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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: bozwood who wrote (2828)	6/19/2002 2:00:57 PM
From: Tradelite	Respond to of 306849

Boz...sorry but it's hard to get too far into a discussion of buyer or seller agency on a thread like this. You ought to hear a bunch of real estate agents expound on this subject. The national real estate listserv that I subscribe to was almost shut down a couple of years ago by arguments among the writers over this subject. It can be argued philosophically to death, but the bottom line is that the concept and rules of agency vary from state to state, the practice of real estate varies from state to state, and the understanding of agency varies from person to person. When my spouse and I bought our home back in the 1970s, we were introduced to buyer agency by our broker, a friend who later became a state leader in real estate education. No one had heard of buyer agency at that time, even though it is a concept deeply established in law, which says that "Your client is the person who pays you." At that time, all agents were presumed to be working for the sellers, period--that's just the way real estate was practiced everywhere, and no one objected. However, we found a for-sale-by-owner house we wanted to buy and hired our broker friend to negotiate for us with the seller. We paid him an agreed upon commission out of our own pockets, and he represented us and only us. No conflict. Many buyer agents today have similar agreements for payment directly from their buyers. Some buyer agents even build in an incentive to avoid a conflict, such as getting paid more money for negotiating the house price downward by X or Y percent--sounds pretty unappetizing, doesn't it, when you have to pay extra to avoid a conflict of interest? If you want true buyer agency in its purest form, be prepared to pay the agent's fee. Or lobby the politicians to change the rules which currently prevent a buyer from rolling his agent's fee into his mortgage amount. As long as the fee continues to be deducted from the seller's proceeds at settlement, some buyers will always feel a conflict exists. In my state, the law is clear, however, that no matter where the money comes from, if a buyer signs an agency agreement with a real estate salesperson, the salesperson represents the buyer all the way.

To: bozwood who wrote (2828)	6/19/2002 2:08:10 PM
From: GraceZ	Read Replies (3) \| Respond to of 306849

And buyers of real estate may not now understand that they are customers, not clients, when consulting with a realtor. How could they avoid knowing this considering every single article I've read about buying a house in the last twenty years states that the agent represents the seller's interest unless the agent is a buyer's broker. One would have to have been living in Montana in a shack with no electricity to not know this by now. Plus, I even think the last time I signed a sales contract I was given a piece of paper disclosing this very fact to sign. One of the funnier things I read about stock brokers twenty years ago was that before you call your broker look in the mirror and repeat three times, "My broker is a sales person, my broker is a sales person, my broker is a sales person...." Yet people still think that their broker is going to look out for their best interest ahead of their own. Why does anyone expect that anyone else on the planet with the exception of their own mother is going to look after another person's interest ahead of their own? People have to look after their own interest, always.