Who does your top agent work for? Make Sure its you

WHO DOES YOUR AGENT WORK FOR? (MAKE SURE IT’S YOU)

Many years ago when I was living in Cincinnati I went to a business luncheon and the Key Note Speaker was a local journalist and ex-mayor of Cincinnati, Jerry Springer. There were only about 40 to 50 in attendance so it was a rather intimate gathering. I have always remembered something Jerry said about interviewing a potential news source.  He said that he got the most important information from his sources after the interview was over; after he turned off the camera, turned off the microphone, or put his notebook away.  The source would then let his guard down, assuming he was off the record, and he would wind up thinking Jerry was just a friendly guy that he could confide in. The source would "forget" who he was talking to.

In real estate, never forget who you are talking to. Is that agent you are chatting with working for you or for someone else? In fact, is that agent that you HIRED working for you or someone else? In Florida, a residential real estate licensee has three clear roles. He can act as:

1.       A single Agent, or

2.       A transaction Agent, or

3.       No Relationship at all

I have included the actual verbiage from the regulations below. In all cases you should assume that the agent works for the OTHER GUY in the transaction unless you have signed a document that makes him YOUR SINGLE AGENT.  Be careful what you disclose about your motivation, how high or low of a price you will take or pay, or any personal information that might affect negotiations (like your pending divorce or financial status).

When taking a listing for a property most Florida real estate agents represent themselves as a transaction broker. A transaction broker owes no loyalty, obedience, full disclosure, or full confidentiality to his client like a single agent would.  Most agents find in easier to act in this role than as a single agent.

As a broker I always prefer to sign a single agency listing. I like to know very clearly who I am working for and who I owe loyalty to. It's less confusing for me and serves the client better.

When you are touring open houses or models for a developer, you can be sure that the agent is either a single agent for the seller or at the very least a transaction agent.  Having a sharp agent as a single agent representing you and your interests is a wise move.  Don't think you will get a "better deal" by using the listing agent or the developers representative. It  is a well believed myth that if you want to make the best deal on a purchase you should call the agent that has the listing. The popular thinking is that you can make a better "deal" when only dealing with one agent. The theory is that he has more room to negotiate since there is only one commission.  It is my belief, however, that you are ALWAYS better off with good, professional and skilled representation in negotiations than if you deal on your own. The key here is the quality of your agent and how well he can negotiate.

I have found that some agents not only don't work for their client very well, they really are just working for their own objectives. A month or so ago I made an offer on a commercial condo here in Fort Myers, not too far from my home. I represented myself to the listing broker as an agent and made an offer on the property that was close to asking price. In the contract I was entitled to half the commission. Later that morning I was discussing this potential purchase with one of my friends. He knew the seller well. I asked him to do me a favor and put in a good word for me, tell him I was a serious buyer etc.  My friend later reported to me that the seller had a few other offers that same day. I promptly called the listing agent and told her what I had heard and that I would remove all financing contingencies, I would shorten the due diligence period and told her very clearly that I wanted the place and there was room in my price.  I clearly wanted the condo.

She called later that day to tell me that the seller had accepted another offer. No counter. No negotiations. I was furious. Indeed I would have paid OVER the asking price and was prepared to do that. Very simply the listing agent was not looking out for the best interest of her client. She was more concerned about getting the full commission  - EVEN THOUGH TAKING A HIGHER THAN ASK OFFER WOULD HAVE BENEFITED THE SELLER. You see, the client was paying six percent no matter what. I lost the deal and the seller lost another $10,000 or so.

Here are the requirements:

Single agent relationship

- A single agent is a broker who represents as a fiduciary either the buyer or seller, but not both, in a transaction. The single agency relationship is the only one that establishes a fiduciary relationship. The fiduciary relationship legally allows the seller or buyer as principal to place trust and confidence in the broker as his or her agent.

The duties of a broker acting as a single agent include:

1. Dealing honestly and fairly;

2. Loyalty;

3. Confidentiality;

4. Obedience;

5. Full disclosure;

6. Accounting for all funds;

7. Skill, care, and diligence in the transaction;

8. Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing; and

9. Disclosing all known facts that materially affect the value of residential real property and are not readily observable.

Transaction Agent

The duties a real estate licensee owes to a buyer, seller, or both when acting as a transaction broker include:

1. Dealing honestly and fairly;

2. Accounting for all funds;

3. Using skill, care, and diligence in the transaction;

4. Disclosing all known facts that materially affect the value of residential real property and are not readily observable to the buyer;

5. Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing;

6. Limited confidentiality, unless waived in writing by a party. This limited confidentiality will prevent disclosure that the seller will accept a price less than the asking or listed price, that the buyer will pay a price greater than the price submitted in a written offer, of the motivation of any party for selling or buying property, that a seller or buyer will agree to financing terms other than those offered, or of any other information required by a party to remain confidential; and

7. Any additional duties which are mutually agreed to with a party.

As indicated by the above, a transaction broker has a duty not to discuss price (other than the price quoted in a listing), motivation, terms, or other information a party deems confidential which may harm that party's bargaining position.

No Brokerage Relationship

The Brokerage Relationship Disclosure Act defines the duties a real estate licensee owes to a customer with whom the licensee has no brokerage relationship. A licensee's duties when no brokerage relationship has been established are:

1. Dealing honestly and fairly,

2. Disclosing all known facts materially affecting the value of the residential property which are not readily observable to the buyer, and

3. Accounting for all funds entrusted to the licensee.


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