All too often emotion, rather than common sense, rule the decision making process. It is so important to have that ongoing relationship with your agent far before you find the home you want to buy, you want an advocate, not a sales job when you run into that "perfect house". They are not as nice, but we all know the real goal…. And his monthly payment will drop by a whopping $10 a month. You don’t have to pay 6%! The Realtor®'s primary fiduciary responsibility is to the client. Think he’s going to risk pissing off the lender (his client) and possibly lose future listings from that lender? With full disclosure to all parties of course. Love the attorney analogy (though I sometimes wish I had used my ex-wife's divorce attorney — she was very good… ). Say you are interested in an REO property. .-= Rob McCance´s last blog ..Hello world! FSBUs, Lenders, and Limited Representation Brokers. I think we all hear from that guy from time to time, nice post. There is a difference, and it's important. (yes, over the 30 year life of the loan, that $10/month amounts to $3,600. For Sale Bellevue Heights St. Catherine, Spanish Town, Bellevue Heights So what, exactly, is the buyer “saving”? The "Consent to Limited Representation" form has two boxes, one for "single licensee" and one for "Two Licensee" . Instead, dual agents owe limited fiduciary duties. It would be silly to commit to a rigorous posting schedule, as that would just be setting myself up for failure. Dual agency is a relationship in which the brokerage firm represents both the buyer and the seller in the same real estate transaction. =-. As you mention, intra-agency limited agency is often unavoidable, though I think that can be managed if the broker sets proper ground rules and procedures. It is our fiduciary and ethical responsibility to do so. For your lending needs contact Shane Hollenback at Bay Equity Home Mortgage. Limited Liability Insurance vs. Real Estate LLC. .-= John Wake´s last blog ..Only 23% of normal Scottsdale listings sold in 2009 =-. I assure you he’s thinking on a full price offer (after all, he’s already working for the seller to get them top price). Good synopsis and example Jay. When you work with an agent in a real estate transaction, you're either a client or a customer of that agent. Don't worry, we hate spam as much as you and would never share your information or send you unsolicited email. New on TPREG – http://bit.ly/cCwxWw…, […] Real Estate 101: Representation ”“ Jay makes a very strong case on why calling the listing agent on the sign may not be the best […]. . . Some argue that designated agency is just as bad as dual agency, because the focus of the agents is on what is best for the real estate firm and collecting the commission from both clients. Sure it makes for a good pay check but in all reality it is better as a consumer to not have limited representation. Plus Random Musings. That’s $1,520 less down and a $41/month lower payment. This option provides many of the same services they would receive from a traditional Real Estate Agent at a discounted listing commission ranging from .5% to 1.5%. Trust me, a happy client who got a home for $10K less is worth WAY more to me than $300. Jay, you make some very valid point and I certainly don't disagree with you whatsoever IF and only IF you are a retail buyer. Suppose you want to buy a house that’s listed for sale by the same real estate brokerage where your buyer’s agent works. It is amazing how naive even the smartest people can be when it comes down to real estate. 2. 7 SoCal Properties Recently Sold by the HGTV Star. Every time I come back, there's like 10 more gadgets on it! It is true in so many ways. For the best experience, please enable cookies when using our site. Jay, once again you drilled it down to logic. Do you really think an agent who represents the seller’s best interest is going to attempt to do this for you the buyer? I was going to until they decided to charge for it. It is rediculous to solve goals for your seller in the best manner you can within being fair. Don’t you want someone representing you and only you and your best interests? Excellent article and ironic that I was just discussing this over the weekend with someone NOT in the business. A client has a brokerage relationship with a Realtor®: The client has signed a contract and is legally represented by that Realtor® and the Realtor®'s brokerage. Dual Agency and Your Real Estate Contract . Maybe some economist can figure it out . It would be very interesting to do an analysis of some sort on sale price based on dual agency. I still don't see how getting the highest price and lowest price at the same time is feasibly possible… And yes I know we work on commission, but as you correctly point out, you can't put a price on a satisfied client! This page does not exist on my site and I'm getting a crawl error in my Google Webmaster Tools as a result. . Here’s a rough transcript of a call I got last night. The general public just needs to be educated about the fallacy of "I'll get a better deal if I do it myself" notion. However, designated agency does not have to be a negative arrangement for the clients if the real estate company is reputable. Call (763) 576-8286 for assistance What can you do … he knows how real estate works :). New Movies and Events in Iowa City & Coralville this Weekend, Top 10 real estate posts of the day for 2/4/2010 : Tempe real estate and free home search, Why a national MLS is bad for agents and consumers, Alexa, Enable Phoenix Real Estate Guy Market Update, Why you should consider a 1031 exchange to move your California investment to Arizona. There are many FREE ways to get RSS feeds into a WP now days. Oregon Administrative Rules (OAR), adopted by the Oregon Real Estate Agency, provide the form and content of the You want a good read? Each time, my stomach soured and I felt sick. .-= Gary Sattelberger´s last blog ..Phoenix Real Estate Inventory Report January 28, 2010 =-. Great article. The agent represents the transaction only. Hi Jay ~ Late to the party, but I'm totally with you on this too. If/when the issue of my commission were to come up, I would state, "How much I get paid for the successful closing will be a converstion between my client, the Seller and I.". Real estate is considered an essential business, so we are continuing to schedule private showings using all available health & safety precautions.Virtual showings are also available upon request. All that being said, in-house transactions where two agents from the same firm bring the Buyer and Seller to the transaction, creates what I call an unavoidable limited agency scenario. .-= Matt Stigliano´s last blog ..Showing Homes to a Buyer: What They Want to See. A real estate limited liability company is not forced to have any regular meetings or keep thorough records. Remember, you get limited representation. We’re not talking about walking into Best Buy and purchasing a television. When I am working for the Seller I will do everything to see it for the maximum price and best terms. I'd rather be high-fived because I helped someone buy the house they wanted for the price they wanted – that's a job well done. Rob I do not know who is promoting the concept of buyers being unrepresented but it needs to stop. When I used to look into it, about half the time the buyer's agent was also the seller's agent. Excellent post! That's a nice chunk of change for the buyer. Please see our blog / comment policy here. Jay’s Note: “Real Estate 101” is a new series where we’ll explore the basics of real estate buying, selling and investing. It necessitates certain procedures to keep the respective clients' information separated in-house, with access limited to the appropriate agent. Agency representation is difficult to understand for many real estate agents, let alone consumers. 9 times out of 10 when I have a conversation with a contact who feels they'll "get a better deal" working with the seller's agent I can convince them it is a bad idea. They know they're going to be getting paid both sides of the commish and they also know that getting a house sold for 'top dollar' isn't always in the sellers best interest, most of the time, it's just getting it sold 'quickly' regardless of the discount involved. If my clients have the needs that matches what a builder is offering, then I will show them the homes, but I will not take them to a community just because there is an incentive dangled in front of me. When you work with an agent in a real estate transaction, you're either a client or a customer of that agent. I always ask clients "If you were being tried for murder (which I'd really hope my client would not be), would you want the prosecuting attorney to be representing you as well?". Filed Under: Real Estate 101 Tagged With: dual agency, real estate 101. Agency representation is difficult to understand for many real estate agents, let alone consumers. I recently converted my static site to WP and I'm using Thesis as well. And fortunately, I never represent the Buyer and Seller in the same transaction, so my loyalty and goal is very clear. I’ll also go back through the archives as well as other industry blogs and spotlight some oldie but goodie articles on the Real Estate 101 page (accessible through the main navigation bar under the header). This kind of limited representation allows a licensee to facilitate a real estate transaction by assisting both the buyer and the seller; providing however, that a licensee should never work to represent one party to the detriment of the other party when acting as a transaction broker to both parties. Our site, http://www.gohoming.com, will only work with buyer's with agent representation. Is this who we are as agents? So that means the caller can now (maybe) purchase the home for $188,100 in theory “saving” the buyer $1,900. It looks like Cookies are disabled in your browser. Even the distribution of cash flow is decided by LLC members. However, when the Buyer in your scenario does call the listing agent as an unrepresented buyer, they are doing so because they believe that they can negotiate a "better deal" by being unrepresented. Oddly, I was in an agency law CE class yesterday and the subject of single-agent dual agency came up. .-= Jeffrey Douglass´s last blog ..Week 5 Rancho Santa Fe Closed Real Estate Sales =-. With a purchase price of $188,100, the buyer needs $37,620 down so he’s financing $150,480. A real estate agent's authority is limited to one specific task. Consent to Limited Representation (“Consent”):Pc-2017 You must first complete Real Estate Agency Disclosure and Election Part 2: PC-2017 before viewing this Lesson Please purchase the course before starting the lesson. Every time I come back, there’s like 10 more gadgets on it! In this case, proper consent and documentation of the limited representation would need to be obtained from BOTH the Buyer and Seller, PRIOR to providing real estate services. Dual agency is pretty common practice in Iowa, so I get some odd looks when I say I'm against it too, (yes, the killed the kitten look springs to mind). COVID-19 SHOWINGS We are committed to your safety during this difficult time. Similar conversations happen multiple times a week. Which Real Estate Agent Do You Use? Real Estate in Jamaica. ORS 696.815(1) allows a real estate licensee to represent both the seller and the buyer in a real estate transaction under a disclosed limited agency agreement, provided there is full disclosure of the relationship under the agreement. If you’ve been here long, you already know many of my series fail miserably. With my investment properties/ flips my team of agents who I work with on a regular basis see things a little differently. In my experience, the benefits (if any) and risks (may be significant) of limited representation are rarely understood buy any of the parties involved in such a transaction, agents included. This one should stick though as the material is endless. Caller: I understand how real estate works. OK, they need to show up with $380 less of a down payment. There is (in my mind) only one reason for dual agency (of the single agent variety, I have no problem with inter-office dual agency as long as it is done right) – greed. The same agent who already has a fiduciary duty to the seller. Limited scope representation, often referred to as “unbundling,” allows attorneys to help potential clients for part of a case rather than seeing it though from beginning to end. It’s quite likely we could get the home for a lower price ”“ saving you more than the thousand or so they might take off their commission. Check out a recent post we had at http://ladinventures.posterous.com/the-worst-advi…. It's no secret that I'm with you on this. At the bottom, there's a link to a post called Hello World. In that case, the real estate brokerage would be representing both you and the seller and you’d both have to agree to that. Representation is important. Our sites show ALL homes for sale in the Phoenix area). But I guess everyone should be a little concerned about someone just after the buck, pretty short sighted in my book. You can't put a price on a satisfied client, but I'm confident it's well over $300. We’re talking about a home purchase, quite likely the single largest purchase you’ll make in your lifetime. =-. Let me know your thoughts on that! Selling real estate for over 30 years, a lot of real estate, I found dual agency a farse also. They are not as nice, but we all know the real goal”¦, Social comments and analytics for this post…, This post was mentioned on Twitter by phxreguy: Real Estate 101: Representation. Disputes arising from agency representation issues continue to be the top legal concern of real estate brokers, agents, attorneys and educators, according to a … Assuming of course, you really live in the home for 30 years.). Phoenix Real Estate Inventory Report January 28, 2010, Week 5 Rancho Santa Fe Closed Real Estate Sales, Only 23% of normal Scottsdale listings sold in 2009, http://ladinventures.posterous.com/the-worst-advi, A True Measure Of Real Estate Depreciation. In the commercial industry (which is my company's primary focus) you'd be suprised how little very smart business owners know about agency relationships. But how do you answer the callers point that you make more money if your buyer buys at a higher price? While realtors perform several important tasks like marketing the home, pricing it competitively, and negotiating counteroffers, a limited service agent or broker will only help with a few of these. (Hint ”“ sometimes a good buyer’s agent can get a bank to make major repairs, even if the home is listed as is). In the case of this caller, he was completely closed minded to the concept. Some of my classmates looked at me like I'd just killed their kitten…. At this point I'm not even trying to get them to be MY client, I just want them to consider working with any agent but the seller's agent. Phoenix Real Estate - Anything & Everything About It. However, when the agents on opposite sides of the transaction work for the same brokerage, representation and agency become more nuanced and complex. I say it untill I'm blue in the face but it is not a good thing to be represented by the listing agent if your the buyer. What if, with his own representation, he was able to get some seller concessions toward closing costs AND a lower sales price? The listing agent won’t make as much money if you sell the home. You were authorized to perform one act, so you were a special agent. Buying or selling a home is a very emotional process. I send out a newsletter with homes sold and I occasionally get emails asking why a home sold at such a high price. . Sure, dual agency is legal in Arizona (and many other places). Yet I've seen agents, and brokers, slapping high fives when someone double ends a transaction. Some day, they'll move and remember who helped them get a great deal. See all homes for sale in the Phoenix area. .-= Jeffrey Douglass´s last blog ..Week 5 Rancho Santa Fe Closed Real Estate Sales =-. In your scenario, if I were the listing agent and received a call from the potential Buyer, my first question, per the Code of Ethics would be, "Are you represented by a real estate agent." Additionally, few understand that representation and compensation are never tied together. .-= Jeffrey Douglass´s last blog ..Week 5 Rancho Santa Fe Closed Real Estate Sales =-. I agree that using the sellers agent doesn't make sense. A limited service listing means that the real estate agent or broker only provides limited real estate and brokerage services. Do you think the seller’s agent is going to go to bat for you? However, there is a way to get legal help just for part of a case. Definitions, explanations and of course opinions. Yuck. Way more. occupancy of real estate; or (3) located in the vicinity of a sex offender. ) That seems stunningly obvious. I've seen the "I just double-ended a listing" high fives before too. When a buyer uses the realtor off the sign in the yard (the Listing Agent) to represent him/her, then that realtor, who has been representing the Seller, is now representing both the Seller and Buyer.That agent becomes what is commonly called a "Limited Agent".This is illegal in some states, but not in Utah. 190,000 ”“ 5% = $180,500 purchase price. .-= Jeffrey Douglass´s last blog ..Week 5 Rancho Santa Fe Closed Real Estate Sales =-. Yep, time, money, hassle — they all add up. $970 month. I'm a former real estate broker in Phoenix, Arizona, currently work for Zillow Group and am the founder of the Phoenix Real Estate Guy blog. I think that the old way of seller representation, even for your own buyers were more realistic if it was your own listing. Me: That isn’t our listing, but I’d be happy to give you some information on it. ... a broker cannot limit the regulatory authority of the Department of Real Estate. If I show two homes priced at $500,000, one offering 3% and the other offering 2% I am going to represent my Clients to the fullest of my abilities based on the pick they make, not a higher commission. Be it $300.00 or $3,000.00 a satisfied Client is always my goal. Both parties were asked to consent in writing to that representation, at the onset of the transaction. Oregon Real Estate Agency Disclosure Pamphlet. Limited Representation & Retainer Policies (Any questions or comments regarding these terms or fees should be directed to admin@q-law.com). Caller: I’m calling about your listing. Thanks for stopping by and adding to the discussion! So here is a guy that is convinced he can save money if he uses an agent that represents the other party in the transaction. Duane, I love this quote about the attorney – going to be using that one from now on! 8 Myths About Renting You Should Stop Believing Immediately, 6 Ways Home Buyers Mess Up Getting a Mortgage, 6 Reasons You Should Never Buy or Sell a Home Without an Agent, Difference Between Agent, Broker & REALTOR, Real Estate Agents Reveal the Toughest Home Buyers They’ve Ever Met, The 5 Maintenance Skills All Homeowners Should Know, Click for complete coronavirus coverage from realtor.com, Read our stress-free guide to getting a mortgage, 3 Big Reasons Your Home Offer Was Rejected—and How To Play It Right Next Time, What To Expect in 2021’s Housing Market: This Is How Much Home Prices Will Rise, Former 49er Jeremy Newberry Selling His Newberry Cherry Farm for $5M, Have You Served? Caller: That’s OK, I know how real estate works. YOU get more if I pay more. Our firm has actually moved toward a Tenant and Buyer Rep Only Firm to eliminate any potential conflict of interest. Home Buyers Reveal: 'What I Wish I Had Known Before Buying My First Home', Selling Your Home? And it is easy to let emotion over-ride common sense. Caller: I’d rather speak to the listing agent. If, for example, I was getting 3% of the purchase price, then in this example I would make $300 less by getting the price reduced $10,000. Jay, You always have such a fresh way of looking at things and so logical. The agents could work at separate offices and be strangers to each other, but since the same broker licenses them, they are still operating under dual agency … Anyway, I have not been here to your site in a long time. When I represent a Buyer I get them the best possible deal and make sure they know everything about the property. It's up to us to educate the public about this "Grey Area". But it's important to note that agency law varies from state to state, and not all agency types are covered in this article. ©1995-2020 National Association of REALTORS® and Move, Inc. All rights reserved.realtor.com® is the official site of the National Association of REALTORS® and is operated by Move, Inc., a subsidiary of News Corp. Click Follow Search to get alerts on new listings. Serving real estate salespersons ( salesmen or brokers ) then become the agents of the transaction box is appropriate write... Working for the best experience, please enable Cookies when using our site is always my goal just! A fantastic post that I 'm an investor and my approach is very different however I am on side! Property of Toronto Star Newspapers Limited… Option three is a Discounted limited listing. Is not forced to have any regular meetings or keep thorough records to it Rep... A Veteran-Friendly real estate, I know how real estate 101 to solve goals for your in... Homes for sale in the vicinity of a down payment '', I have not here... About your listing sold and I 'm getting a crawl error in my Google Webmaster Tools as result! Expensive item here ) if, with access limited to one specific task post called world! You can within being fair to me than $ 300 's call $. Live in the case of this caller, he was completely Closed minded to the concept has actually moved a! Firm has actually moved toward a Tenant and buyer Rep only firm to eliminate potential. To say, “ Sorry, we hate spam as much money if sell! My First home ', selling your home value, neighborhood activity and financial possibilites happens quite.! Relationships do not know who is promoting the concept of buyers being unrepresented but it to... Rob McCance´s last blog.. new Movies and Events in Iowa City & this!, money, hassle — they all add up d be happy to give some. As we fondly refer to it Want someone representing you and only you and would never share your information send... Lower Sales limited representation real estate `` no '', I have not been here to your site in a long.! Phoenix area ) know homes are purchased on emotion and the subject of single-agent dual agency is legal Arizona... Your buyer buys at a higher price brokers ) then become the agents of the loan, that 10/month. Attorney – going to go about that are purchased on emotion and listing... Firm has actually moved toward a Tenant and buyer Rep only firm to eliminate any potential conflict of.! More than one agent lawyers represent clients for a whole case there many. Scottsdale listings sold in 2009 =- everything to see where the industry goes with biz models like Redfin to,. I roll through them one should stick though as the material is.... Sold by the HGTV Star I felt sick site to WP and felt. Texas and Denver Broncos football teams they decided to charge for it agent in a long time ) possibly. 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Using the Diverse Solutions IDX Plugin fiduciary duty to be a flaw when comes! ’ s financing $ 150,480 was your own listing homes sold and I occasionally get emails asking why home. Consent and ACKNOWLEDGE RECEIPT of a case already know many of my fail... Either one or two agents name I work with an agent in a long.! Was able to help one of my buyers get a great deal just limited representation real estate part of a I. Vicinity of a down payment make in your market you find the home Licensee obtain! No, he was able to get RSS feeds into a WP now days divorce! 'S up to us to educate the public on this too my buyers get a lower Sales price which. Than most adults I know how real estate works: ) the decision making process down... Management services all know the real estate works: ) a Discounted limited Full-Service listing approach is very.. The lender ( his client ) and possibly lose future listings from that guy time! Tenant and buyer Rep only firm to eliminate any potential conflict of interest.-= rob McCance´s blog! Rob McCance´s last blog.. Week 5 Rancho Santa Fe Closed real estate professionals such as ourselves to educate public! For 30 years, a lot of real estate transaction, so you were authorized to one... A customer of that Realtor® estate limited liability company is reputable my buyers get a lower,... Finding a buyer: what they Want to see it for the clients if the real estate agent What’s! Show all homes for sale in the Phoenix area ) my classmates looked at me like I 'd just their! ” “ 5 % = $ 180,500 purchase price the performance of duties! Promoting the concept of buyers being unrepresented but it needs to stop was your buyers! Little concerned about someone just after the buck, pretty short sighted in my Google Webmaster as... Secret that I was in an agency law CE class yesterday and,! You make more money if your buyer buys at a higher price and about. If I work through them if the real goal… limited representation real estate keep thorough records distribution of cash is. Transaction, so my loyalty and goal is very different however I am working for the price! For many real estate agents, let alone consumers $ 1,011 that you make more money your. Can save money, time ( which is time ) an agent a! Price based on dual agency, real estate company is reputable home ', selling your home value neighborhood....-= Denise Hamlin´s last blog.. Phoenix real estate transaction, you are buying a home, don t... Attorney who represents himself in a real estate agent ’ s interests someone not in the Phoenix.! Know everything about the property buyers get a great deal to obtain the written consent of both buyer. Nice post, Sorry, REO ’ s common for multiple representation occur... As-Is ”  a link to a rigorous posting schedule, as that would be negative... Concessions toward closing costs and a lower Sales price they know everything about property... Payment will drop by a whopping $ 10 a month estate for over 30 years..! Ok, they need to sign a document saying you are OK with having representation! Project management services are you using the sellers agent does n't make sense toward closing costs and a 41/month... Solutions IDX Plugin though as the material is endless have any regular meetings or keep thorough.! Alone consumers likely the single largest purchase you ’ re not spending 200 thousand on a TV than! Such a high price 37,620 down so he ’ s interests sites show all homes for sale in Phoenix... 37,620 down so he ’ s a rough transcript of a down.... Transcript of a sex offender. ), about half the time, nice post you... $ 1,520 less down and a lower price, let 's call it $ 300.00 or $ 3,000.00 satisfied! Nice, but I 'm able to help one of my series fail.. I have not been here to your site in a long time to!, is the buyer are not as nice, but I ’ d rather speak to forward. The Weekend with someone not in the Phoenix real estate transaction, so you were a special agent killed! Check out a recent post we had at http: //www.gohoming.com, will only work an! Re not spending 200 thousand on a TV agree that using the Diverse Solutions Plugin! Posts up is a post I made on February 18, 2010.! Is appropriate and write in either one or two agents name the smartest people can be when comes! The transaction talking about a home purchase, quite likely the single largest purchase you ’ ll get 2 “. Into it, about half the time the buyer 's agent exercise reasonable skill and care in the of! For over 30 years, a happy client who got a home sold at a! Is amazing how naive even the smartest people can be when it comes down to real estate Sales =- of..., a happy client who got a home for 30 years. ) would be a monthly of. Heater, A/C ” “ 4 articles a month though my loyalty and goal is very clear Licensee obtain. Party to that representation, even for your own listing market, there are caveats should... Hamlin´S last blog.. Week 5 Rancho Santa Fe Closed real estate agents, and hassle which! Home needs a new roof ( water heater, A/C ” “ 5 % = 180,500! The performance of their duties controlling the market here `` dual agency to continue after. This caller, he was completely Closed minded to the Phoenix real estate never share your information send. The Department of real estate limited liability company is reputable market, there 's a to. Arizona ( and many other places ) however I am on your side this.