So, I get a call the other day on one of my listings. The gentleman had seen my listing online, had seen the pictures and loved the property. Having seen the listing online (as opposed to a sign call) he had access to the following information :school district, number of beds and baths, home owners association amount, amenities of the complex, etc... The first words out of his mouth were " I WANT TO SEE THIS HOME ASAP!" and then "I AM PREQUALIFIED".... fantastic right? Well.........
So, we make an appointment to meet at the property the next day (Sunday) at 3pm. 12:58 rolls around, I woke up a bit early that day to take care of prior obligations before the appointment. 12:59 Just finished my work out and about to jump in the shower. 1:00pm and the phone is ringing , its the gentleman with the 3pm appointment. He DID NOT notice that the home is a 2 bedroom, he needs a three bedroom. The home owners association is a bit higher than he wanted to pay, he would like to cancel the appointment. OK, I understand.
I begin to ask him what he is looking for in a home, and he cut me off quite abruptly. Do you have any more listings in the three bedroom range? I want to save money and buy directly through the listing agent! Naturally I ask " and how would you save money by doing that? " Well, the agent will cut his commission and the proceeds will go toward my purchase price. Sounds good on paper doesn't it? I wasn't interested in wasting any more time so I wished him luck and bid him adieu.
1.First and foremost, Realtors are bound by something called "agency", this concept states that a person is authorized to act on behalf of a client to buy or sell real estate. Then we have "dual agency" , the definition of which is " a real estate agent representing both buyer and seller, The agent has promised a duty of confidentiality, full disclosure, and loyalty to BOTH PARTIES, the agent will deal with both parties impartially, agent will not disclose either parties 'bottom end' in regards to price, agent will not disclose motivation or personal information to either party impartially."
2.fiduciary duty- this is the legal duty of an agent to care for another persons finances/ and or assets. A fiduciary duty is considered to be one of the highest duties under law.
Do you see where a realtor might have an issue fulfilling these obligations to the highest extent possible when involved in a dual agency transaction? The two areas of concern are FULL DISCLOSURE and CONFIDENTIALITY.
How can an agent fully disclose all information....when he can't? The job of a buyers agent is to find out any pertinent information relating to the transaction, like : is this an equity sale, does the home owner have a dual mortgage because he purchased a home out of state, will the home owner break even if he sells at "x", but take a loss if he sells at "y", did a family member pass away and the homeowner needs to move asap? The answers to these questions might affect the price one will offer on a property.
The job of the listing agent (is/ should be unless otherwise stated) to get the homeowner the highest price possible in the shortest time possible. To facilitate a transaction as smoothly as possible, and negotiate the least amount of concessions possible. To help the seller achieve their goals!
In this dream world scenario the listing agent agrees to cut his commission, and the difference is credit toward the purchase price of the home. What about repairs? request for closing costs? is the home buyer running comps on the home? Is the list price inflated 5-10% over market value? Is it in the best interest of the buyer to drop their contingencies at this stage in the transaction? Well the listing agent / buyers agent thinks you should.
Food for thought
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