Profile picture for SoCal Engr

What does it say about REA ethics if...

Just a thought...

What does it say (or imply) about REA ethics if one of the strongest arguments REAs can make to consumers for signing a buyer agency agreement is "otherwise, you have no guarantee that I'll be working in your best interests"?

Realize that is not the intended message, but...
  • September 24 2010 - Black Mountain Ranch
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Answers (16)

If you need a written agreement with your buyer then you need to leave the room, the two of you are not meant for each other.  Good agents have a feel for what I refer to as "broker w-----s", remember the business has some sketchy people on both sides, agents and buyers alike. Call me a cynic if you like but it is still a rug bazaar out there at times! 
  • September 28 2010
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"otherwise I'll have to work with you as a subagent for the Seller", maybe?
  • September 26 2010
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Profile picture for hpvanc
My answer to the original question Socal, is that an agent that uses the phrase "otherwise, you have no guarantee that I'll be working in your best interests" is nothing but a salesperson, and is incapable of representing the best interest of either a buyer or a seller. 

I have weighed in many times, that another key component to finding a true buyers agent is that the agent cannot accept payment for services in the form of commission from the seller. 

You, Socal pointed out in another thread, that a system where you have to pay to shop will not work.  I have to agree with that, however I wonder, if the buyer shopping at least for the 1st viewing should not be the responsibility of the seller or sellers agent, and an expense to the seller.  The problem is that this seems to give the sellers agent procuring cause on the buyers commission as well, making it difficult to get legitimate representation after the 1st viewing.  You also made a point in that previous thread that a buyer should not have to pay to make an offer, and I'm not sure I would agree with that.  I don't know the answer, but I will spare you my commission rant for the moment.
  • September 25 2010
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Profile picture for Blue Nile
I actually think that any REA that insists on a client signing an agreement for 3 months or more with no "exit clause" for the client is shooting themselves in the foot!  So, the potential buyer is not satisfied with the service; even goes to the broker and complains with no resolution.  So, the potential buyer works the agent like crazy, looking at 40 houses, making ridiculous offers, or no offers at all, always asking for more CMA's, and more county records and more building department records, always changing their mind on the search criterion, and asking for new E-mail lists and brochures and on line multiples access and browsing of the printed Multiples books; and then shortly before the end of the signed contract period, tells the Agent, they are sorry, but they have changed their mind; they will not be buying but will continue to rent.

Who cares if the contract states that if they buy something else within a year through another agent that the REA still gets a commission?  The agent is out all that time and effort and money, and the buyer will just wait it out.

Anyone "insisting" on such a contract is "asking" for that kind of client.  If state law mandates a contract, or the broker has a standard policy, or the REA's insurance company requires something in writing, that is different, and they should just say so up front.  Just make sure the buyer knows how to terminate the contract if it is not working out, and how to express their needs if expectations are not being met.

If the agent is doing what the client wants, and the client is getting a recognized value from the agent and is happy with the relationship, the buyer is not walking away in the first place even if there is no written contract.

So, it seems to me that it is just a question of what kind of clients an REA wants.

  • September 25 2010
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Profile picture for sunnyview
I do not have a problem with spelling out responsibilities in a contract at all. I do have a problem with the representations that many agents make about the contract they ask you to sign. All promises made verbally are unenforceable and then once the client signs they are stuck with what is on the paper. Period. I have seen clients listen to the agent and sign the paper that says something different too many times.

A buyers agency contract should have specific performance involved or there is no benefit for the buyer signing it. As a buyer, it should afford me protections and not just demand my performance. I like the idea discussed by some agents that allow both sides to cancel with reasonable notice. I believe that one agent Chutta has his clients sign a dated agreement that expires at the end of the day (or week) and only includes property that he has shown the client. I think both types of agreement are very fair and protect both client and agent.

I just can't go with the "standard" 6 month agreement that is one sided. I want to be a good client, but I do not want to be an unwilling hostage to an agent that is not working out. There has to be a balance.
  • September 25 2010
  • 5Yes

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Profile picture for broker_GRI
These types of question exemplify the best of what Zillow forums can be.

So often times in the course of doing business people simply do things by habit and if asked why things are done that way the answer will often be...
Because that's the way it's always been done.

Sometimes taking a step back and questioning "the way it's always been done" is the best way to make room for a better way for things to be done.


All too often we agents can get into the pitfall of defending our "position" instead of listening and finding ways to improve upon our services.
  • September 25 2010
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Profile picture for SoCal Engr
This may sound counter-intuitive, but...

Personally, I like the concept of a buyer agency agreement. The thought that a consumer is going to engage someone to help with one of their biggest financial decisions on nothing more than a smile-and-a-handshake doesn't make me feel all too good, though I've also done it.

A written agreement outlining services provided, agent and buyer expectations, specific conditions, etc. is a good idea. And, if I were a RE organization, I would probably also draft it in my favor.
 
However, I'm not - and therefore I'd like to see the consumer be more informed about what they are signing, as well as what elements they should be negotiating into any agreement they sign.

The responses on this thread have been fairly encouraging, and I know that not all REAs are bottom-dwellers. It's just that the bottom-dwellers so often are the ones sounding off...or, at least, they're the ones that stand out because of the stench associated with their behavior.
  • September 25 2010
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That sounds good but I question whether or not any buyers would be willing to put up any money (i.e.retainer fee) for something that previously they have been under the perception they have gotten for free.

The one positive to agents who leave themselves vulnerable by not havng a written agreement is that it makes us work all that much harder to try to retain buyers.  Doesn't always work but it definitely gives agents an incentive to do their best for people.
  • September 25 2010
  • 2Yes

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Profile picture for broker_GRI
Not all (or even a majority) of REA say


""otherwise, you have no guarantee that I'll be working in your best interests""?

Just like not all (and I hope not most...but some days it is hard to tell on here ;-) of REA say

"It's a great/best time to buy real estate"

Both of those statements are cringe worthy and should taste like poison coming out of the mouths of fiduciaries.

Our (CA.) state has an agency relationship disclosure to be provided/signed by the consumer "at earliest convenience" our office policy was at the first in person meeting.


I like that you have brought up the this particular topic for discussion but Buyer broker agreements protect the buyer about as much as listing contracts protect the seller, which is still slanted in favor of the broker.

There are addenda and options that you as a consumer and we as agents can choose/add to give more protection.

Personally, I don't advocate BBA often ...we'll see how my opinion of that changes as this former listing agent spends the next 5-6yrs as a buyers only agent
  • September 25 2010
  • 0Yes

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Profile picture for SoCal Engr
@ Joan...

I agree, people often suck. I refer to this as the "Wal-Martization effect", where consumer's don't care about anything other than price.

Things I think a REA should be protected for...
    Procuring cause
    Min commission if none paid by seller

Things I think a REA should be able to request...
    Min "retainer fee" for a defined representation (i.e., time, # houses, etc.)
    Exclusive representation within a bounded market
    Exclusive representation within a bounded time frame
  • September 25 2010
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SoCal, I am certainly not going to defend the "otherwise you have no guarantee that I'll be working in your best interests" argument and our office, to date hasn't used a buyer agency agreement but I'm sure you realize that agents are vulnerable to being used, sometimes for long periods of time, and dumped. 
I have to tell you, that sucks on so many levels.
  • September 25 2010
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Profile picture for SoCal Engr
Okay, but those answers all address the issue of "implied agency", and avoid the question about all the REAs I've seen on this site who have used the "without the buyer agency agreement, you have no assurance the agent is representing you" argument.

The fact that many states have an "implied agency" only makes the situation worse. Either the REAs know this, and choose to ignore it so they can try to get the agreement signed, or don't know it. Choose your poison, unethical or uninformed.
  • September 25 2010
  • 5Yes

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Roberto is right...there is "implied agency" in every state.  Lawsuit cases are full of them.

Regardless of what any consumer signs if you pretend to be someones agent or they THINK you are their agent than there is an "agency" relationship regardless of what was signed or not signed.


If it walks like a duck, talks like a duck....

Eve in Orlando
  • September 25 2010
  • 1Yes

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That's implied representation which doesn't exist in TX anymore since they introduced the buyer rep ag. about 8-10? years ago.  This is why we have a mandatory 1 page form that we have to give to a prospect on the first face to face meeting called "information about brokerage services" that explains who the agents represents.   Changes things from a customer vs. client.
  • September 25 2010
  • 2Yes

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I'm not sure about your state law, but here in AZ, our agency relationship to a customer is based on if the client THINKS we are his/her agent. So whether or not a buyer broker is signed has nothing to do with our responsibilities. If I am representing someone else such as the seller, I would have to clarify that in writing.

Happens all the time when I rent one of my own properties, obviously I am not working in the renters best interest at all, and I want that clarified upfront.
  • September 25 2010
  • 2Yes

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They would need to find another agent and it really isn't an ethical issue, it's a legal one since we are required to have a signed agreement with whomever we represent.  The buyer can opt not to sign the agreement at all.  We have to treat everyone fairly with or without an agreement, the difference is we cannot give advice or share information that could be detrimental to the seller with the buyer such as how much they paid for the house (in TX it's not public information) or how much they owe, how motivated they could be.

We can provide a CMA too.  Just the facts, no advice, opinion or recommendation.
  • September 24 2010
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