I am not sure if anyone has posted about this yet. I just got back from the "weekend" off to be with my oldest son who made his confirmation. When I miss more than 3 minutes in the blogosphere and in my office the crap (I know I can use that word because the Lovely wife uses it all the time, she even had a post about it) hits the fan. I have to spend HOURS, if not days regrouping my crap. But this is not what I am writing about.
Over at BloodhoundBlog.com they have quite debate going on over there between Greg Swan, Russell Shaw and Jeff Brown. The debate is the same old debate that has been going on for hundreds of years - probably as long as people have bought and sold Real Estate. Greg Swan has made an excellent argument as well as the other two mentioned.
Greg points out that an agent who is the listing agent but directs and helps a buyer is putting the sellers at a disadvantage - good point. Where as Russel and Jeff claim they are representing both the sellers as well as the buyers. This is where it gets fuzzy. As a Real Estate agent or for that matter an attorney can NOT represent both parties at the same time AND GET PAID BY BOTH PARTIES! BUT, you can represent one party and WORK with the other and ONLY get paid by one party.
So in other words. I can as a listing agent represent the sellers and work WITH the buyers as my customers. MY Fiduciary duties are to the seller, but I owe the customers fair and honest dealings. So, the question remains - Can a LISTING agent - act as a DUAL AGENT? My answer to this is YES, ONLY if the agent is getting paid by one side of the transaction and if it is a disclosed agency - meaning the sellers are the clients and the buyers are the customers and both parties are aware of who the agent works for. So, a listing agent can have an agreement signed by the sellers, with commission being paid by the sellers. A listing agent can even do an open house or bring their own buyer - BUT, can only get paid by the seller.
Example 1: Mr. Seller and listing agent fill out a multiple listing agreement and an exclusive right to sell with a 5% commission. Mr. listing agent puts the data into the mls system with a predetermined split, say 2.5% for the listing side and 2.5% for the (SBC) selling side. Mr. Agent from another office (Selling Broker/sub agent), shows the home, gets an offer and offer gets accepted. Commission is due upon close. Mr. Listing agent gets his 2.5% from seller and Mr. Agent from another office(selling/sub agent) gets paid his 2.5% from the seller. The buyer was unrepresented but working with the Mr. Selling agent. (there was no buyer broker agreement signed and the selling broker knows the commission is being paid by the seller at closing).
Example 2: Mr. Seller and listing agent fill out a mls agreement and a ERS with the same 5% commission. Mr. Listing agent puts data onto the mls system with the same predetermined split (SBC)2.5% each side. Mr. Listing agent does an open house and - voila a buyer. THAT AGENT has entered into a DUAL AGENCY. But, Mr. Listing agent is still only getting paid by the seller, the full 5%. The buyer is unrepresented but working with Mr. Listing agent.
Example 3: Mr. Seller and listing agent fill out a mls agreement and ERS with the same 5% commission. Mr. Listing agent puts data onto mls system with the same 2.5% split. Mr. Listing agent does an open house and Mr. Buyer Broker walks in with his client who has already determined that Mr. Buyer Broker will get paid by Mr. Buyer. Mr. Listing agent gets paid the full 5% AND the Buyer Broker gets ZERO, Nada, Zilch. I noted in the MLS Buyer Broker 0. (the Buyer Broker gets paid only from the buyer whatever they predetermined). The buyer was represented and was the client of the selling broker. The Seller was the listing agents client and was represented by the listing agent.
Therefore, I will agree with Greg on the aspect that you can not equally represent both parties at the same time, but you can represent ONE and work with the other.
So, in my perspective, I view Queens Ny, as a total SELLER agency. We are not representing the buyers ever - its obvious. Yes, there are agents that bring the buyer to the table, could be in my office or out of my office but these agents that are "shopping with the buyers" are still working for the sellers. Our attorneys deal with the closing dates - Which could work for or against either party. That has nothing to do with the listing or sub agent. I can list a home, market the home and sell the home to buyers but the attorneys will guide and assist the sellers on the best days to close, in NY - that is out of the agents hands.
I have written a number of articles about buyer brokers in the past.
NY Houses 4 Sale: BloodHoundBlog - "Are you being treated like a grown up?"
NY Houses 4 Sale: Are you the customer or client?
NY Houses 4 Sale: Buyer agency and Seller agency - two different roles.
Comments(33)