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Ummel Case Juror Suggests "Buyers Agents Suck"

jury seats OK. Those weren't her words.

Read this article from The Voice of San Diego (author, Kelly Bennett) and comment if you like.

Here are a few quotes from the juror:

"After my seven days of realtor training (sitting in a court room), I may consider not using a realtor in my next purchase of property."

and

"I think selling with a realtor is very different than buying with a realtor. I probably would sell a house with a realtor because of the advertising, showing, and negotiations, etc."

And the article's author states in the final line:

"...buyer's agents are not the be-all, end-all in the home-buying transaction, as some market themselves to be."

The fact is that simply assisting a Buyer in a real estate transaction does not make you a true "Buyer's Agent". In fact, in many states, you might not be the Buyer's "Agent" at all.

Many states allow for dual-agency, where the same agent represents both the Seller and the Buyer with reduced representation, or "transaction brokerage" where the brokerage purports to represent neither the Seller or the Buyer in the transaction. Even worse, you could just be the Listing Agent's "customer" with absolutely nobody looking out for your best interest in the transaction.

So, what is a Buyer to do?

There are, in fact, some real estate brokerages that represent Buyer's only. These brokerages take no listings and in fact, will (among other things):

show their clients comparable sales data,
negotiate on the Buyer's behalf and
protect the Buyer's interests throughout the real estate transaction

These brokerages and their agents are called Exclusive Buyer's Agents (EBAs) and many EBAs belong to the National Association of Exclusive Buyer Agents (NAEBA), a trade association that advocates for home buyers and whose members adhere to a Code of Ethics that binds their loyalty to home buyers.

The bottom line is that not all "Buyers Agents" are equal. "Some who market themselves to be" true advocates and representatives for the Buyer, just may actually be what they say.

Buying a home soon? Make sure you get the real deal. Make sure you get an Agent on YOUR side of the transaction!

If you have excellent credit and will be buying a $250,000-$750,000 home in the next 30-60 days and would like an agent who will work exclusively for you, call us at (801) 969-8989 or contact us via the link on this page.

Exclusive Buyer Brokerages do not list homes and never represent Sellers. Their agents represent Buyers ONLY on the Buyer's side of the transaction. They work to get BUYERS the Best Price and Terms when they Buy...

Finally...

Posted by Benjamin Clark - Exclusive BUYER'S AGENT - Certified Negotiation Expert - SLC, UT on 04/17/2008 01:57 PM

Comments (21)

buying a home, salt lake, real estate, buyers agents, court case, ummel, negotiate, comparable sales data, representation, eba, home, buyer, exclusive

Originally posted at: Buying a Home in Salt Lake City, UT: Ummel Case Juror Suggests "Buyers Agents Suck"

This post has been included in Utah Information
Post is included in group: ABR-Accredited Buyer Representatives
Post is included in group: Exclusive Buyer Agents
Post is included in group: Exclusive Buyer's Agents (EBAs)
Post is included in group: Realtors®

21 Comments on Ummel Case Juror Suggests "Buyers Agents Suck"

APR

2008

Benjamin,

I'll break the ice here! I think consumers are confused...they base their opinions on the value of agent representation more on what they 'perceive' than on what is reality! The fact that real estate laws differ from state to state in a mobile society such as ours adds to the confusion...it is unfair to consumers and agents alike to make judgments painted with a broad brush...education, education, education may replace location, location, location as the next real estate mantra!!! JMHO, Thanks, Fran

Interesting how she refers to her time on the jury as "Realtor Training." There are definitely some bad eggs out there, but don't discount us. There are also bad doctors and lawyers too. Doesn't mean you don't use them. You just know how to interview them and find the right one for you.

It goes to show that people that don't understand the full scope of our business should keep their mouths shut and fingers off of their keyboards!

Remember just because you say you are and belong to something that says you are doesn't make you one. I know a company around here that only represents buyers but the agents barely have a clue. I do a much better job then they ever could.

APR

2008

Seven days of Realtor training is probably more than some actual licensees received! Very interesting comments from the juror. As an attorney and a buyer's agent, it is difficult for me to understand the verdict in this case. It is my understanding that California agents still owe their clients fiduciary duties, which include disclosure and reasonable care. Apparently the jury felt that the agent was not responsible to disclose to his clients comparable sales on the same block for less money? Perhaps the properties were not comparable? I am at a loss as to how these sales could not be considered material, and therefore subject to disclosure. Unless someone writes a book about the case, we may never know.

As you correctly point out, Benjamin, a member of the National Association of Exclusive Buyer Agents abides by a Code of Ethics and Standards of Practice which distinguishes them from ordinary Realtors. Exclusive Buyers Agents pledge to represent their buyer clients without the potential for conflicts of interest, and to prepare a comparative market analysis for their client before submitting any offer to purchase. I agree that without any clearly defined standards, either legally or contractually, how is a buyer supposed to know what type of services they can expect to receive?

APR

2008

In the Today Show interview I heard that the agent was in the business for 26 years. Marty Ummel valued the experience but didn't sign a contract with her agent. At the end of the interview she said she wanted to change the industry. She wants disclosure. If she had signed a contract with her agent she could have made sure he was obligated to disclose those things that she said he did not disclose. Experience only helps if the person who has it is actually on your team.

The problem is that the person who sold the Ummels the house was most likely hiding behind the irresponsible concept of "transaction broker" which greatly reduces their liability in any sale. In this day of full disclosure, most "Buyer's Agents" don't understand responsibility to the client, and most don't bother to disclose anything about the value of the house and where it stands based on real estate and investment fundamentals - and what the fundamentals of the local market are. Sounds like you go above and beyond.

Stefan - Thanks for the comment. The truth is, 7 days is a lot of training! In Utah, only 12 hours of continuing education is required every 2 years! My guess is that the Ummels didn't even know there was such a thing as an Exclusive Buyers Agent. I would even suggest that less than 20% of REALTORS even know that such a business model/speacialty exists as practiced by members of NAEBA.

Paul - There is absolutely NOTHING wrong with Ms. Ummel wanting to change the industry regarding disclosure. It is an absolute disgrace that NAR's own legal team suggests that less than 30% of consumers are being disclosed to regarding agency. The rule is already there.

As seen in this case, it becomes a question of compliance with the rules and making the consumer aware of what the rules are. NAR hasn't done a good job of self-policing in the disclosure arena. I hate to even suggest regulation, but if REALTORS(R) won't do it of their own initiative, something will have to be done.

It's a whole lot easier when you always only represent one side of the transaction, isn't it?

Dan - Thanks for the kind words.

We certainly do our best to give Buyers equal representation in the real estate transaction. That means we treat each Buyer as a full-fledged client, with all the rights and fiduciary duties fully intact throughout every transaction.

Most EBAs don't consider what we do to be going "above and beyond", but merely providing the Buyer with what they should be getting from any agent who says they will be that client's Exclusive Buyer's Agent.

The truth, however, as you state, is that many agents today do not consider themselves "agents" or "fiduciaries" but "assistants" or "facilitators". In that sense, we DO go above and beyond what the consumer can expect to receive from those agents who have that mindset.

While they may look for a win-win, we are always looking for our client to come out as best possible.

I don't think the industry is going to change much till more consumers like Mrs Ummel demand that it change. So long as they go into real estate transactions without requiring their so called buyer agent sign a contract agreeing to certain standards of practice such as (but including much more than) disclosure of comparable sales information they will often get what they have contracted for - and that is no real representation. AND, they can't go to court to enforce a contract they don't have in writing (at least in California apparently) no matter what the common law of agency says.

Remember, Mrs Ummel didn't sign a buyer agent agreement.

Paul - It's stories like this that scare people away from signing any agreement with real estate agents.

As you suggest, getting the right kind of agreement signed will actually protect the consumer in the real estate transaction. Still, just as Dan said, there are also Sellers and Buyers out there who DO sign agreements that allow their agents to become "transaction brokers" or "facilitators". Does the client always know exactly what that means? I would say that they do not. Then they have a bad experience because they weren't fully represented, and they tell their friends.

The only way to stop the bad image is for agents to stop the activities that lead to bad experiences.

I can say that I have a positive outlook regarding this as most agents who I have interacted with on ActiveRain appear to be anti-dual agency, at least at the agent level. I think most professionals who take agency seriously give their clients good service and good representation, regardless of their business model.

Ben, I agree that many (maybe even most) agents are anti dual agency at, as you say, the agent level at least. When their company represents the seller though their good intentions can't over come the situation if they end up as a dual agent. I'm not sure why the Ummel story would scare people away from signing an agency agreement with an agent. The Ummels did not sign one. If they had, the outcome might have been different.

Paul - The public doesn't often see more than the headline. In this case it was: Buyer's Agent left Buyer high and dry and the court ruled for the real estate agent. Makes the consumer wary of working with agents. There are some consumers who do read the whole story, but many only see the headlines.

Headlines like:

Neither the headlines nor the stories suggest that had the Ummels signed an agreement with that same agent, things would have been different. As Dan points out, what if the agreement they signed authorized the agent to be a dual agent? What if the agreement they signed said the agent would be their facilitator or transaction broker? If they had signed an agreement like that, this case likely wouldn't have even made it as far as it did.

Signing an agreement alone isn't going to help anyone unless they know what that agreement says, and also know what other choices they have.

No consumer should be persuaded to sign away their right to full representation throughout the entire transaction without being told that that they have another option.

Good points Ben. I think your blog should be required reading for home buyers.

For the record, the Author did a follow-up on the 18th. It seems she had never heard of Exclusive Buyer's Agents before. (Like I was saying... few people have!)

I got a nice mention as well. Check it out: http://www.voiceofsandiego.org/survival/#blurb1

I agree - this should be required reading. I can assure you, in our area, Buyer's Agency is used primarily to lock a client to a Realtor. As Professional Standards chair for our board, I hear story after story - the Realtor won't show me the house I want to see, but they say if I use someone else I have to pay them!

Education is needed - for those who hold real estate licensees and for the public.

Debbie - You are absolutely right. The public definitely needs to know what their choices are, and agents need to be trained and made aware of the benefits of specializing and working exclusively for a "client".

Just as I don't choose to work with every client, I allow clients the choice as to whether or not they want to work with me. I don't want to force anyone into an agreement with me. I want them to know their choices and make an informed decision.

Also, if a prospect doesn't understand what I do for them as an Exclusive Buyer's Agent, and thinks I'm just like the other agents, I usually choose not to work with them.

Fortunately, most of my clients have done a lot of research online and know about Exclusive Buyer Agency and want to hire an agent to represent them and them only in their home purchase.

APR

2008

In Michigan, we can fill the dual role position although I do love working with the buyers. There is something to be said when you know you have them the right home. It's great that your brokerage works with just buyers... hopefully, you can get people to understand the importance of being represented. Most buyers want to "do things on their own" and think they know enough thanks to the internet. As a buyer's agent, (like a seller's agent) we are looking out for their best interest and want to make sure that they are taken care of.

MAY

2008

I think Forest Gump's Mother hit it on the head when she said "Stupid is as stupid does".

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