Double talk and mixed messages about how agents choose to show or not show properties.

Asked by Brandy, Florida Thu Jul 26, 2007

In other Trulia posts, I read that agents HAVE to show any and all property if it matches the buyers wants and needs because the rules & laws both say so. Then, as a seller, I should not need to pay more than $100 to buyer agent. I also read that a lot of agents show property only if it pays them enough. Aren't they breaking the rules & laws? Not enough room to explain. See comments below.

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Brandy, Both Buyer And Seller, Florida
Thu Jul 26, 2007
I don’t really want to pay you $100 for find a buyer, but your posts actually give me reason to consider that path. The real estate system is conflicted and your rules make no sense. Whoever wrote those rules and laws thought price fix was forever. Some of the rules you explain were only valid when the real estate world was 6% across the board. Now, some of you on Trulia made a point to say that you don’t show property if it does not pay you enough to bring your buyer How is this not illegal if you have legal obligations duty and fiduciary to your buyer? How can any association guideline justify ignoring fiduciary laws of duty? If I am the poor idiot who blindly trusted that you were taking care of me, but you threw out houses because you didn’t like the other agent (Trulia post) or the pay was low (Trulia post), and pushed a crappy house because if had fat pay, how is THAT taking care of the BUYER? And, you wonder why people don’t trust you and think poorly of you as a group? YOU tell the public that a higher pay to the buyer agent will create an incentive. Why do I as a seller NEED to provide an incentive to get you to do what you are supposed to do (protect your buyers) according to the LAW and your RULES? So, in other words, your laws and rules mean nothing to you? Is that what you are saying? Summary: Rules and laws say buyer comes first. In reality, agents have no respect for rules and laws, and do not follow them.

Using ONLY information that you guys wrote in Trulia, I could list for flat fee for $400 and offer the buyer agent pay of $100, and be successful at selling my home. YOU led me to this conclusion from reading YOUR posts.

You told me that I shouldn’t list FSBO because 90% of buyers are working with agents. I am happy to gamble with 90% of the public for a low cost of $400. OK, I won’t get other advertising, but that’s OK, because I should get to 90% of the public through their agents. Those agents have a duty to show my house if it matches the buyers wants. If agents already told me my house is worth 800, I can put it up for 780, and still be ahead because I did not pay a big commission. It was YOU guys who told me PRICE PRICE PRICE. I know that buyers surf the net. My house WILL be on the internet, I don’t need print ads (Trulia posts) and the buyer agents will point out my home if it matches their buyer. If you tell me that I NEED you to look out for ME as a seller, I am HIGHLY skeptical. It has already been made very clear that you put YOUR needs ahead of mine on the buyer side. Trust has already been eroded, and difficult to ever regain. If anything, from your posts, I learned not to leave it in the hands of an agent and that I need to carefully watch. That being said, I may opt to flat fee list my house.

Before all of you scream at me and give me 10 thumbs down, I want you to know that I don’t really think any of you could earn a living at the above rates of pay, and I do not really intend to pay someone $100. Your rules would LOGICALLY tell me that I should. My conscious would prohibit that. I wanted you to see from an outside view what your posts told the public about your rules, your laws and how you work. I just summarized what you guys said as a group, over and over again in Trulia. Perhaps those who make the rules and laws need to take a look at what is going on in the industry, make rules and law that make sense for YOU and the PUBLIC, then enforce the rules and laws that make sense. Many of YOU are quoting rules that worked in a controlled price environment but does NOT work in a free market system. But, you can’t leave innocent buyers out there THINKING that you are looking out for them FIRST, when you are NOT.
3 votes
J Lo, Home Buyer, California Glory, Brentwood, CA
Thu Jul 26, 2007
Dearest Brandy:
You sound so frustrated and in so many ways I feel your pain! It really doesn't need to be this complicated. The only double talk is when we start talking about "standards of care".

We as agents have the Law of Agency duty to our clients (a client is someone who has signed a contract with us for a service). The following is our duty:

Care, Obedience, Loyalty, Disclosure, Accountability, and Confidentiality.

We must take care to listen to our clients needs and wants.

We must be obedient to those tasks they have set for us & not place our needs above theirs.

We must be loyal & only perform tasks that are in their best interest

We must disclose to our clients all information we have pertinent to the material facts in any transaction

We must be accountable to them when our actions affect the outcome of their desired transaction

We must protect any information they provide to us in confidence.

Now, what is my duty to you the seller? Nada.

If your home has the attributes my buyers are looking for - I will not stop them from seeing your property. If you are a FSBO; I will contact you first and obtain an agreement with you on terms acceptable to both of us for showing your home as a potential purchase for my clients. (This in theory will protect me from a FSBO Seller who might try to lure away my buyers with a side bar agreement - this happens and agents get left out in the cold for their services).

If you choose to pay me $100 for this transaction, I will then go to my clients and advise them that you will not be paying the contracted amount of xx% we (my buyers and I) agreed to when they contracted with me to represent them. Therefore, whatever the difference of xx% is - my clients will be obligated to pay directly to me if they purchase your home.

Now - the ball is in my buyers court - they will see your home - because I was the procuring cause for them to be there at your doorstep; THEY will decide if they want the house bad enough to pay me the remaining commission or go on to another home where the seller is paying all the commission.

It's that simple - you see?

Typically; the seller pays the commission to the buyer's agent. Buyers feel much more comfortable dealing with an agent; because of the very duty the agent has to them.

You won't find many brokers out there trying to get my buyers from me - if they thought there was a chance they wouldn't get paid for their services. But there are other's who will tell you that you shouldn't be paying anyone's agent.... isn't that the true contradiction?

This is the single largest transaction of your life - buying or selling - a home. Why is there so much conversation going on when it comes to paying the personnel that are responsible for bringing buyer and seller to the table?

Individual agency's set their own commission rates. Due to the Anti-Trust laws - agencies are very careful not to quote "standard" prices - there is no such thing. All things are negotiable. But even the discount stores have a limit on what they can or cannot charge.

If you go into a jewelry store and want to buy a high end watch - but try to haggle the price down - that merchant will tell you they are unable to sell below a certain price. If they are found conducting this type of transaction - the high end watchmaker will pull their product - because it diminishes the quality of their name...

While this simplistic - we as agents have expenses we must cover and at the end of the day - your $100 commission to me just became $30 - and I have yet to pay my insurance, my gas, my MLS fees, or my time.... (there's more - but this is long enough, don't you think?)
1 vote
Melissa Manc…, Agent, Plainville, MA
Thu Jul 26, 2007
HI Brandy,

I understand all of your frustrations and concerns. I can’t speak for other agents when I say this, only myself. When a buyer(s) hires me to represent them in a real estate transaction they have many different options. First and foremost, one of the things that we review together is the kind of services that I will provide and what my “success fee” is for providing them. Because of the anti-trust laws; I am unable to give specifics in this forum, so for the sake of this conversation let’s say my success fee is 3 apples. Initially, we try to obtain that fee from the seller (through MLS), but if a seller is not offering that compensation, a buyer(s) is responsible for making up the difference (and paying the entire amount themselves if it is a FSBO). At the time the contract is reviewed and signed, the buyer(s) usually opt to not look at homes that are FSBO”s or homes in the MLS that do not offer the 3 apples, thus contractually binding me to exclude these homes from my obligations, as this would be an added expense for them to incur. I hope this makes sense to you and puts a little bit of faith back into this industry, as the buyers are given options and they are the ones that make this choice. I do know that some agents don’t conduct their business in this manner, and practice just as you say in your post, but there are some of us that follow our strict code of ethics and fiduciary responsibilities to our clients. Shame on you that don’t.

Melissa Mancini, Realtor, CBR, GRI
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1 vote
Julie Snyder, Agent, Yardley, PA
Thu Jul 26, 2007
Hi Brandy,

As in any profession there are good, professional agents and those who are in it to make a quick buck. To represent my buyers in the best way possible, I tell them up front that I will show them all properties that meet their criteria. You are correct...that is my duty. However, I ask buyers to sign a buyer agency agreement. In Pennsylvania you don't have an "agency" agreement unless there is a buyer agency
contract. That said, I tell buyers up front that I will not accept less than a 2.5% commission. If there is a property that meets their criteria I will send it to them with a note that the commission is sub-standard. It is then their choice if they want to see the property and pay me the commission. Bottom line...99% of the time they don't want to see the property!

I understand your frustration with the myriad of answers but I get frustrated with the public's perception that we don't earn our money. Would you expect an accountant or an attorney or any other professional for that matter to work for free? We often work for free when buyers look at houses for months and months and then circumstances dictate that they don't buy anything. I'm not complaining, just letting you know that we take a chance when we spend months of time with someone and are not compensated for our time. The only way that this can work is when we are compensated fairly for the job that we do.

Good luck with the sale of your home.
1 vote
Jim Walker, Agent, Carmichael, CA
Thu Jul 26, 2007
Don, In response to your direct email to me, I am responding in the forum. I am a Realtor in California, I am not familiar with the market in Florida. So, I can not give you specific dollar amount pricing for your house in Florida. I was speaking of general economic principles of real estate supply and demand. Though your agent is from the next town over she should be able to pinpoint a price that is low enough to generate excitement amongst the small pool of potential buyers. My experience in California is that a discount of 5% from ACTUAL market value - is enough to create a buzz along with some advertiisng and agent incentives. See my question posted "cost, price, and value" similar terms wiht vastly different meanings.
As far as the fiduciary duty to the buyer to show everything that matches their needs go - every situation is different. The most common is Ken's example of 7000 listings that potentially meet the buyers criteria. One of our jobs is then to winnow down the plethora of offerings to bring our clients to see. Often there are still scores of properties left after all the computerized paring down has been done. Reading through a hundred listings to find three or four to show durning the clients two hours that they have set aside to look requires a lot of skill and judgement. - See my post - How do agents sort through all those listings to find 3 or 4 to show. - one of the may winnowing criteria I use is to guess the sellers level of motivation to sell from the MLS data and write up.- One of the many indicators could be that a seller who is offering one raisin is not as motivated to sell as a seller offering three apples!
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0 votes
M. Tektura, Home Seller, Florida
Thu Jul 26, 2007
Since I originally posted the question about whether agents intentionally avoid houses, I'd like to follow up. I'm sorry if I got anyone's knickers in a twist. Many of the answers were very, very informative. It really didn't occur to me that you'd skip houses based on the commission. I've always resigned myself to the 3-3 "apple" split and sucked it up. I guess it makes sense to skip low margin houses when your time is limited and prices are dropping. Of course, I'm offering the buyer agent 3 apples, so they shouldn't be complaining. Are there other incentives that would draw in the buyer agent? A $500 bonus or how about a big screen tv? Do I also have to sell the agent as well as the buyer?

The most telling comment, however, was about avoiding difficult listing agents. This is the one I wondered about the most and really didn't expect a comment on. I have a wonderful listing agent, but she has a small agency and it's located in an adjoining town. I've felt on several occassions that she and our house was being "shunned" because our agent wasn't in the local clique. At both of our agent opens, she was not treated with as much professional respect as I would have expected. She also has a mortgage brokerage and expanded into RE when the market was growing. She is very capable and very knowledgeable in marketing and financing, so it's not like she's a bungler. I'm disturbed by the notion that my house may not be getting fair exposure because of my choice of "outsider" agent. I hope this is not the case, but REs are human too, so anything is possible I guess.

I can understand the reluctance of any buyer agent to show a 'no-commission" FSBO, but if the home is offered by another agency with a fair commission, I think it should be shown to the buyer.

Thanks again to you all for the very candid and helpful answers. I appreciate your honesty.
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Brandy, Both Buyer And Seller, Florida
Thu Jul 26, 2007
The explanation that Julie provided was ethical, honest and I respect her willingness to place a value upon herself. Irina and Melissa followed with similar responses. I don’t believe that MOST buyer agents discuss their policy for choosing properties with buyers. They simply take buyers around and show properties that pay enough and omit those that do not. Agents were previously guaranteed their income per property by a system that was price fixed, and never had a reason to discuss buyer agency fees. Now, agents don’t know how to talk about this. There are several posts on Trulia and elsewhere that state using a buyer agent is free. That is only true if the agent WOULD work for $100. I am not really suggesting that you work for $100. You have laws and rules that were written for an industry with price inflexibility (all was 6% not that along ago) and an industry that had protected information. Applying the same in a free market with open information fails.

Ken, I understand that buyer agents cannot show 7000 properties. What I addressed is the fact that agents omit properties that are a perfect or near perfect match intentionally and solely based on the agent’s concern with not being paid enough and they don't tell their trusting buyers that they have made these omissions. That is both unethical and a legal violation of duty and fiduciary. Anti-trust laws do not prohibit a company from establishing a set of fees or publishing their standard fees to the public. Anti-trust laws prohibit competitors from JOINTLY setting fees as industry minimums and standards. Sharing fee information behind closed doors between members of the same industry may be construed as an attempt to price fix. If publicly declaring a fee or price was an anti-trust violation, why and how do we have public ads with prices for autos, clothes, furniture, dental exams, flat fee divorce attorneys, etc.? It would be in the public’s interest if every agent published their fees and services on their website. It is also legal.
0 votes
Irina Netcha…, Agent, San Marino, CA
Thu Jul 26, 2007
Hi Brandy,

I understand your confusion and frustration. I will show my buyers any property that I know meets their criteria. If the commission oferred by the seller is lower than what I would expect, I will advise the buyer and ask them to pay the difference. Buyers then make the decision as to whether or not to see the house given that the price will automatically be higher for them.

In my experience, buyers are not willing to try to track down anohter agent that would accept a minimal flat commission because they understand that they will not be represented well.

So bottom line is, the seller is only hurting themselves by oferring a minimal flat fee commission. I can not imagine any professional, experienced real estate consultant will work for $100 and open themselves to potential liability of representing the sale.

Hope this did not confuse the issue further.

Good question by the way.

0 votes
Ken Pujdak,…, , Greenville, SC
Thu Jul 26, 2007

My suggestion to you is to take a course in real estate, maybe even sit for the real estate exam in your state. Then you will know what agents are supposed to know about the laws and ethics regarding real estate. Email me at and I will be glad to email you back the public agency disclosure brochure we use in SC. SC is fairly consistant with other states as to real estate law.

I will tell you that agents are not "required" to show any property they deem outside the scope of their clients request, nor are they "required" to show ALL properties. For some buyers, they are so vague about what they want, we would have to show them all 7000 listings in our local MLS! That would be absurb, but in compliance with the laws you presume to exist.

BTW any agent who quotes you a fee in a public formum such as Trulia is in danger of violating the Sherman Anti-Trust Act. There is NO STANDARD FEE. Each Broker may set the fee for its hired agents, but may not communicate such to other brokers. Real Estate Boards across the country take Price Fixing very seriously, including fines, penalties, loss of licensure and criminal prosecution.
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