I understand this is a very controversial issue. I have had some very interesting agency debates with other Realtors. Not because I expect to change the minds of others. It's just a very thought provoking topic to discuss. There is no one correct point of view. There are flaws in the laws, and the laws vary greatly from state to state.
I have to tell you I am in a state where the choices are Single Agency, Sub Agency, Limited Consensual Dual Agency and Transaction Broker. My company does not offer Sub Agency and my agents do not act as Sub Agents for other companies. We list properties, so we act as a Single Agent for sellers. I do not agree with our state laws concerning Limited Consensual Dual Agency, so I discourage Buyer Agency because I do not want our sellers to get into a Limited Consensual Dual Agency position. So we always represent our sellers and we work as Transaction Brokers for buyers. There are no Single Agency Buyer's Agents in our area. Anyone who signs a Buyer's Agency agreement with an agent in our area is always running the risk of finding themselves in a Limited Consensual Dual Agency position. I believe buyers need information not representation. Many disagree with that. It seems a lot like a political debate to me so only the minds of the undecided are likely to be changed on this issue.
Regardless I know that at my company we are highly trained, highly ethical, excellent Transaction Brokers. I know we do as good a better job or a better job than Buyer's Agents in our area.
An associate broker in my office showed a couple one of her listings this week. She, of course, explained that she was representing the seller, but could work with them as a transaction broker. Then she went on to explain agency in the State of Alabama. She is a very good Realtor, always very methodical and thorough. The couple told her they wanted to write an offer. She gave them our buyer's acknowledgement and buyer's disclosure to read. Alabama is a "buyer beware" state. The only required disclosure is the Federal Lead Based Paint Disclosure, so we have buyer's disclosures to explain to the buyer their responsibilities. She then wrote the offer they instructed her to write. When they told her that they were financing with a FHA loan she explained that since the property was on well water, but public water was available, it was a very good chance that a loan requirement would be that the property would have to be connected to public water.
She presented the offer to the sellers. The sellers are long time clients of this associate broker. She cut her commission drastically so that the sellers could counter at really good price and terms. She made an appointment for the buyers to come in and go over the counter. The next phone call she received was from another local Realtor. She was told that they buyers had decided that they were being pushed and they wanted representation. You may say, what's wrong with that?
First, this particular Realtor is the least pushy sales associate I have. If her friends even know that she is a Realtor I doubt she ever reminds them. Her buyers either come from her listings or they are repeat and referral. She gets her business because clients and customers are always impressed with how professional she is and they refer people to her. It sounds impossible but she does absolutely no prospecting.
Next, the buyers didn't get a better Realtor. The buyers are now represented by an agent that is less knowledgeable. Their buyer's agent has never even been to the property. The new offer didn't address the water issue and had some other terms that FHA usually does not allow. If this contract works out the buyer's agent will learn a lot from my agent, which is great for her, but does not help the buyer.
Last, but certainly not least, now if the buyer wants the house the buyer is going to have to pay more. This, of course, is not always the case when using a buyer's agent, but it is on this property, in this case. Not because there was an agreement that the listing agent would take less if she sold it herself. In the course of trying to make this work for her sellers my agent had cut the commission. Now my agent cannot cut the commission because we have a co-op to pay. The sellers think the buyers are foolish and they are countering higher. As is often the case what was best for the sellers, with the first offer, was also best for the buyers.
By the way, our market is not bad right now and this listing is priced properly. It will sell. The only person that stands to lose in this transaction is the buyer. I believe when the buyer thinks they need representation then they should have representation, so we would never cry "procuring cause." I understand there are situations where buyer representation actually could work to the benefit of the buyer. Unfortunately I also know, at least in my area, buyers are usually not getting anything beneficial in their representation. I am mainly venting out of frustration. This is not a situation where there is a solution. I just like to present another very real side of a controversial issue.
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