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Putting the Genie back in the bottle. Many buyers today reject representation.

By Richard Weisser

Real Estate Broker/Owner with Richard Weisser Realty

March 28, 2011 01:45 AM

When I started selling real estate in 1984, the phrase “buyer agency” was rarely mentioned and even more seldom employed.

Unless a buyer chose to pay an agent out of their pocket, (which never happened to me or any agent that I knew,) all agents represented the seller either directly or as a sub-agent.

This resulted in landmark litigation in which buyers sued brokerage companies that purported to be the “buyer’s agent” but in actuality were agents of the seller. Buyers DEMANDED representation, and it became customary for sellers to pay for the buyer’s agent.

As a consequence buyer’s agency became a standard practice, and most buyers chose to take advantage of having representation on their side of the transaction.

Fast forward to 2011. We are getting more contacts from buyers that want to eschew representation and DEMAND to work exclusively with the listing agent. The theory is that the money normally paid to a buyer’s agent is on the table and up for grabs.

And even though ALL commissions are indeed negotiable, this practice erodes the additional layer of consumer protection that was demanded by buyers in court and at legislatures across the land.

I believe that consumers have the right to make their own decision when it comes to representation. But I would also like to think that the consumer victories in the past were not won in vain.

We have come a long way to get to where we are today.

I don’t like the idea of going back to where we started.

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Richard Weisser

Richard Weisser Realty - Newnan, GA

Richard Weisser Retired Real Estate Professional

Mike...

I have experienced this going full circle. Thanks so much for the comment/

Cindy...

I like the way you think. It is about THEM and not about US! Thanks.

Mar 28, 2011 02:04 AM

Tim Bradley

Contour Investment Properties - Jackson Hole, WY

Commercial Real Estate Expert in Jackson Hole, WY

Like you, I've been on both sides of this coin. I have closed several deals because I was the listing broker, and the buyer was confident they would get the best deal by working with the listing broker.

Wyoming offers lots of choices to agents and the public: Buyer's Agent, Seller's Agent, Sub-Agent, Intermediary, Customer, Designated Agent. One thing has not changed, sadly. Many, if not most, agents/brokers in my local market either don't truly understand the forms of agency, or don't bother to explain them. That't the real tragedy.

Mar 28, 2011 02:17 AM

Mike Carlier

Lakeville, MN

More opinions than you want to hear about.

Judging from other posts on buyer agency, I'm inclined to agree with Tim. Most agents seem to think that a buyer agency agreement is nothing more than a way to lock in their commission. Minnesota statute requires a written buyer agency agreement before a licensee performs any acts as a buyer's representative. The statute protects consumers, and informed consumers seldom choose non-representation.

Mar 28, 2011 02:47 AM

Craig Rutman

Helping people in transition - Cary, NC

Raleigh, Cary, Apex area Realtor

I think if the industry as a whole, and NAR specifically, spent more time publicizing the benefits of buyer agency as opposed to the "now is a great time to buy" message, we wouldn't be facing this full circle chain of events.

Mar 28, 2011 03:04 AM

Gary L. Waters Broker Associate, Bucci Realty

Bucci Realty, Inc. - Melbourne, FL

Eighteen Years Experience in Brevard County

No matter how often the word gets spread people still believe the listing agent will get them the best deal!

Mar 28, 2011 03:11 AM

Leslie Ebersole

Swanepoel T3 Group - Saint Charles, IL

I help brokers build businesses they love.

Once people have a good experience with a buyer's agent they become staunch advocates. If the agent really worked hard, got them a great house at a great price and then managed a smooth transaction, that person becomes a raving fan. If an agent fumbles and is lazy and lets stuff drop, they think the commission was a waste of money.

Mar 28, 2011 03:26 AM

Liz and Bill Spear

Transaction Alliance 513.520.5305 www.LizTour.com - Mason, OH

Transaction Alliance Cincinnati & Dayton suburbs

Richard, We've encountered some of the same mindset individuals here. Perhaps with so much info on the Net they think they have all the need to protect themselves. A false assumption typically.

Mar 28, 2011 03:28 AM

William Feela

WHISPERING PINES REALTY - North Branch, MN

Realtor, Whispering Pines Realty 651-674-5999 No.

Richard..., Interesting. Not something I have run across yet. Ove the years I have had people tell me they would only look at a home with a listing agent because they felt they could get a better deal. (Commission based again)

I like the way things are right now. But, the status quo isn't always good enough for some!

Mar 28, 2011 04:18 AM

Sussie Sutton

David Tracy Real Estate - Houston, TX

David Tracy Real Estate for Buyers & Sellers

I know from reading about what Real Estate agents had to do in the past....that we current agents will have more changes to deal with in the future..

Mar 28, 2011 05:09 AM

Ginny Gorman

RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate - North Kingstown, RI

Homes for Sale in Southern RI and beyond

Richard, i do think the myths persist out there for buyers working with an agent...they also feel totally empowered by the internet to go without one...they do feel that they will get a better price in negotiations by going to the listing agent directly when i've talked to a few of them recently..i agree with Craig that the NAR is missing the boat on this one...this will put us back 20 years...

Mar 28, 2011 05:33 AM

Rene Fabre

ARFCO Media - Renton, WA

Practicing Philosophical Eclectic of the Arts

The challenge with buyers self educating online is they think they may know it all, yet they don't know what they don't know. They haven't been trained. Having learned from experience, I welcome being represented as a buyer, and as a seller. The challenge for either is to choose the right agent.

Mar 28, 2011 08:04 AM

Diane McDermott

Realtor®, GRI, Landis e2 Real Estate, LLC - Charlotte, NC

Charlotte NC Real Estate Market

Rejecting representation to get a price "advantage" that you may very well have been able to get anyway can come with the much greater hidden cost to the buyer of literally giving the seller side LOTS of info that they can use against you from offer to closing, but some buyers don't consider that.

Mar 28, 2011 09:28 AM

Deborah Byron Leffler BzyBee Real Estate Lady!

Keller Williams Realty Boise - Nampa, ID

Well Igot into Real Estate about the time that Agency was a hot topic...It is crazy how some think. Had a buyer from ALaska call me to ask questions regarding a blog I wrote...and could they get out of an offer...and did they pay to much....they had made the offer through the listing agent! gulp....I told her to still ask for comparables...and see what happens....

Mar 28, 2011 12:07 PM

Don Rogers

Keller Williams Realty Chesterfield - O'Fallon, MO

Realtor, Broker, CDPE, GRI, OnullFallon MO & St Charles County MO homes

Richard,

I am thinking that if we go back then somewhere along the way we will seeing the same type of law suits all over again.

Mar 28, 2011 12:21 PM

Claudette Millette

The Buyers' Counsel - Ashland, MA

Buyer, Broker - Metrowest Mass

Richard:

When buyers truly understand just how much professional help is available to them "free of charge" to assist them with their most important purchase, they embrace the idea. But they have to be able to trust the person who is offering the help.

I am with you - I don't want to go back to where we started.

Mar 28, 2011 02:36 PM

Richard Iarossi

Coldwell Banker Residential Brokerage - Crofton, MD

Crofton MD Real Estate, Annapolis MD Real Estate

Richard,

I can only think that its happening because they believe that they'll be able to reduce the commission dealing directly with the listing agent. What a sad, terrible mistake.

Rich

Mar 28, 2011 03:27 PM

Kim Inman

Mountains to Lakes Real Estate, Inc. - Harriman, TN

CRS, Broker/Owner

Richard...I think buyers want to say they don't want representation but then they do want the services that we would give them IF we were representing them. They want someone to advise them and if I'm not representing them I can't advise them.

Mar 28, 2011 04:27 PM

Gary Woltal

Keller Williams Realty - Flower Mound, TX

Assoc. Broker Realtor SFR Dallas Ft. Worth

Buyer agency is a SUPER WIN for the consumer. The problem is most don't understand it and that is the fault of REALTORS not explaining it well to them. It is our job to do that in the area of education.

Mar 29, 2011 03:45 AM

Olga Diaz

COLDWELL BANKER TOMLINSON - Pullman, WA

Potter, Mng Broker, CRS, ASP, ePRO, ABR

Richard, I really liked your post. I just took the ABR classes and Buyer Agency was something we spoke. It makes so much to have the representation! I agree with Gary! You need to take the time to explain what Buyer Agency is and explain it well!

Mar 29, 2011 04:22 AM

Robert L. Brown

www.mrbrownsellsgr.com - Grand Rapids, MI

Grand Rapids Real Estate Bellabay Realty, West Mic

I haven't seen that much around here but i've worked with some of the same buyers for several years. IMHO it's how we as realtors educate them (as buyer's) that this is a service they NEED to get the best possible deal. Going out there on your own can be hazardous to you "buying" health.

Mar 30, 2011 11:45 AM