'We cannot serve two masters'
Letter to the Editor
By Inman News, Tuesday, July 28, 2009.Re: 'Romancing the "hogger" ' (July 20)
Dear Editor:
In Maryland, "dual agency" alludes to both the buyer and the seller working on a property listed by a broker for which both the listing and selling agents work.
The dual agent is the broker, not the salesperson. In our company we urge our agents NOT to discuss their clients with each other or during sales meetings so that they can protect the fiduciary relationship they have with their respective clients.
However, in the State of Virginia and in Washington, D.C., one agent can be a "designated representative," which allows that agent to represent BOTH sides of the transaction. I agree with those who feel it is impossible to represent both equally effectively.
As the broker I strongly suggest to my agents working in these two jurisdictions that they urge a buyer or seller who agrees to a "designated representative" to get their own agent. We cannot serve two masters. All brokers should encourage their agents to be happy with one side done well and not be wooed into trying to do both sides for the money.
The client always comes first.
Maureen D'Aiutolo
Key Realty Group LLC
Gaithersburg, Md.
***
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Submitted by Robert A. Hulme on July 30, 2009 - 8:17am.
Right On!! Buyers do need their own agent. So many unsuspecting buyers are sucked into the Seller agent's web. There has to be a better way to regulate or inform the public as to their options when buying a home.
www.summitcountyrealestate.us
www.wasatchcountyrealestate.ws
Submitted by Barry Noble on July 30, 2009 - 9:45am.
Maureen: Your last statement says it all: "The Client Comes First."
A dual agent cannot promise that, to both Buyer and Seller, so my advice to agents: work your tail off for one or the other, and you'll earn a good living making an even better reputation resulting in lots of referrals. Lots of referrals means you'll have more work than you can handle so take on a team partner = SUCCESS !
Dual Agency should be a thing of the past.
Barry Noble
CA Licensed Broker and
Certified Residential Appraiser
www.MyPropertyIsWorth.com
Submitted by Evan T on July 30, 2009 - 10:20pm.
I understand that in real estate business there is a need to protect the fiduciary relationship with the clients. It’s rally hard to perform the two responsibilities. There might be a conflict of interest if they going to do that at the same time. Tough economic times taught us to choose where to secure for our financial assistance. We try to assess where we could get an easy and quick access of loan. Same day cash loan is good for financial emergency need. No need to revolve around banks and financial institutions for getting cash. Just apply for same day cash loans and avail cash in few hours. Same day cash loans to help you float the expenses you have until payday, and sometimes it helps to get it in a hurry, especially if you want to avoid getting gouged by your ever-so cooperative bank, that keeps saying they like to work with you but keeps nailing you if you go even a dollar into overdraft. A same day cash loan to tide you over until payday doesn't sound like a bad idea in emergencies. Lenders of same day cash loans are online, so you can get online payday loans if you need them.
Submitted by Danny C. Flucke Jr. on July 31, 2009 - 12:42pm.
Good grief - The ultimate in spamming. Turning a discussion of agency into a plug for your payday loan company...
Back to topic: My opinion is that it is more about the agent's ethics - Than the agency type.
Single agency states have issues with "steering" homebuyers to other company or unofficially affiliated buyers agents to submit their offer.
Ethical agents can and do perform their duties required - In both single and dual agency.
Most professional agents agree that the last $500 of negotiation is not the most critical piece of the transaction. The "PRICE-PRICE-PRICE" issue seems to be the most common stance against dual agency.
Dual agency does allow for many more client benefits:
1) Most dual agency listing contracts have commission discounts. We have seen discounts as high as 2%. A $20,000 commission discount can be a substancial savings to the homeseller which ultimately may positively impact the homebuyer as well.
2) Common sense states with fewer people involved in the transaction - There are fewer chances for miscommunications causing delays and even cancellations.
If the goal of the homeseller and homebuyer are a fair price and a smooth, stress free closing - The agency type has zero impact.
Thanx, Danny
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 Kevin Crosthwaite on August 2, 2009 - 5:39am.
Colorado and Florida are the only two Transaction states. I think as Realtors we face many problems when it comes to representation.
1. The consumer doesn't understand Agency Law nor see the value in proper representation.
2. Many Agents don't understand Agency, Designated Dual Agency, Buyer Agency and the line between fiduciary and fair and honest.
3. Ironically once the property has been selected the first thing the customer or client does is seek representation...a lawyer.
4. The buyer brings the bag of money to the closing table. The seller brings the keys, clear title and a deposit slip.
5. Installing a "Chinese Wall" in offices to preserve confidentiality is one step towards a more effective designated dual agency.
If NAR would help educate the consumer about how representation works the importance of using a Realtor would increase exponentially and our image would improve as well.
Have a good day!
Kevin
Kevin Crosthwaite
kevin.crosthwaite@elliman.com
www.prudentialelliman.com
516-627-2800
Submitted by John F Sullivan on August 2, 2009 - 9:55am.
I agree with Kevin Crosswaite on his first two points which are directly related to the lack of training of licensees and enforcement by the state real estate commissions as well as the lack of adequate disclosure to the buyers and sellers in the morass of state agency disclosures laws.
Some states allow and require disclosure of a “dual agency” relationship – where the licensee or brokerage purports to represent both sides in the transaction. Based on the common law of agency, dual agency representation really means NO representation for either party. Since a client relationship requires both total disclosure and total confidentiality, how can either side be truly considered a client? Again, the real estate licensee is served because he or she can capture both sides of the compensation. But the consumer is left without representation.
The bigger problems, on a national basis, are these:
• There is little consistency from state to state on how consumers should be treated, though the accepted standard is disclosing whom the real estate licensee represents in most states.
• The timing of such disclosures varies widely by state in a patchwork of requirements by law or regulation, and often occurs much too late to be of any benefit to consumers.
• There are whole categories of agency in some states that don’t exist in others.
• There are categories of agency that are called by the same name, but mean different things from state to state.
• There are clear definitions of agency in some states, but rules as to the “when” and “how” disclosure is made to consumers is missing or unclear rendering disclosure useless since the consumer will have already disclosed confidential information to the licensee before the consumer is informed of whom the licensee represents.
• Compliance by real estate licensees with disclosure laws is abysmal.
• In many states that have disclosure requirements, enforcement is almost non-existent
The National Association of Exclusive Buyer Agents believes that it would serve the American consumer to have a standardized written disclosure statement that is used in all states. Such a disclosure would ideally:
• clarify the various types of agency representation available to consumers on both sides of a real estate purchase transaction
• provide consistent definitions of agency throughout the country
• designate the time and method of disclosure to clients and/or customers
• obtain the consumer’s written confirmation that they have received and understand the information
• require re-disclosure if the relationship should change
John F. Sullivan, CEBA, ABR
President, National Association of Exclusive Buyer Agents
Associate Broker
Buyer’s Agent Co., Inc.
www.dcareabuyeragent.com
Submitted by Truett Neathery on August 3, 2009 - 6:32am.
Truett D. Neathery
Real Estate Appraiser
Machinery and Equipment Appraiser
1216 A High Street
Auburn, CA 95603
530 885 4475
In California, at least, the RE commissioner says the Buyer is the customer, the seller is the client, the entity owed utmost fiduciary responsibility. Calling the seller and the buyer both "Clients" does not make it so. When an agent tells a seller "I'm getting you the best price" and the buyer "I'm getting you the best price", there's some misleading going on here. The fact is, agents do not determine value. The market determines. In fact, there is a large percentage of sales happening where no agent is involved at all, the buyer and seller have reached a meeting of the minds independently without any external input or a need for external input. Let's hope they got an appraisal and had a good escrow agent to cover the bases.
Submitted by Ruthmarie Hicks on August 10, 2009 - 7:31am.
One of the biggest issues I see these days is that buyers see this as an "easy way" to save some money. One of the reasons the practice persists is consumer demand.
Dreams of saving a fat 3% are just that - dreams. In many parts of the country, commissions are lower than buyers think. Also, sellers want to "share" in the savings if they agree to dual agency. Agents can't slash the commission in half because the work load and liability are substantially greater when working both sides. In the end, they are looking at a few hundred in savings. Hardly worth the lack of representation.
I see a LOT of buyers these days wandering from listing agent to listing agent in an effert to secure substantial "savings." Make no mistake, buyer behavior is as much to blame as the greedy listing agent in this scenario. As long as dual agency persists as an option, the "myth" of big savings will linger along with it.
Submitted by Danny C. Flucke Jr. on August 10, 2009 - 5:52pm.
Ruthmarie: We have witnessed the savings passed on to buyers/sellers in 100's of dual agency transactions. How is it a "myth"...?
(And 3% of a $1,000,000 listing is $30,000 - Not a few hundred dollars.)
If you see "LOT of buyers these days wandering from listing agent to listing agent in an effert to secure substantial savings." - Maybe your market is trying to tell you something.
And maybe the message is "Make 3.5% instead of ZERO..."
Thanx, Danny
Danny C. Flucke Jr.
Senior Partner
Nationwide Mortgage Experts, LLC
Direct: (714)624-9479
DCFJ@NationwideMortgageExperts.com
www.NationwideMortgageExperts.com / www.NaMoEx.com