Laura Rubinchuk Schwartz
By Laura Rubinchuk Schwartz
I met with a very nice couple looking to retire and relocate out of the area, which means selling their home of 20+ years. It had been many, many years since they needed the services of a REALTOR® or learned of the new way things are being done to sell a home, prepare for listing, and the paperwork involved in the process. After a brief tour of the home and some chit chat about their situation and goals for selling their home, we got down to the nitty gritty details, like commission.
After discussing commission rates and such, they asked my favorite question of every listing appointment: “Well, what would your commission be if you sold the house?”
My answer: “I never do dual agency. I think it’s a conflict of interest. I represent you and your interests in this transaction, and at the end of the day, I want to make sure you’re happy and you feel like you got the best deal possible. If I am representing both parties, I don’t think that’s possible.”
With total blank stares, and then a smile, the wife said, “You’re too honest.” My response? “I’m honest, but I also think agents have a bad reputation and we’ve earned it. It’s not about the paycheck in front of them, it’s about the long term happiness of both parties.”
I am sure this is bound to stir up some strong opinions on both sides of the argument, but I wanted to lay out my thoughts on dual agency:
- Agency relationships mean I sign a paper that says I represent the interests of the seller. I am trying to get them to meet their goals with this transaction. I always keep that in mind when reviewing offers and be sure to point out specifics that may be issues for them.
- I always show the property when asked, regardless of representation. If someone called me or came to an open house and did not have a buyer agent but wanted to write an offer, I refer them to an agent in my office who I trust. That way, I know the transaction will go smoothly with someone managing their expectations and representing their interests.
- In a world where someone can sue a company for burns after ordering hot coffee and spilling it on herself, why risk it?
- You don’t get a better deal for the buyer or the seller. Some agents don’t even take a lower commission for both sides, they take the full thing. When you sign a listing agreement, don’t you give them an estimate of what costs will go into selling their home? Isn’t that part of setting the list price?
- If your attention is split between parties, someone is likely to feel like they weren’t heard or forced to accept something. I’ve had a lot of happy customers over the years, and I’m not sure that could be said if I had been representing both sides.
Agree? Disagree? I KNOW you have opinions on this.
Laura Rubinchuk Schwartz, GRI, is a real estate practitioner with Keller Williams Realty in McLean, Va. Visit her blog at www.ArlingtonRealEstateNews.com or her Web site at www.TheLJRGroup.com.
Comments 5
Laura – Thanks for your article and view point. I am not commenting on the dual agency issue but I do have a question about your 4th bullet point when you say …”Some agents don’t even take a lower commission for both sides, they take the full thing.”
I think the full commission that was agreed to by the Sellers when they list home is what should be paid to the listing broker when a transaction occurs. It shouldn’t matter whether there are two agents or just one. The fee was agreed to be paid if the property was successfully managed, negotiated and closed.
I also think it’s important to say it is the listing brokerage that takes the commission and then they are the ones who share in the fee to the other co-op side (if there is one). How that fee is divided up between the agent and the brokerage should never be discussed with the clients.
Here in Florida if you gave the buyer to an another agent in your office it still is considered a transacational relationship but in reality in most cases each agent is looking out for the best interest of their client and provide loyalty to each side.
Great article Laura
Sean – to each his own! Thanks for sharing your opinion, I love to hear what others have to say on the topic.
Danny – it’s the same in the DC Metro area, we just call that a “designated representative” but the idea is exactly the same – each party has representation.
Laura – I just want to make sure I understand your stance. Are you saying if you listed a house at X% and the buyer approached you that you would refer the buyer to another agent and reduce the fee?
Or are you saying that if an agent happens to work both sides of the deal that they should automatically reduce their commission of X% to X-something% because there is only one agent involved?
What about for Pre-Solds? Are you just representing the Buyer or are you also representing the Builder? Just curious…