A Brief History of Real Estate Agency
Once upon a time, a long long time ago a farmer and his wife were facing hard times as their family grew larger but so busy were they that they had no time to look for a larger farm. All the adjoining land in their
valley was already owned and being cultivated by other farmers.
The village matchmaker (as in marriages) wasn’t busy at the time and the farmer’s wife (Brunhilda) was chatting with her (Gertrude but they called her Trudy for short), and saying how they needed more land to grow crops for their growing family. Trudy, being an eager and very helpful person, thought carefully and remembered learning about a family from a nearby valley, over the mountain, that was not fully settled, that was hoping to attract another family that might have sons to marry their daughters.
Trudy set out to check this out for herself and in a few days she visited Brunhilda again and told her she’d found some land for her family to move to. Brunhilda, knowing how good a matchmaker Trudy was renowned to be, asked her to make the arrangements with the owner of the land in the nearby valley called Berksvald. Trudy went back and forth between the landowner in Berksvald and Brunhilda and her husband to work out the details. What’s more, Trudy was able to arrange the transfer of Brunhillda and her husband, Thorgood’s small farm to their neighbor Jossman who paid with cattle and sheep that would help the family get started on their new land.
Well, that’s how agency got its start. Trudy prospered as a matchmaker of young persons seeking to marry as well as the same young families needing a place to live. Everyone trusted Trudy to make a good match as she knew not only the families but also the region. They placed their TRUST in her to do RIGHT by them for which she was duly paid.
One interesting side note to this was that Trudy helped everyone, not just one family. She was a matchmaker and for this she was counted on to treat both sides of every match with equal care and consideration. Everyone knew she was fair-minded and they could count on her not to cheat or take advantage of either party.
Flash forward many many hundreds of years and now there is a new breed of agent, we’ll call him Arvo to protect his identity since he’s still around. Arvo believes that his job as an agent is to try to take some sort of advantage, any he can, for his new breed of seller that is now called a client. Arvo’s client, the seller, Sven Sogge isn’t from the town but moved here some 5 years ago. In fact few of the townspeople grew up in the town. So Sven wants Arvo his agent to get a super high price, much higher than Arvo told him the property was probably worth and to help him get this high price Sven is not talking about some of the things he knows are wrong with the house and land and hopes Arvo won’t find out or ask any awkward questions. Arvo is obedient and never asks for information about problems. Sven doesn’t volunteer information and Arvo carefully keeps Sven and the future potential buyers Mr. & Mrs. Brandvold away from Sven Sogge so there’s no chance the Brandvolds would ask Sven any compromising questions. When the Brandvolds ask some questions of Arvo he just answers he doesn’t know and leaves it up to them to try to find out on their own.
There is a new “matchmaker” in town, Trina Bjeland. Her role is to be a transaction broker, also called a facilitator. We’ll call her TB for short. Trina follows The Golden Rule. She believes in her heart that when she puts a match together, she wants both buyers and sellers to know everything she knows or could reasonably know about a property. She also believes that the personal information about both parties should be kept confidential. Trina asks all sorts of questions, she has the sellers fill out a property questionnaire which covers all the important aspects of the property from problems such as dampness to permits and repairs. Trina puts herself in both the buyers’ and the sellers’ shoes as it were, so that both sides can make fully informed decisions. Hiding material information is not Trina’s style.
Unfortunately even though Arvo goes to his house of worship and thinks of himself as a “good person” he isn’t allowed to follow The Golden Rule in business. The law of agency just doesn’t allow that. As an agent, he has to do whatever the seller, Sven Sogge, tells him to do and his duty goes even so far as to try to take any advantage he can of Mr. & Mrs. Brandvold that he legally can including finding out personal motivations that his client Sven could potentially take advantage of. Of course he can’t knowingly break any laws but he knows it’s not his job to be helpful to the buyers. His duty as an agent is to think only about and protect his seller’s interests. In fact he is technically breaking his duty as an agent if he helps the buyers in any way.
While Arvo is doing his best to prevent information getting to the Buyers that might be harmful to his seller’s goal of high price and non-disclosure, Trina is doing her best to see to it that both the buyers and sellers are making their own fully informed decisions by having all the factual information possible.
Trina has been in the business a long time and recognizes the obvious fact that buyers sooner or later become sellers and if those sellers had overpaid as buyers they might have a harder time when it comes time to sell. Or if there was a significant problem they hadn’t known about, they now face having to either spend a lot of money fixing it or taking a loss maybe when they sell. In other words, without proper disclosure, the next time around could become more of a problem but with full disclosure, with both parties being treated equally and fairly as Trina believes should be done, then the future is better for everyone.
Arvo’s approach to the business is that he has been taught and trained that it’s up to the buyers to figure out the problems and value on their own and he rather hopes they won’t find them and will pay top dollar, maybe even more than the property is really worth. Arvo knows that once the buyers have closed on the property, if there are problems that appear afterwards, so long as he didn’t lie about those or intentionally hide them, then it’s the buyers’ problem and he’s on to the next sale.
Arvo, as an agent, follows the rule of “buyer beware”, that it’s up to the buyer to figure out value and find problems. Arvo really hopes the buyers won’t know enough to contact Trina either. He’s much better off if buyers go to him directly and not involve Trina who would be helping her buyers discover all there is to know about the property.
Trina’s approach is that she wants everyone to have the benefit of all the information available. She lives by the Golden Rule, in her life and in her career. Trina, like Trudy, wants everyone to be happy and well served. Trudy the matchmaker was a true facilitator just as Trina is today.
Copyright 2014
Paul Harsch
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