the house with someone who will sell my house to anyone who wants to buy it."
As for "I wouldn’t be able to counsel you on how to get the best price and terms in this transaction" - why would you not counsel ANY buyer to offer full price? You listed the property correctly, what's to counsel?
Offering a blank form and pen - that's so rude, no one would or should list with you if they knew how you'd act.