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Houses vs cars ... what's the difference?

I've been going to ask this question ever since I joined AR in '06. After reading Laurie Mindnich's post on dual agency, I decided to finally ask my question.

First let me explain that I follow the Ohio law that says we need to go over the subject (and get the brochure signed) prior to opening doors or discussing financing with the buyer. When I receive a request to view one of my listings, I ask the buyer if they've viewed homes with any other agents. I've found that gets me the answer I'm looking for rather than "are you working or represented by another agent". In their minds, they may not have committed to an agent, so they answer 'No" when asked if they're working with another agent. If they say they've viewed homes with other agents, then I know how to proceed.

Back to my question. I've not understood why Realtors® must go through explaining "who we work for". If a buyer calls me to see one of my listings, the buyer already knows I'm working with the seller. Do they really need a pamphlet to tell them the obvious?

Consider how insurance agents work. I have my car insurance with State Farm and my agent's name is Al. If someone crashes into the WEENR-mobile, does Al have to have me sign a form explaining that the situation might arise that State Farm would be a dual agency? Or that Al might also represent the stupid person who hit the WEENR-mobile?

I haven't had a car accident since getting into the business 10 years ago, so it's possible that insurance agents do have such forms. I'm not sure. Car accidents can get quite pricey, and with medical bills, can easily run into the same dollar value as homes. (We'll have to ask Jay Thompson about that.)

Perhaps insurance agents ARE required to do something similar to our Agency Disclosure. But, if they aren't, then why not? I'd like to know that Al is looking out for me more so than his stupid client. I'd also like to know that State Farm will be representing me and paying MY bills rather than favoring their other stupid client who hit me. What if I should decide to take the "hit-ee" to court ... whose side will Al or State Farm be on?

Oh, excuse, me ... stupid question ... State Farm would be representing State Farm! DUH!

Could/would someone explain to me the difference for Realtors® versus the car insurance companies?

P.S.: I often use car insurance as a way to explain dual agency. For some reason, it helps people understand the issue better. They "get it" with cars ... they don't "get it" with houses.

Posted by Elaine Reese, REALTOR® in central Ohio on 07/20/2008 01:43 AM

Comments (11)

central ohio, buyers, clients, my listings, olentangy living, realtors

11 Comments on Houses vs cars ... what's the difference?

JUL

2008

I agree, also the mere fact that we have to bring it to their attention makes some clients think there is a problem.

It amazes me that how buyers dont what realtors they will go talk to the listing agent. I remind these buyers if something should happen who represent them in the matter?

I ask the buyer if they've viewed homes with any other agents.

I like that question, Elaine. I do believe that they would understand it better. We have to disclose in MI before we meet with them, because some agents don't, you sound more professional and we pick them up.

Most new buyers their eyes glaze over, they have not a clue what you're talking about.

Lisa: I agree with your comment. I can see it in their eyes or the way they cock their head. They're wondering 'why' it's needed.

Lynn, not sure I understand your comment.

Missy: I switched to asking the question in that way soon after I got into the business ... AND there was a noticable change to the response I received. Buyers who call several listing agents to see homes, as we know, don't think they're "working" with an agent. But if you ask if they VIEWED homes with another agent, frequently they'll say "yeah, we've looked at 5 homes in this area." The most amazing thing is how few agents have covered Agency with those buyers. And of course, those agents have no idea as to whether the buyer is qualified to even purchase the home. Not having agency or pre-qual out of the way, can be a complete waste of my seller's time and effort to get ready for the showing.

Elaine - I like the way you query buyers about seeing homes with other agents, or not. I think some buyers are sort of embarassed to acknowledge they might be "working" with someone else if they are talking with me but it's easier to say they has alrady seen homes. Only other way they could have is to go to open houses.

Jeff

Jeff, I've just found that asking about VIEWING is much more informal to start with. It's amazing how they "spill the beans" and sometimes list all the homes they've seen. Then I can probe as to whether it was just an open house or perhaps a new build. If I find out that it truly is a resale home that would have required an agent to open the door, then I probe some more to see what that "relationship" is. Then I go the next step to see if any papers were signed. It's like baby-steps rather than whipping the whole thing on them upfront in the first sentence.

AUG

2008

Elaine, thanks for the mention. My biggest concern about not clarifying for consumers that pesky dual agency is exactly your point: people don't get it, until the transaction ends. Why leave it to chance- as a listing agent, if the aspect of "fairness" is adhered to, isn't it being fair to let a prospective buyer know up front that the transaction will offer no representation, but that option is available? Interestingly, some people don't care- our position is that if they understand what is available, and aren't interested, their offer is welcomed, as we continue to represent the seller ONLY. No reason to compromise that agreement in favor of dual agency. Explaining agency up front will either have them returning to their agent of choice, finding another agent, or making the purchase with the only agent that bothered to look out for their interests by offering choices, and NOT DISCLOSING to us information that is harmful to them. But then, I've never been much for tightropes- even with a safety net. I like solid ground.

Laurie, my point is not to do away with the disclosure for real estate agents, but rather to ask why that type of disclosure doesn't extend to other industries - like car insurance - where it would be nice to know who the contact person is really working for.

YOu nailed it with

Oh, excuse, me ... stupid question ... State Farm would be representing State Farm! DUH!

Your agent represents there finanical interest period. If they represent the other side they are just double dipping on the deal.

Thanks, Elaine- and I wish that there were an answer!

Scott: You're so right! That's why I think they should have to go through the same type of disclosure that real estate agents do.

Laurie: Aw, shucks! I was hoping you had an answer. :-)

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