Seattle Real Estate - Acting in my Seller's Best Interest
I had a recent conversation with my seller concerning a potential buyer (a neighbor who was not looking for property) for the newly listed property who expressed some interest in the property just as it was in the process of being listed. A couple of days into the listing period, it looked like the potential buyer may have a real interest in the property, and after talking to the potential buyer (who did not have an agent) on the phone we set up an appointment to show the property to the buyer's spouse when they returned from a trip.
I called my seller to discuss this, and outlined three different possibilities that I could work out with the buyer regarding representation should they decide to make an offer, but that I needed to know how my seller wanted me to handle it, the possible choices were:
1) I could act as a "Dual Agent" and represent both parties, which I told my seller that I would not do, since I would not be acting in his best interests, and the potential buyer is a neighbor of the property and I have done nothing to help this buyer at this point.
2) I could let the buyers know that I represented the sellers alone and would suggest that they either find a agent or if they did not know any, that I could refer them to another agent. If the buyers liked that agent then they could choose to work with that agent. I would not ask for a referral since I had not been working with the buyers.
3) I could let the buyers know that I represented the seller alone, and they could either find an agent to help them with the purchase and sales agreement (#2) or they could have a real estate attorney help them with the purchase and sales agreement, and that the selling office commission (for the buyers agent) could then be split between the seller and the buyer. The seller would pay less in real estate fees, and the buyer could have their half go towards their closing costs. Remember, these buyers have no interest in any other property.
I told my seller that I needed his decision as to what he wanted me to do to act in his best interests should these buyers in fact decide to make an offer. My seller was surprised that I would do this for him! He thought that the third choice would be great and was surprised that I was not trying to "earn" both sides of transaction. I told him that he hired me as his agent to act in his best interests and that is what I intended to do.
Well, to end the story, the "potential" buyers decided before we met for our appointment that really the property wasn't for them afterall and that they would wait a few years to buy something else. My seller was still happy because I made sure he knew what was happening, what his choices were and acted accordingly. It's the Golden Rule; treat others as you would like them to treat you!
Sellers and Buyers, remember your agent is working for you, and should be acting in your best interests!
Sounds like good dilemma!
Next time have the buyer finance their house to buy the other house and then sell their house! No dual agency and a win-win situation! ;-)
I guess it's just me but I don't see why any buyer would want a dual agency. I don't see how a realtor can be loyal to both a seller and buyer.
Deborah:
Bravo! I wish that more agents were like you! I think that one reason the public doesn't see us as professionals is that agents don't act like professionals. You really did represent your seller. I hope that more agents will follow in your footsteps! The buyer has the right to have representation -- and doesn't have a clue about the "procuring cause trap!"
Sellers and Buyers, remember your agent is working for you, and should be acting in your best interests!
This should be on all agent's business cards :-)
In Texas, even if I'm representing the Seller only, if another agent in my company has a buyer that they are representing and that buyer wants to buy the house that my seller has, because all agreements are with the Broker, we are automatically in an intermediary position - the broker is representing both the sellerl and the buyer.
The only way for this not to happen is for us to never show our listings to our buyers, even if that would be in the best interests of both parties, which clearly is unethical, as well. Now, either party can, at the time of signing the listing agreement or the buyer's rep agreement, opt out of intermediary, which means that we would not show our seller's house to any buyer represented by our broker, nor would we show our buyer any of our own listings. We leave the choice to them, rather than making it for them. This is, of course, after explaining what all this means to them upon first meeting, and giving them the state-promulgated sheet that explains it, and having them read both choices that are explained on the listing agreement and buyer's rep agreement - in other words, they're told three times before they make the choice.
It may be more uncomfortable for the agent, but it really is something that should be their choice.
Your situation is a little bit different, though, Deborah, in that you didn't really bring the buyer in question. I thought your post, when I read the first little bit, was going to be about the Seller not wanting to pay you because the buyer showed up while the property was in the process of being listed, rather than you bringing the buyer, even though we all know that the REAL work starts after there's a buyer.
Helpful information, Deborah. Option 3, although it did not occur, was a great suggestion.
I have done dual agency in a couple of situations where both parties were experienced, everyone knew what was going on, and the buyers did not need help to decide on an offering price (in that market, you paid full price or you didn't get the home), and the overall transaction was very smooth, so it worked out. But straddling the fence is tricky and I prefer to not get into that situation, since you cannot truly represent both parties.
You did a great job of letting your seller know the options so he could decide, rather than not presenting any choices. I'd say you have a very happy seller (hopefully the home will sell soon too) and he will be pleased to refer you to others.
Jeff
Practising Dual Agency is like dancing through a minefield. You may get through it most times, but if you step in it once, it's going to blow up and cost you dearly at a discipline hearing or in court.
Consumers have the right to just be a customer and licensees do not have to make a client of every consumer who calls them for information on their client's listing.
Been there, done that dual agency quite a few times before and it worked very well for me. If everyone knows what hat the REALTOR is wearing and agrees with it then it's fine in my opinion. It can be done to remain impartial (to some degree) and get the job done.
Patricia Aulson/Seacoast REALTOR/NH, & ME
Wow! Thanks everyone for all the opinions and support! I wrote this very late last night and was susrprised to see so many comments when I finally got to my computer. That it was featured was also a nice surprise!
I do think every stituation is unique and the needs, knowledge, that each buyer and seller brings to the transaction makes it even more so. I think that every agent should ask themselves the question in circumstances where dual agency may occur whether or not they can act in their primary clients best interests. Afterall that is why the agent is being paid, and if both parties still feel that they are well served if the agent takes care of both sides.
I personally do not think I could ever feel that I did the best I could if I acted as a dual agent, there would always be a nagging thought in my mind that I put my interests above my clients. And I also think that there may be special situations where an agent can help both parties such as Jim's & Maria's.
That is one of the things that makes real estate so fascinating....everyday, every situation, every client, every transaction is different.
I've done dual agency.. but only at the request of both parties.. What I usually do is get another agent to handle the negotiating for the buyer.. as I explain to all parties by bringing in another agent no information can be inadvertently disclosed .. After the contract is signed I will handle the rest of the transaction... I pay the negotiating agent 25% of the fee (which I always reduce if I handle both sides)..it seems to work but the truth is that I would really prefer that everyone had their own agent.
Kaye - that is a great solution too. And I would agree with you that it is better that everyone has their own agent.
Steve Crossland posted a very good article: "Perceived Value of Real Estate Services" very early today that shows how difficlult it can be for some clients to see an agent's value. If an agent is acting as a dual agent, then that increases the risk of one of the parties involved having the perception that they did not get the value they expected and paid for!