dual agency Archives - The Phoenix Real Estate Guy

I know I can get a better deal working with the listing agent!

February 21, 2012 By Jay Thompson

RING RING goes the cell phone.

(Well, actually the phone ringtone is “The Eyes of Texas”, but it feels silly to type, “‘The eyes of Texas are upon you‘ goes the cell phone”…)

“Hi, I’m calling about your listing at blah blah blah.”

“Well, that’s not our listing, but let me look it up real quick for you.”

“It’s your listing, it’s on your web site…”

“Our site has all the homes listed for sale in Phoenix, hang on just a second…” (We’ve been there, done this before.)

“While you are looking it up, can you tell me what “Owner Agent” means in the listing?”

“Sure, that means the seller is a licensed real estate agent. In Arizona that is required to be disclosed up front. OK, I have the listing information up now, how can I help you?”

“I just want to talk to the listing agent, I have a couple of questions.”

“I understand, there is a lot of info here, I can probably help you…”

“Look, let’s just cut to the chase. I am a cash buyer. You and I both know I can get a better deal working with directly with the listing agent. Can you give me their name and number?”

I make an attempt to tell the caller that the listing agent works for the seller (or themselves in this case) and has their seller / self’s best interest at heart, not you the buyer. But it’s swiftly apparent the caller won’t listen and only wants the listing agents contact info.

Now I could be all douchey and tell the guy to find it on his own. But he seems nice, albeit misguided. We chit-chat a little more while I’m looking through the listing info in the Multiple Listing Service (MLS). I tell him, “Look, I’m seeing some things here that I seriously doubt the listing agent will tell you…”

“Listen, I know you just want to sell me the house. And I’ll call you if I can’t reach the listing agent…”

[No you won’t, I think to myself.]

“So can you give me their number or not?”

“Sure, here it is. Good luck!”

What Did I See?

This particular home was listed for around $280K. The caller knew that. What the caller didn’t know was that the home was previously purchased in November 2011 for about $185K, by an LLC that is in the business of buying foreclosures, fixing / remodeling them, and “flipping” them — reselling them quickly for a profit.

Nothing wrong with flipping for fun and profit.

But do you think the agent / owner is going to tell this buyer that he bought the home three months ago, put $30 – $40K into it and is now trying to get $55 – $65,000 in profit?

My guess is no.

Will the lister / seller “waive” the buyer’s agent commission of $7,000?

Probably. They will at least reduce it, and pocket what’s left.

Is the buyer “getting a better deal” working directly with the listing agent?

Maybe, maybe not.

Personally, and professionally, I think that armed with the following information — that the buyer will never get — they could quite likely save more than the $7K in buyer agent commissions:

The home is overpriced by at least $10K.
The home is “over upgraded”. It has been upgraded above and beyond what is typical for this neighborhood. It looks nice from the photos, but over upgraded homes can be difficult to resell, and they rarely will garner what the upgrades cost.
There is a $55,000 – $65,000 profit margin built into this home.
Some of the neighborhoods surrounding this property are pretty hot right now. An unseasoned buyer (and through the brief conversation I had with this buyer, it was readily apparent they are not very experienced) could easily be lead down the wrong path by a less than scrupulous agent/owner. I’m not saying this particular agent/owner would take advantage of an unseasoned buyer, but I assure you some would. In other words, there is a distinct possibility the agent/owner could produce data showing the buyer there is a hot sellers market and use that misinformation to lead the buyer to believe they don’t have a lot of negotiation room.

But, the buyer wanted nothing to do with having their own representation. They are convinced that they can get a commission reduction and a “great deal” working directly with the listing agent. What they don’t even know is they are working with a relatively high volume flipper who is out for one thing — to maximize their profit.

The buyer may well “save” $7K in commissions, and think they’ve gotten a great deal.

Hopefully for their own piece of mind they’ll never come to the realization that by using a good buyers agent, one who represents THEM and their interests, they may very well have saved ten or twenty thousand dollars. Or more.

Think about it folks. Why would an investor disclose details (that they aren’t required to disclose) in order to get you the lowest possible price on a property that they are trying to maximize their profit on?

Find a good buyers agent. They will work for you, not against you. Don’t plunk down $280,000 and let yourself be represented by the other side. This owner/agent makes their living selling homes for profit. You don’t. Why would you voluntarily go into battle with such a disadvantage right out of the gate?

Photo Credit: Louis Docker, aussiegall on Flickr. CC Licensed.

Edina Realty pulling listings from Trulia and Realtor.com?

November 17, 2011 By Jay Thompson

Craig Kamman, an agent with Edina Realty in Wayzata, MN reported Tuesday on his blog that Edina Realty is going to stop sending their real estate listings to 3rd party sites like Trulia and Realtor.com.

From what I am assuming is an internal message to Edina agents (as it’s nowhere to be found in Edina’s on-line press room or anywhere else online that I can find) that Craig posted comes this:

Edina Realty will no longer provide a broker feed of our listing inventory to Trulia.com starting Nov. 30, 2011. We also intend to discontinue sending our listings to Realtor.com by the end of the year.

Interesting. Why would a very large real estate brokerage pull their listings from two of the most heavily trafficked real estate sites on the planet? (According to Hitwise, Realtor.com and Trulia are currently the first and third most visited real estate web sites.)

Here’s what Edina had to say about it:

Third party aggregators are not brokers. They get listings for free from brokers around the country and then display them online, collecting and distributing leads for profit. We believe it makes the best business sense for our agents and Edina Realty to control our own listings in order to ensure that:

Our agents don’t lose future business opportunities because a non-listing competitor pays to present themselves as the contact for your listing.

Our agents don’t have to pay ”“ directly or indirectly ”“ for leads on their own listings.

Our sellers can be assured that leads on their listing are being handled by an expert

The quality and accuracy of your listing data is assured.

Potential buyers are provided with fast, knowledgeable responses via the listing agent or our seven-day-a-week customer service department.

Of course where Edina, or any real estate brokerage, chooses to distribute their listings is up to them. The brokerage owns the listing (though I think I could make a case that the home seller should own the listing for their own home, but contractually speaking the owner of the data is the listing brokerage).

Craig thinks Edina Realty should be “applauded for their leadership”. Other agents and brokers have chimed in across the interwebs in agreement with Craig.

The common mantra I hear from many agents and brokers regarding sending listings to third party sites typically falls into all or part of four camps:

1) Third party sites end up selling leads back to the agent/brokerage that provides them listings.
2) Third party sites compete with agent and brokerage sites in search engine results.
3) Third party sites that don’t get a feed from the MLS serve up inaccurate data.
4) It’s our data, we should control it.

I Don’t Get It

At Thompson’s Realty, we syndicate our listings to multiple third party real estate sites (including Realtor.com and Trulia). Why? Simply put, for exposure. Home buyers are looking for homes on the Internet. Of course I’d rather them search for homes right on the site you are looking at now, but the simple fact is these large national sites are out there, and they draw a LOT of home buyer eyeballs. It only seems appropriate to put our clients home sale information on the highest traffic real estate sites. Not to do so would be a disservice, in my opinion.

I’ve never understood the, “They sell leads back to us using the data we supplied!” argument. No third party site can sell you a lead if you don’t open your checkbook or whip out the credit card. Don’t like third party sites selling you leads? Don’t buy them. How hard is that?

Don’t like third party sites competing with you in the search engines? Build an authoritative site and compete with them. We rank above Realtor.com and Trulia and other third party sites for countless keywords, address and MLS number searches. Those who say the little guy can’t compete with these deep-pocket listing aggregators are wrong, plain and simple.

Yes, there are inaccuracies in some of the third party listings. Guess what? There are inaccuracies galore in the MLS. That’s been proven over and over again. If you find these sites aren’t displaying your data accurately, tell them to fix it. Every third party site I’m aware of (or at least care about) has a process to correct bad data (most of which is entered incorrectly to start with by the listing agent or broker).

What seems to give the most angst to the folks who oppose these sites having “our” data is that some other agent who pays money will get a lead from their listing.

So what?

We don’t take listings to generate leads, we take listings to sell them.

And if putting a client’s home on Trulia or Realtor.com or Homes.com or Zillow or where ever gets that listing in front of a home buyer and they contact some ad paying agent to help them buy it, GOOD. That’s the freaking point! I *want* buyers to contact an agent about buying our client’s home.

Edina made the point, “Our sellers can be assured that leads on their listing are being handled by an expert.” Good for them. I know a few agents that work at Edina and they are fantastic agents. Are there crappy agents out there, getting leads from third party sites? You betcha. And if a crappy agent brings a buyer for one of our client’s home, we’ll deal with it. Trust me, many a good agent, be they at Thompson’s Realty or otherwise, has had to hold the hand of a lousy agent and do their job for them in order to get the transaction closed. Welcome to real estate. My guess is that a home seller–if they get the price they need in the time they need it–couldn’t care less about the ability of the buyer’s agent or what their agent had to jump through to close the transaction.

And they shouldn’t care. It’s our job as their representative to worry about that.

There’s murmuring out there that other brokerages will follow Edina’s lead. That we need to wrest control of listing data from these third party sites. Sorry kids, but the control left the building a long time ago. Real estate buyers want access to listing data, and it’s our job to get that data to them.

Will other brokerages pull their listing data from third party sites? Maybe. I can assure you that if a Phoenix area brokerage chooses to do that, then we will use their decision to our advantage. How does the conversation go with a potential seller if you are with a brokerage that chooses not to use third party listing sites?

So Mr. Agent, you’ll put our home listing on the internet, won’t you?

Well, it will be on our brokerage site, but we’ve elected not to put your listing on some of the most highly visited real estate sites in the country.

Uhm, why is that?

Well, we want to be sure our agents get the leads your home listing generates. And those meanies at the third party site want to charge for them!

Uhm, isn’t the point to sell our home, not generate leads for you and other agents?

Seems like an”¦ uncomfortable”¦ conversation to have. Good luck explaining your decision to not market a listing on high traffic sites. And you WILL be disclosing to all your potential clients that you’ve elected to withhold their homes from these sites, won’t you? Of course you will. So get ready for that other awkward conversation like this:

So, you won’t be putting our listing on the most visited real estate web sites. XYZ Realty says they will. Why should we list with you and not them?

We have expert agents!

XYZ Realty says they do too. Is there any brokerage out there that says, “Use us! We have shitty agents!”?

We have a 197,381 point marketing plan for your home!

That doesn’t include putting our home listing on two of the top three most visited websites on the planet”¦

This conversation seems so much simpler, and so much more effective:

So Mr. Agent, you’ll put our home listing on the internet, won’t you?

You’re damn right we will. That thing will be plastered across so many sites that home buyers won’t be able to miss it.

Maybe it’s just me, but I like simple, effective communication with clients.

I like getting their homes on high traffic sites.

I like selling their homes.

Concerned you won’t get leads from your listings? You know what the best lead generator in the history of commerce is?

A satisfied client.

Help Me Understand

I know for a fact there are a lot of agents and brokers that have heartburn over third party listing sites. Apparently Edina does. I’m having a conversation at this very moment with an agent I respect the hell out of who has concerns about them. There seem to be plenty of others as well.

To be perfectly honest, it appears that much of the consternation may well be surrounding the fact that it is likely more difficult to double-side a transaction if someone else is getting leads from your listings. That isn’t a concern of mine as I abhor single-agent dual agency and will avoid it like the plague. But I have yet to hear anyone come out and say they want leads on their listings because they want to double-side them. Why is that?

Maybe that assessment is off base, but clearly I don’t understand the angst with third party sites. Please, enlighten me”¦

UPDATE Nov 18: Edina has issued a statement on this matter. Thanks to Edina agent Aaron Dickinson for providing the link to Edina’s statement.

Others Opine:

John Murphy – Has Edina Realty Just Declared War on Real Estate Web Site Aggregators ”“ Trulia and Realtor.com?

Image: Top 10 Visited Real Estate Sites. Week ending 11/12/2011. From Experian Hitwise.

On Open Houses

June 10, 2011 By Jay Thompson

The ink was barely dry on my real estate license. I needed business and no clue how to secure it. Figuring I’d tap into my broker’s 30+ years of experience, I said to him, “Yo! How do I get clients?”

“Here’s a printout of all our listings. Hold open houses. It’s the single best way to pick up buyers.”

“Do people actually buy homes they visit at open houses?”

“Hardly ever. But that’s not the point. You’re looking for buyer clients ”“ clients who will buy something.”

That’s. Not. The. Point.

Really? Something tells me that if you are trying to sell a home and you tell the sellers that you want to hold their home open, not to sell it but to get yourself some new clients, that they will tell you to”¦ take a hike.

Is this how that conversation goes?

“Hi there dear client. I’d like to hold an open house in your home this weekend!”

“Great! Do you think that will get it sold?”

“Oh, that hardly ever happens. According to the National Association of Realtors 2010 Profile of Home Buyers and Sellers, only 2% of home buyers between the ages of 25 and 64 say the first step they take in finding a home is visiting an open house. And only 11% say they found their home by the yard sign and/or an open house. Most agents say the odds of actually selling the home held open are extremely remote, on the order of 1 ”“ 2%”¦”

“Well, then what is the point in holding my home open?”

“It’s a great way for me to pick up new buyer clients!”

Yessir, I want you to leave your house for several hours on the weekend (make sure to clean it first), lock up all your valuables and prescription medications, and let complete strangers into your home (hopefully none are criminals scoping out what to come back and steal) ”“ all so I can build my base of clients.

What a deal!

More likely the conversation with the seller goes like this:

“Hi there dear client, I’d like to hold an open house in your home this weekend! It will provide a ton of exposure to your home, create buzz, and get buyers really excited about your home! I’ll carpet bomb the neighborhood with invitations, bake some cookies so the home smells great, and buyers will flock here in droves. It’ll go viral! It’ll be awesome!!”

And there will be no mention what-so-ever of the true purpose of holding the open house — so the agent can get exposure to potential buyers and work their magic converting them into clients.

That lack of disclosure is just plain wrong, in my opinion. Well, not just mine. Read Michael McClure’s insightful article, The Ethics of Open Houses. I linked to this article on my Facebook profile earlier this week and an excellent 112 comment discussion ensued. There is some great conversation in that thread, both pro and con over open houses (and like any “electronic conversation” it sometimes wanders off topic).

That conversation is really the reason I’m writing this post. Facebook discussions are very transient which makes them difficult to find and I wanted to be able to reference that conversation, and the shared links, in the future. Putting a link to the conversation on this blog makes that possible.

I did not write this post to demean anyone who believes in open houses. Hey, if they work for you, knock yourself out. Hopefully if you are using open houses to acquire new clients you are disclosing that information to your sellers. If you aren’t disclosing that, well”¦ shame on you.

Can open houses actually sell the specific home being held open? Of course they can. Are they the most efficient marketing method for selling a home? Not even remotely according to numerous reports from agents as well as the National Association of Realtors. I’m sure that local conditions and customs play a large part in the true success of open houses. (And I’m defining “true success” of an open house as actually selling THAT house.)

Another thing that seems to escape most of the agent-to-agent conversations about open houses are that if an unrepresented buyer does happen to come along and decide to purchase the home, then the listing agent is probably going to wind up representing both the buyer and the seller. Now we’ve entered into the dark and ugly world of single-agent dual agency ”“ where one agent represents both buyer and seller in the same transaction. You don’t want to get me started on that. See On Dual Agency, for my general thoughts on that matter if you are so inclined.

Here’s a little video I made during that Facebook conversation. It’s just a quick and fun look at what agents might actually be doing at open houses. Don’t be a hater, it was supposed to be funny.

Home sellers, buyers, agents and brokers, what are your experiences with open houses? Do they “work” ”“ however you chose to define “work”? Do sellers “expect” their agents to hold open houses? How do you react to that? Personally, I think the time spent marketing and sitting in an open house is far better spent working on activities that are proven to reach more buyers ”“ that being primarily the Internet.

But maybe that’s just me”¦

Photo Credit: Orin Zebest on Flickr. CC Licensed.

Real Estate 101: Representation

February 3, 2010 By Jay Thompson

Jay’s Note: “Real Estate 101” is a new series where we’ll explore the basics of real estate buying, selling and investing. Definitions, explanations and of course opinions. If you’ve been here long, you already know many of my series fail miserably. This one should stick though as the material is endless. And it’s not just for those who don’t know a lot about the real estate process, there should be information aplenty for just about everyone. It would be silly to commit to a rigorous posting schedule, as that would just be setting myself up for failure. I betcha we’ll get 2 ”“ 4 articles a month though. I’ll also go back through the archives as well as other industry blogs and spotlight some oldie but goodie articles on the Real Estate 101 page (accessible through the main navigation bar under the header).

Here’s a rough transcript of a call I got last night. Similar conversations happen multiple times a week. . .

Caller: I’m calling about your listing. . .

(95% of the time, it’s not our listing. Our sites show ALL homes for sale in the Phoenix area)

Me: That isn’t our listing, but I’d be happy to give you some information on it.

Caller: I’d rather speak to the listing agent.

Me: Mind if I ask you why? They represent the seller, and the seller’s interests. . .

Caller: I understand how real estate works. The listing agent won’t make as much money if you sell the home. They will discount their commission if I work through them.

Me: Maybe, maybe not. But you’ll have no negotiation position. It’s quite likely we could get the home for a lower price ”“ saving you more than the thousand or so they might take off their commission.

Caller: That’s OK, I know how real estate works. YOU get more if I pay more.

So here is a guy that is convinced he can save money if he uses an agent that represents the other party in the transaction. The same agent who already has a fiduciary duty to the seller. If you are buying a home, don’t you want someone working with you and representing your interests?

Sure, dual agency is legal in Arizona (and many other places). Here you’ll need to sign a document saying you are OK with having limited representation. Read that again ”“ if you are a buyer and you insist on working with the seller’s agent, you have to agree to limited representation.

Is limited representation worth “saving” a couple of thousand (at best) on a purchase of the size, complexity and cost of a real estate transaction?

Let’s take our caller for example. He was calling on a $190K home. So let’s say for the benefit of argument that the listing agent says, “Sure, I’ll drop my commission by 1% of the sales price”. I assure you he’s thinking on a full price offer (after all, he’s already working for the seller to get them top price). So that means the caller can now (maybe) purchase the home for $188,100 in theory “saving” the buyer $1,900.

Let’s do a little math:

Buyer is putting down 20%, and can get a 5.5% fixed interest rate 30 year mortgage.

With a purchase price of 190,000, the buyer needs $38,000 down, so he’s financing $152,000.

That would be a monthly payment of $1,021.

With a purchase price of $188,100, the buyer needs $37,620 down so he’s financing $150,480.

That would be a monthly payment of $1,011.

So what, exactly, is the buyer “saving”?

OK, they need to show up with $380 less of a down payment. And his monthly payment will drop by a whopping $10 a month.

(yes, over the 30 year life of the loan, that $10/month amounts to $3,600. Assuming of course, you really live in the home for 30 years.)

Worth it?

What if, with his own representation he was able to negotiate a purchase price of 5% under list (which is entirely possible in the Phoenix market, and many others).

190,000 ”“ 5% = $180,500 purchase price. $36,100 down. $970 month. That’s $1,520 less down and a $41/month lower payment.

What if, with his own representation, he was able to get some seller concessions toward closing costs AND a lower sales price?

What if, with his own representation, he was able to get the seller to “buy down” his mortgage, resulting in a significantly lower payment across the term of the loan?

Do you really think an agent who represents the seller’s best interest is going to attempt to do this for you the buyer? Remember, you get limited representation. . .

Here’s a thought. Say you are interested in an REO property. During your inspection you find the home needs a new roof (water heater, A/C ”“ insert expensive item here). Do you think the seller’s agent is going to go to bat for you? Think he’s going to risk pissing off the lender (his client) and possibly lose future listings from that lender? No, he’s going to say, “Sorry, REO’s are always sold as-is”. (Hint ”“ sometimes a good buyer’s agent can get a bank to make major repairs, even if the home is listed as is).

Representation is important. We’re not talking about walking into Best Buy and purchasing a television. If that doesn’t work out, you can return it. And you’re not spending 200 thousand on a TV. We’re talking about a home purchase, quite likely the single largest purchase you’ll make in your lifetime.

Don’t you want someone representing you and only you and your best interests?

On Dual Agency

July 24, 2009 By Jay Thompson

Dual agency, the practice of the same agent / brokerage representing both the buyer and seller in the same real estate transaction, has long been the subject of debate.

Every few months, some real estate agent will get all spooled up about dual agency.

Now it’s my turn.

Prompted (this time) by discussions on several posts and comments at Inman News, I find myself scratching my head. It puzzles me that some real estate agents and brokers see nothing wrong with representing both the buyer and seller in the same transaction.

Let me be clear. Dual Agency is perfectly legal in Arizona (and in many other states). But, just because something is legal doesn’t make it right or what is best for all parties involved.

In particular, my beef is with single agent dual agency. Where ONE person represents both a buyer and a seller for the same piece of real estate. Dual agency also applies if any two agents within a real estate brokerage represent both the buyer and seller. With “mega brokerages” having hundreds (sometimes thousands) of agents, intra-brokerage dual agency is sometimes impossible to avoid. That’s a whole ”˜nuther article. For the record though, personally my angst with single agent dual agency diminishes when we’re talking intra-brokerage dual agency. My wife and I are both agents, and I can assure you that if Francy represents the seller and I represent the buyer, neither one of us is going to even remotely consider compromising our clients interests. I adore her, but when it comes to business, we’re both completely committed to doing what is best for our clients.

What’s Wrong with Single Agent Dual Agency?

Ask any seller of real estate what their primary goal is. I’ll bet you a commission check they say, “Getting as much money as possible for my property”. Ask any real estate buyer what their primary goal is and I’ll throw in a first-born child if they don’t say, “To buy a home at the lowest price possible”.

How then can the same agent facilitate reaching both of these conflicting goals?

I don’t care how much experience you have, I don’t care how fair you are, I don’t care if you can walk on water. One agent can not get the seller the most money and save the buyer the most money in the same transaction. Period.

Single agent dual agency is a stunningly obvious conflict of interest.

Michelle Lind, Esq., general Counsel to the Arizona Association of Realtors says this about dual agency (source ”“ AAR members only):

A dual agent must not advocate or negotiate on behalf of either the buyer or the seller.

And this:

Q: May a dual agent aggressively work to secure the best possible price for one party?
A: No. A dual agent can do nothing to advance the interests of one party over the other.

You can’t advocate for your clients, you can’t negotiate, you can do nothing to advance the interests of your client.

And this is OK???

The Argument for Dual Agency

Follow any dual agency debate and you will see references along the lines of, “as long as it’s disclosed, there is nothing wrong with dual agency”. Let’s take a look at the Arizona dual agency disclosure form that is required to be signed by the parties involved in a dual agency situation.

Here’s the header of the document that makes dual agency perfectly acceptable to many real estate agents and brokers:

Consent to. . . LIMITED Representation.

Yessir. If you want the same agent working for both the buyer and the seller in the same transaction, you have to consent to ”“ let’s all say it together ”“ LIMITED representation.

Here’s some of the disclosure verbiage (my emphasis in bold):

Line 12: The Licensee or each Licensee represents both the Buyer and Seller with limitations of the duties owed to the Buyer and the Seller.

Line 16: There will be conflicts in the duties of loyalty, obedience, disclosure and confidentiality.

The freaking form itself, the very form that many cite as making dual agency OK, is telling you that the agent’s duties will be limited and there will be conflicts!

Someone out there right now is rolling their eyes, saying out loud, “I’m a kick ass agent. I can fairly represent both parties in the same transaction”.

Of course you can be fair. But can you really get the best for BOTH clients? I don’t sell real estate with the goal of “being fair” to my clients. I take my fiduciary responsibility seriously. I want the absolute BEST deal for my clients. Not just what’s “fair”. You can’t get what’s best for both buyer and seller at the same time. THERE WILL BE CONFLICTS in your duties ”“ it says so right in the precious disclosure form.

So Why Would an Agent Practice Dual Agency?

Beats the hell out of me.

Could it be for the windfall payday it can produce?

I won’t say this is why all the agents who practice dual agency do it, but it’s important for the home buyer and seller to be aware of.

When a home is listed for sale, there is a commission that is negotiated. That commission is split (usually evenly, though it doesn’t have to be) between the listing (sellers) agent and the buyers agent. Well, technically it’s split between the listing and buyers brokerages, which then farms it out to the agents. But for simplicity sake, we’ll say it’s split between agents.

Let’s say, for example only, the commission is a total of 6% of the sales price and evenly split. So when the transaction closes, the seller’s agent gets a check for 3% of the sales price, and the buyer’s agent gets a check for 3% of the sales price.

In a dual agency situation, the sellers agent is also the buyers agent. So guess what? That person gets the entire 6% commission.

It’s called “double siding” or “double ending” or “double dipping” the transaction.

I have witnessed brokers and agents whooping and hollering and high fiving when they close a double-sided deal. Are they carrying on because both of their clients were fully served and represented? No, they are acting like they just scored a game winning touchdown because they just got a big fat paycheck.

It makes me want to puke.

Someone tell me how the CLIENTS benefit from dual agency?

Please. Just one example of how a buyer and seller both have a more fruitful, beneficial experience. Tell me not how YOU benefit, but how the CLIENTS benefit from dual agency.

Someone is going to say, “One agent can pull together a deal better and faster than two agents”. Faster, eh maybe. But I want DETAILS as to how it’s “better”.

Someone is going to say, “There are lots of lousy agents out there. If I represent both parties, I don’t have to worry about a bad agent blowing the deal.” What a load of crap. Yes, there are lousy agents out there. I can’t tell you how many times I’ve done almost all the legwork on both sides to get a transaction to the closing table. I do both jobs to hold the deal together. That’s what any good agent does. I’m not going to let incompetence on the other side blow the transaction. That doesn’t mean I have to represent both parties.

“But sometimes dual agency can’t be avoided!”

Why not? If you have a listing, and a potential buyer calls that isn’t represented, you say, “I represent the seller and their interests. You should have you own representation that will represent your interests.” Then give them some instruction on how to find an agent, or give them some names to chose from of agents you respect that you know will represent them well. How hard is that? No one HAS to conduct dual agency. Sure, you’ll make less money. Maybe significantly so. But you’ll be doing what is best for YOUR client.

What if the buyer says, “I don’t need representation, can’t you just fill out the forms?”. That’s a really bad idea, but if that’s what they want fine. But they’re going to sign the Real Estate Agency Disclosure and Election form and put a check box where it says I represent the seller as the seller’s broker before anything else is even discussed.

Dual agency can’t be avoided? That’s a bunch of hooey.

Here are a couple of defensive nuggets straight from the Inman comments:

"It may be in the best interest of both buyer and seller to work with an agent who is motivated by a full commission."

Oh for the love of Pete. You know what motivates me? Getting the best deal for my client. That makes a happy client. You know what happy clients do? They tell their friends and family how amazing you are. It’s called word of mouth marketing. It’s called superior customer service. It’s called value added. All that will generate far more income over the life of your business than double dipping a deal and representing people in a limited fashion. Folks, if your agent is only motivated by a “full commission” do yourself a huge favor ”“ find a new agent.

"Bottomline: Dual agency is doable and really represents an advanced level of real estate brokerage practice."

Huh? Sure it’s “doable”. It’s usually easier to do a LIMITED job as opposed to a thorough job. How dual agency represents an “advanced level of real estate brokerage practice” is beyond my comprehension.

Seriously, I would love to hear one compelling argument for how the clients benefit from a dual agency relationship. Please, leave a comment if you’ve got one.

So, what can be done to stop single agent dual agency?

Ultimately, nothing. About all that can be done is to try to educate the general population about the pitfalls of dual agency. Oh I suppose in theory it could be made illegal. Good luck getting that past the big brokerages and real estate lobbyists. There are far too many brokers and agents out there that see nothing wrong with limited representation. And with some brokerages having thousands of agents, intra-brokerage dual agency probably couldn’t be eliminated even if everyone wanted it to.

If an agent wants to practice dual agency, the law won’t stop them. If you are a real estate buyer or seller though, you should give serious thought as to whether you really wanted limited representation in what is most likely the single largest financial transaction you’ll ever make.

Think about it. . .

Photo credit: Looking Glass, Creative Commons license