It doesn't make sense to take this route - "from a consumer perspective", lets start with the buyer as consumer. Broker agency allows the listing broker to compensate other brokers as sub-agents without passing on liability for errors, omissions, and misrepresentations made by the buyers representative to the seller. It allows the buyer much more recourse in an adverse situation to make claims against his broker, and the listing broker and agent. It only protects the seller to the buyers discontent. With the seller as consumer, the seller is very well protected in an adverse situation not of his own doing. All others involved in the transaction have liability.

I don't offer broker agent compensation for this reason. To insulate the seller and my broker, I only offer buyer agent compensation. With buyer agency, my sellers AND my broker are shielded from the misrepresentations, errors, and omissions made directly by the buyers representative. It doesn't make sense to me as my interpretation of Broker Agency is a modified form of sub-agency. It adds liability. It does not defer liability.

As for dual agency, I make certain to explain to all buyers and sellers how dual agency works with and without designated agents. Dual agency can arise at any moment when working with buyers as a buyer's agent. The only way to avoid dual agency is to refer one party to a competing brokerage when it arises or simply work with only sellers or only buyers period.

Wed Jul 23 2008, 23:03

Thank you- I agree. Broker agency appears to be a broker friendly method, as opposed to a benefit to either buyers or sellers- just wanted to make sure that I wasn't missing anything. I read an article recently in which the author (a real estate expert) appeared to have an equally perplexed reaction to the definition- it's pretty convoluted. It makes things more complicated than they need to be! His comprehension was that it protected the brokers from one another, but not much else.

Mon Apr 28 2008, 20:19

Broker's agency simply was made to protect the homeowner from vicarious liability and most brokerages are only allowing broker's agency and no seller agency. I do not believe that broker or seller agency in the context of the purchasing public is a benefit.


I explain agency in this way:


When I am in an open house and a potential buyer comes in, I tell them that for this house, I represent the home owner and my job is to get the home owner the highest and best price for the home. If they wish to purchase this home through me, this is my job.

I also explain that they are allowed to have an agent work for them. (If they are in my open house, they have to decide if they wish to have an agent represent them) This means that they can receive comparables on the homes in the neighborhood, their interests are confidential, and that my job as their is to get the best price for them.

If they wish to not be represented by their own real estate person, then they should be aware that anything that they say (such as, I am bidding xxx amount for this home, but I will go to xxx amount) can and will be used against them in the court of the homeowner. In order to keep negotiations level, don't let me know what or if you will go higher in price and just give me the offer. This way, I do not have to reveal to the homeowner (which I more than likely have never met) know anything that will skew negotiations on the home.

Buyers usually wish to work with a buyer's agent when they learn that it truly levels the playing field.

Mon Apr 28 2008, 17:23

Thank you. Because each agency relationship is explained to both buyers and sellers at the first substantive contact, the "broker agency" option is quite difficult to explain. How do you advise or not advise it in a way that a consumer can clearly understand? Is it me, or is that "relationship" choice very unclear? Again, thank you for your input.

Tue Apr 22 2008, 08:40

No.This is pretty cut an dry situation.A written agreement that creates an express agency relationship between a seller and a real estate broker is called a listing agreement.When someone claims to be an agent but there is no agreement,the principal may establish an agency by ratification--in other words,by accepting the benifits of the previously unauthorized act.Buyers easily can assume that when they contact a broker to show them property,the broker becomes "their agent". In the end it is a person's actions that control the creation of an agency relationship,not just his or her words.

Tue Apr 22 2008, 08:25