Buyers, sellers need equal representation
Letter to the Editor
By Inman News, Friday, January 29, 2010.Re: 'Who wins with dual agency?' (Jan. 22)
Dear Editor:
Who wins with dual agency? The dual agent or agency.
Having practiced single agency since 1973 and exclusive buyer agency since 1986, I am pleasantly heartened by the fact that some of the rank and file in the real estate community are finally starting to get it. Both the seller and the buyer need equal representation.
Now that the market has changed, what fascinates me is how many "buyer agents" are popping up, most of whom are still "dual agents."
Page 6 of the U.S. Housing and Urban Development Department's "Shopping for Your Home Loan" booklet on settlement costs says it all: "It is your responsibility to search for an agent who will represent your interests in the real estate transaction. If you want someone to represent only your interests, consider hiring an 'exclusive buyer's agent,' who will be working for you."
Dual agency benefits only the dual agent or agency. Neither the seller nor the buyer get equal representation!
John Rygiol
Buyer's broker
Exclusive Buyers Agents of America
Seal Beach, Calif.
***
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Submitted by Peter C. Fyler on January 29, 2010 - 6:30am.
Hi John,
As you know, and I do not mean to sound like I am preaching to the quire, I work in a very competitive island resort market with over 80 offices and hundreds of real estate agents vying for a finite amount of business. Out of those 80 plus offices there are only 2 agencies that are exclusively representing buyers and are members of the National Association of Exclusive Buyer Agents (NAEBA), the organization you have so valiantly championed for many years.
But every Tom, Dick and Sally presents themselves as being an exclusive buyer agent. I have worked tirelessly to educate the public about the various types of Agency and the pitfalls of dual agency. As you know, there is a good chance the “exclusive” agent a buyer hires will want the right to transition to dual agency. Once an agent assumes the role of dual agent, there goes the advantage of a buyer’s advocate, and what the buyer is left with I believe is essentially a facilitator who can neither counsel the buyer nor the seller.
The only way for us to bring clarity to this confusion is if NAR agrees to remove the “Exclusive” from their vernacular and replace it with “Accredited” or keep it simple --- Buyer Agent. Right now they support their stance with a semantic argument similar to the infamous definition of “It Is”. The difference between an ABR in a traditional agency and an EBA in a single agency is EBA’s exclusively represent buyers and traditional agents are exclusive buyer agents. Talk about splitting hairs. I think we are making headway as more people who seek me out are saying they “get it”.
Peter C. Fyler, CRS, REALTOR®
SplitRock Real Estate, LLC
Exclusively Representing Buyers
Martha's Vineyard, Massachusetts
BuyersOnly@SplitRockRE.com
http://www.SplitRockRE.com
Submitted by richard brockman on January 31, 2010 - 11:41am.
dickb/wi
I find it hard to disagree with much of what has already been said. I some times see abuyers agent take an adversarial position for their client, when they [at least in wisconsin] should take and advisory position. Most adversarial positions lead to a "I Win You Lose" result, That is what Lawyers do. In Wisconsin we have to be "Fair and Honest" to all parties in a transaction and we have to "keep confidential any thing that our customer or client wants kept confidential or anything we reasonably think they may want kept confidential". Even as a sellers agent working with a customer who tells us they will come up in their offering if the seller will not accept what is offered, we must keep that fact confidential.
But i agree each party to a transaction will be better served if they have representation from an agent and even an attorney. There are things that a Buyers Agent can do for a Buyer that they can't do if they are a Dual Agent or a Sellers Agent, bi would ask that they stay away from the Adversarial Position and leave that up to the attorneys.
Submitted by Brad Bergamini on February 2, 2010 - 6:39pm.
In a rural area or smaller population like Prescott Arizona. Our Broker may have over 2/3 of the listings. If I the agent Represent only the buyer, the buyer would then have to be prepared to find another Broker to represent them on properties listed by our Broker. Dual agency is a must here an works. Buyers if disclosed can make a smart decision and benefit from this type of arrangement...One of which is variable commissions, in which the seller isn't burden with a full commission at close of escrow when both buyer and seller are represented by one broker. This may make it possible for the buyer to get a better "deal" on the property. Other benifits inclued agents familiarity with the property.
Buyer's should have a right to representation by an agent of their own choosing that isn't to say that a buyer can't have a great experience with a Dual agent.
As for the "Shopping for Your Home Loan" booklet. I believe this was created to help buyer's understand the process. The only problem is that this process varies from State to State. I think you will see some major revisions of this booklet in the future.
Great post.
Brad Bergamini
The Bergamini Group
Realty Executive Northern Arizona
http://bradbergamini.com
http://EverythingPrescott.com
Submitted by mnwags on February 3, 2010 - 7:00pm.
I've never liked the dual agency argument. I don't see ethically how one agent can represent both a buyer and seller trying to get the best for each. We all know that the agent who is doing this is thinking about there paycheck first and the buyers and sellers second. However, I do believe that we should allow dual agency within the firm and if you have a buyer for your listing you will need to work with another agent to write the offer for the buyer. Seems like a simple fix to me, unless your a 1 agent office.
nw
Submitted by Paul Howard on February 6, 2010 - 5:41am.
NW, except that in all or virtually all states it is the COMPANY that is the agent of the consumer. All that firm's agents are agents of the COMPANY not the firms principal. Therefore, using separate agents in a firm does not avoid dual agency. Even in designated agency states the broker (who is the required supervisor of all the agents) is a dual agent. The ONLY way to avoid the potential for dual agency is for the COMPANY to always represent either buyers or sellers. This is the case, for example, with companies that are members of the http://www.naeba.org (National Association of Exclusive Buyer Agents). Those agents are restricted by their company's policies and the code of ethic of the organization to only representing buyers.
Paul Howard, Broker
http://www.NJHomeBuyer.com Realty
Cherry Hill NJ 08002
Submitted by mnwags on February 6, 2010 - 12:19pm.
Paul: I understand how it works. That is why I through this out there. I don't feel like a company should have to set up two entities and then have separate agents working for each entity. Maybe my point wasn't clear. I am just stating that a COMPANY should be allowed to represent both sides. However, the same agent in this COMPANY should not represent both sides.
Submitted by Mark Bloomfield on February 12, 2010 - 7:35am.
All of the above issues could be resolved if the buyer and seller were more directly involved in the offer and negotiation process instead of relying “exclusively" on agents to handle the entire negotiations at “arms length”. No one will argue that buyers and sellers “clients” often withhold, misrepresent and at times flat out lie about important and often critical information, positions or attitudes essential to getting an agreement. Anyone ask WHY they do this?? Because THEY DON’T TRUST THE PROCESS and they want to protect themselves. You would do the same. We all do. When there is NO trust in the process, then it doesn’t matter who you hire. This problem has been going on for a very long time, hence even the need for “exclusive” representation. This still does not work if the client believes the process is flawed regardless of representation. The process must change, not the representation.
Consumers are increasingly frustrated with the current practices and this frustration results in fewer offers, poor offers, difficult negotiations, and borderline practices. Just look around, anyone want to disagree with this? The industry will need to respond to these consumer demands and evolve the offer and negotiation process from an offline, labor intensive, overly legal, heavily constrained, closed and at times, incestuous environment to one that is online, user-friendly, open, consumer driven and 21st century. Dare I say transparent?
What worked for the last 100 years is no longer working. Those who recognize this will not only be the survivors in this industry but the clear winners.
Mark Bloomfield
CEO
N-Play.com
Submitted by Frank Dolski on February 26, 2010 - 4:46am.
Hi John,
You have written a nice article but I do have to disagree with your comment on Dual Agency. I am an Associate Broker in Pennsylvania where dual agency is legal and used quite frequently. In my personal experience, I have been a dual agent 5 times in my career. So while not the norm, all of my transactions went well. My sellers and buyers who both had to agree and both benefited by my representation. The fact is that you represent each group’s interest with utmost honest, integrity and privacy. In all of the cases, it was a "win-win" for both parties with no issues. I am not saying that there are not higher risks when being a dual agent but if you are practicing with utmost regard for each party with their fiduciary interest in hand, I do not see an issue with dual agency.
Frank Dolski MBA, ABR, e-PRO
Associate Broker
Coldwell Banker Hearthside realtors
Lahaska, PA
Submitted by Ileri Ogunfiditimi, REALTOR® on February 26, 2010 - 1:09pm.
The dual agency debate is one that will continue to exist as long as every agent has his/her own comfort level and method of doing business. There's no "one right way" to work with clients. Ultimately, the "right" way is the way that suits the agent-client relationship (so long as it's legal of course) and the deal opportunity. For example, dual agency is still practiced by many commercial brokers. Especially, since they're into the practice of building a client database or "book of business." And there are many dual agency deal opportunities that are consummated due to pre-existing relationships the agent (commercial broker) has with the principals involved in the transaction.
Ileri Ogunfiditimi, REALTOR®
Ileri Ogunfiditimi, LLC/Jobin Realty
7825 Tuckerman Lane, Suite 201
Potomac, MD 20854
Direct Dial (240)403-3400, Ext 742
Direct Fax (866)283-7840
Email: ileri@ileriogunfiditimi.com
www.ileriogunfiditimi.com
www.jobinrealty.com
Submitted by Tracy Saunders on February 27, 2010 - 2:06pm.
I have never seen a lawyer represent both sides and as a newer agent with 3 years experience I do not know how you can represent both sides of the real estate transaction. I deal with REO properties and have seen more unscrupulous agents than I care to admit who double end most of their deals because they make it so difficult for anyone other than themselves to get access to the property. I do not do this with the REO's I represent I will refer out a buyer and explain why.
Tracy Saunders
Chase International
CA/NV Realtor
CA DRE # 01809685
Incline Village, NV 89451
775-772-1630
Submitted by Jack Cramer on March 3, 2010 - 1:44pm.
This is very true. I have seen the same problem with many people looking for a home. What are your opinions of internet buyers agents for real estate? For example on http://buyersagent.net would they represent your interests if you were buying a home?
Submitted by Jack Cramer on March 3, 2010 - 1:47pm.
Sorry, I think i messed up that last post. I meant to put http://www.buyersagent.net. Please forgive.
Submitted by Barry Noble on March 4, 2010 - 12:05pm.
Dual Agency is perpetuated by greedy brokers and agents and it is a great disservice to both buyers and sellers. As earlier pointed out, not even good lawyers represent both parties. (emphasis on the word "good").
Every Broker and Agent who believes in "Ethical Responsibility" and doesn't just play lip-service to "ethics 101", should just refuse dual agency and concentrate on honest full representation to their clients and honest dealing with the other side in the transaction.
New business is earned from referrals and honest hard work. After the greed, often comes the fall.
Barry Noble
State Of California
Certified residential Appraiser
And Broker/Realtor.
http://www.MyPropertyIsWorth.com
760-992-9523
Palm Springs CA