Real Estate Agent/Builder--Conflict of Interest???

Asked by Diane Glander, Spring Lake, NJ Thu Sep 6, 2007

Does anyone else have a problem with an agent also being a builder? Do you think one can be objective and show homes that compete with your listings/construction when you have a financial interest in the ones you build? I wonder what the ethics police think of that one?

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Paul Slaybau…, Agent, Scottsdale, AZ
Thu Sep 6, 2007
There's no inherent conflict of interest there. That would be virtually the same thing as saying a listing agent should never have more than one property listed at a time because he/she would be conflicted over which one to promote to a particular buyer. More to the point, it's not much different from an agent having his/her personal residence for sale. Should he/she not list any other properties at the time because of the vested interest in getting the property with personal attachment sold first? The properties would have to be highly similar to create a situation where they are competing for the same buyer. While some might see such a situation as a potential conflict, I see it as an opportunity. The more buyers I have calling on my various properties, the higher the likelihood of one of my listings fitting their needs. Even if it is not the one about which they initially inquired.
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J Lo, Home Buyer, California Glory, Brentwood, CA
Thu Sep 6, 2007
I personally kow a builder who doubles as his own agent. He has brought forth consumer friendly home - just by understanding what today's buyers are in-tune to.

I have met other builders who create "their" version of the ideal home. Sometimes this doesn't mesh.
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Pam Winterba…, Agent, Danville, VA
Thu Sep 6, 2007

Good question and I can see the potential for a conflict. If you are the buildier/owner/agent it seems that it would be very difficult not to be emotional and I can see one loosing their objectivity.

I would prefer to be represented to take my emotions out of the piciture. In some of my own investments I have allowed myself to be represented by another Realtor so the best interests were taken car of.

As to the ethics.....disclose, disclose, disclose.
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Brad.smith, Home Buyer, Taylorsville, KY
Thu Jul 9, 2015
How can Paul, the agent from Scottsdale have the best answer. Absolutely absurd. It is total inappropriate to say that there is no conflict. The circumstances must be considered on a case by case situation. Of course this represents the potential for a conflict of interest.

Wow! Still shaking my head at how this con be the best answer!
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Jsmithcr, Home Buyer, San Jose, CA
Mon Jun 15, 2015
Absolutely a conflict of interest. It isn't like others here have described, it is the situation where the real estate agent (aka as a builder) is in competition with his/her client! Can't you just see a realtor whispering in the person looking at your home's ear "hey, we can build you the same thing for a lot less".
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Elizabeth Sc…, Agent, North Conway, NH
Tue Dec 16, 2014
This is where the Code of Ethics come in. As a REALTOR myself I pride on doing the right thing for my customers, clients & myself. Unfortunately not all abide by the code the way it should be. It is one of those situations where you hope that they are showing all of the properties that meet the buyers search criteria and not just steering them to the ones they have a financial interst in. Keep track if you can.
Hope this helps.
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Eve, Renter, Brighton, Boston, MA
Sat May 18, 2013
The Ethics police are watching and eventually will blow the whistle. Help it happen sooner rather than later. Talk to your friends, spread it around and raise awareness before it is too late for many., one of which might be you. Also do your homework, find out about your agent ahead of time!
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Dallas Texas, Agent, Dallas, TN
Sun Jul 24, 2011
I don't see a problem same as a listing agent representing properties for sale direct clients 1st to their listings then other Realtors properties
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Lawrence Gra…, , Fairfax County, VA
Sun Jul 24, 2011
Are you KIDDING Me?? What ethics problem is violated with providing an additional service to the investor?
Some of us prepare ourselves with knowlege such as CPA CCIM. And YES, PASSING the General Contractor Licensing Exam. Being able to build and develop properties is not only correct but paramount to our real estate industry.WISE UP!!!
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Jennifer Mon…, Agent, Charlotte, NC
Thu Sep 6, 2007
I don't have a problem with this at all because agents who are builders (or who represent one) are representing a product they know about. They will make money if they are successful in selling it - as in any other type of transaction.

The problem for me comes with dual agency. If they represent the buyer as well, they're subject to the same potential legal snares as in any other dual agency transaction. The legal problems that can arise from such a sale are considerably more complex. I would question the wisdom of any agent willing to engage in such a questionable transaction.

Great question Diane!

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