Fairness in dual agency
Letter to the Editor
By Inman News, Monday, March 1, 2010.Re: 'Dual-agency disclosure makes no sense' (Feb. 22)
Dear Editor:
(In some cases) the buyers want the (listing agent) to show them property first of all or they would have chosen someone else. They may have called the agent from a sign with the agent's name and number, or from the buyer Googling the name of the town they want to buy in and this agent's name has popped up.
Most of the time the buyer has researched ahead of time and brings the printouts to the office for the agent to show only those properties that the buyer has chosen, and sure enough several may be the company's own listings or the agent's own listings.
Most of the time if you explain that you will treat both parties fairly, neither party has a problem with dual agency. I think that in those instances in which it has caused problems makes it a big deal for everyone.
I treat my clients and customers the same. I have a product to sell and (am seeking that person) who wants to buy it.
Vickie Giles-Griffin
Sales associate
RE/MAX
Albany, Ga.
***
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Submitted by Peter C. Fyler on March 1, 2010 - 3:16pm.
Hi Vicki,
Life used to be so simple when real estate was bought and sold with a handshake and "your word" was your bond, but it is just not that kind of world today.
I guess what you are saying is everyone you work with gets an "OLDCAR", or you are a faciliator. You assist the seller and buyer in reaching an agreement but you do not represent either the seller or buyer in the transaction. You do owe the seller and buyer a duty to present each property honestly and accurately by disclosing known material defects about the property and you owe the duty to account for funds. However, unless otherwise agreed, you have no duty to keep information received from a seller or buyer confidential. Right? And I am sure you 'disclose' your agency relationship to both parties?
My hat's off to you if you can serve (or not serve) two masters and make everyone happy. I do hope your broker's E&O policy is up to date.
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 Nick Chucales on March 1, 2010 - 3:30pm.
Peter,
You are wasting your time, it is agents like this that have given the real estate "profession" a bad name. If you cannot look past your commission and act in your clients best interest then you will always be considered an agent and not a professional.
Nick Chucales
NMC Consultants
Submitted by Jillayne Schlicke on March 1, 2010 - 3:48pm.
"I treat my clients and customers the same."
Wow. Really...really?
What if one customer wants to be treated better than another other customer? Is the answer, "sorry, I treat everyone the same?"
"I have a product to sell and (am seeking that person) who wants to buy it."
This statement alone shows a very clear disconnect between how agents want consumers to see them, and how agents see themselves.
If the only liability you want is a salesperson's liabilty, then the general public will see agents merely as salespeople and your value is classified as the same value consumers would place on a retail salesperson.
If agents want the respect of being classified as a profession, then it might be beyond time to leave the salesperson mentality behind and along with that, dual agency.
Submitted by Danilo Bogdanovic on March 1, 2010 - 5:46pm.
"I treat my clients and customers the same."
Are you kidding me? The law clearly states the differences in the way you must treat clients and customers - there is a distinct and legal difference.
"I have a product to sell and (am seeking that person) who wants to buy it."
No, you have a fiduciary responsibility to represent your client. The byproduct of that is selling their home. I don't see where it says, "Forget about and/or break your fiduciary responsibility to the seller in order to get a buyer to buy their home."
And selling their home means getting the best price and terms possible. If you are in Dual Agency, you are merely a paper-pusher and can not advise either party on price, how to counter, etc. This means that both the buyer and the seller forgo representation, a not-so-bright decision for either side if they want the best price and terms for their particular situation.
There is a reason why many states have banned Dual Agency. For the sake of everyone, other state should do the same.
Danilo Bogdanovic
Real Estate Consultant, Realtor
http://www.LoudounScene.com
http://www.LoudounForeclosures.com
Submitted by Paul Howard on March 1, 2010 - 6:11pm.
She says: "Most of the time if you explain that you will treat both parties fairly, neither party has a problem with dual agency" I guess if you can get them to let their guard down they will think dual agency is ok. That doesn't mean it is ok. I like this quote:
"Fairness is not representation.
Fairness means I'm not going to cheat you;
representation means I'm going to take care of you."
~James Warkentin
I think the OLDCAR reference went right over her head. I agree with Peter. Keep your E&O up to date.
Paul Howard, Broker
NJHomeBuyer.com Realty
Cherry Hill NJ 08002
Submitted by Larry Douglas McGee on March 1, 2010 - 7:19pm.
Larry D. McGee, CRB,CRS
theberkshiregroup.com
The Berkshire Group, Realtors
I read with some interest a post to Inman News regarding Dual-Agency and the interesting comments attached to the article, which of course led to the letter to the editor shown above. It simply amazes me that many of this nations real estate brokers are still embroiled in the often times acrimonious discussion of this out of date concept.
Of course, the underlying issue is simple, and relates to money and control. The argument goes that if a broker represents the seller of real property and brings that property to the market, the broker wants to maximize the potential income and exercise the most control possible over the outcome of the process. If somehow the broker can provide assistance to both the buyer and seller in the transaction, the income is generally greater, and the necessity of working with another broker is eliminated. Of course, the question is, just how can this be done?
The discussion stems from a 1983 FTC study that determined that most consumers thought the broker showing them homes was working for them, when in fact, the broker was, in most cases, working for the seller's (listing) agent using a practice called "sub-agency". With sub-agency, the listing broker was in control of both money and process, offering to compensate a sub-agent if that sub-agent brought a buyer to the closing table. The buyer was a customer. If the listing agent brought the buyer to the closing table, so much the better. In that case, the buyer was still a customer. There was little notice or disclosure to the consumer regarding representation or property condition.
As the real estate industry moved into the concepts of representation and disclosure in the early 1990's, the question of how to maximize income and retain control remained, and thus was born the concept of Dual-Agency, the idea that a single human person can represent the best interests of both the buyer and seller of a unit of real property. This philosophical legerdemain is somehow accomplished by fully disclosing to both parties that the broker is a "Dual-Agent", and with disclosure, the question of trust and confidence is somehow set to rest. Evidence is mounting that the consuming public is no longer willing to accept the concept of Dual-Agency, and since the consumers are writing the checks, the real estate industry might wish to find a better business model.
The answers,or choices, are simple if difficult for the industry to digest:
Choice 1: The broker is an agent for the buyer or seller, never both. This of course affects the income of the broker, and control of the outcome has to be shared, many times with brokers operating at different levels of competence. But the competency question is really one for the consumer, and consumers are free to decide to choose a more or less competent broker based on their understanding of the process of buying or selling real estate.
Choice 2: The broker is a facilitator for the transaction, not representing either party. With today's vast amount of readily available information, this concept has certain benefits for all parties, but may affect the amount chargeable to the consumers for the service provided. The question of trust is left unanswered with this approach, sometimes called "transaction brokerage", and the fact is, most consumers want some advocacy or counsel regarding the purchase of their home or investment.
Choice 3: The seller's (listing) agent represents the best interests of their selling client, and any prospective buyers choosing to buy without representation or the use of a facilitator are customers. Again, with the vast amounts of information available to the public, some well informed consumers may be able to function well as buyers, without any help at all. Like it or not, many sellers act in their own behalf (FSBO's) and many times buyers choose to buy without involving a professional broker.
Dual-Agency should be relegated to the dust bin of history, and the real estate industry should move forward in adopting or developing new business models that better serve the consuming public. If not, the debate may become moot, as the public may decide they simply do not need the services of a professional broker to buy and sell real property.
Submitted by Bruce Hahn on March 2, 2010 - 8:05pm.
American Homeowners Grassroots Alliance
It is encouraging that more real estate brokers and agents are coming to realize that dual agency is neither in their clients' interest nor in the professions' long term interest. Let's hope that the realization is contagious and eventually bubbles up to the their peers who decide the public policy positions of national, state, and local real estate trade associations. When that happens we will be able to look to a better future where agents and brokers get the respect that most of them deserve, and consumers won't face the threat of the dual agency albatross!
Bruce Hahn
American Homeowners Grassroots Alliance
Submitted by Jeffrey Chute on March 3, 2010 - 5:03am.
Jeff Chute
Real Estate Instructor
J. D. Chute & Associates, Inc
32 Allerton St.
Plymouth, MA 02360
Submitted by Jeffrey Chute on March 3, 2010 - 5:08am.
Jeff Chute
Real Estate Instructor
J. D. Chute & Associates, Inc
32 Allerton St.
Plymouth, MA 02360
Regarding the discussion on Dual Agency as it relates to brokerage commissions...acknowledging and consenting to the limited role for the agent in dual agency may eventually involve a discussion with the client about limiting brokerage fees as well. Lets see where the trend goes on THAT!