Here is yet another insider’s look at the ever-changing real estate industry.
It’s a story with a large fork in the road, and a path that some one can went down willfully.
I can’t help but wonder how often the other path may be traveled…
I often find that many buyers and sellers are confused as to the actual definition of “Multiple Representation.” Or as it is also called, “Dual Agency.”
Buyers and sellers recognize that a dual agency situation occurs when the listing agent for a given property also has a buyer in the transaction. If one agent represents both buyer and seller, a dual agency situation is formed.
But what some buyers and sellers don’t realize is that if two members of any one brokerage are involved in the same transaction, representing buyer and seller respectively, then the transaction is also dual agency.
That’s right – if I have a buyer for a property that is listed by another agent at my brokerage*, its dual agency!
Case analysis for understanding
(casts and character, story is fictional for understanding purpose)
Assume I had a listing –nice sellable condo with good demand
The property attracted multiple offers, and I found myself in a dual agency situation.
Assume I was working the open house for the property, and a man named “j” walked through the door.
He seemed like a decent guy; very aggressive and very knowledgeable.
“J” took down my information and called me first-thing on the subsequent Monday morning. He asked me about the level of interest in the property and if I told him that it was “substantial.”
The property was accurately priced at $299,000, in my mind, at least, but if the interest was any indication, I would have speculated that it would sell for a $15,000 premium.
Offers were being reviewed that Thursday, and on Wednesday afternoon, “J” called me to say that he would like to submit an offer. I told him that unless he was the only offer, I would have to refer him to a colleague so that he/she could present his offer.
It would be very unfair, and very unethical, for me to present my own offer to my own sellers!
I don’t know how it works at other brokerages, but at our Re/max Real Estate, we do everything by the book, and we always err on the side of caution and fairness.
Assume I enlisted my colleague to present “J” offer.agent is “j” too
On that very interesting Thursday eve, there were six offers.
Co-op agent for ‘J” dealt with |J” as I had instructed her to, and “J” didn’t touch base with me during the day, as I told him he shouldn’t.
I sat with my sellers in the living room of their property, and one after one, the six agents came into the room and presented their offers. One of these agents, of course, was agent for “j”.
Seeing the offer that presented was the first time I had seen “J” name on paper, and the first time I had any idea what price he would be offering.
I discussed the six offers with my seller, and we decided to work with the top two offers and send the other four agents home. The top two offers were only $1000 apart for assumption and about $10,000 higher than the next highest.
We sent the two agents back, one of which was agent for “j”
If A half hour later, I receive a phone call from “J”. I may shock to see his name on my call display! When I specifically told him that he had to deal with other agent as I was dealing with my sellers.
I answered the phone with a bit of a “Hellooooooo?” Note the question mark…
“J” immediately responded, “So how are we lookin’?” like I am his agent !!
I suppose he figured that I was going to tell him all about the offer process thus far.
I told “j” that he should direct all his questions to his agent “j”, and he said, “Oh come on, you can cut that crap out now. There are two offers in play and I’m one of them, so just tell me what the other guy comes back at and I’ll beat it.” — (I think all agent like it but not fair –its ok only when not in multiple offer situation and you find buyer your self and sell listing-when both buyer ,seller are informed clients)
From the hallway in this property, you can imagine its worst scenario for agent now as per changing laws. I already can tell you how this was going to end.
Agent should tell buyer “J” that I couldn’t do what he was asking, as it was unethical and it would violate countless rules.
Then buyer would argue what I knew would be coming eventually: “Pretend for two seconds that you don’t want to make two commissions tonight.”
Buyer ‘J” don’t want to know the law at all-he just like the property
Folks, I’m in this business for the long haul.
There are now almost 30,000 Realtors in the GTA, and if the real estate industry ever gets the enema we’re told is on the horizon, I plan on being one of the 10,000 – 15,000 agents left when all is said and done.
Maybe there are some Realtors who chase one commission after the next, but I firmly believe in building a business and a solid reputation over time.
I like to tell buyer ‘J’ that there was no way I could tell him the terms of the other offer.
He may asked why, and I simply can say, “Because I have integrity.”
You know the same buyer can answer me “Yeah well your @#$% integrity just cost you eight grand tonight, bud,” and he may hung up the phone.
He can say something rude to his agent, and then he sailed off into the night.
My sellers may accepted the other offer (which came back $3,500 higher or low), and they will be quite pleased.
But I began to question my actions; not as to whether or not they were right or wrong, but as to whether they represented the road less traveled.
I wondered what other agents might have done in that situation.
I work hard for my clients, and I am a very aggressive agent. I’m a good negotiator, I’m incredibly knowledgeable about the market and the thousands of condominiums and residential neighborhoods in it, and my marketing and advertising of properties is second to none.
But if anybody out there thinks that I’m going to violate the RECO Code of Ethics or the Real Estate and Business Brokers Act, then they should seek other representation.
There are some grey areas in real estate, and while someone don’t seek to exploit them, neither certainly aim to take advantage of a good situation.
But there is no deal, commission, client, or property worth breaking the rules for.
If you have any questions/suggestion or require more information, please do not hesitate to contact me and I will be happy to assist you.
Sales Representative- REALTOR®,
RE/MAX Dynasty Realty Inc. Brokerage*
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