Mastermind. Who Do You Represent In The Real Estate Transaction?
Happy wednesday. Two interesting conversations that arose from this week’s Mastermind group revolve around the same topic. It must be something in the air. In one situation, an agent talked to a long time friend about his future house hunt. The friend was quiet blunt in his belief that he will only buy through a listing agent. My agent came to me looking for some good bullet points so he could formulate the perfect rebuttal.
In the second situation one of my agents got a last minute call from someone interested in her listing. He was interested in putting in an offer but only as a customer. The customer then insisted on getting information on the owner’s reasons for selling, wanted all kinds of assurances from the seller on work done, wanted to know the seller’s story, and a host of other pertinent information. He also wanted to get our agent to reduce her commission. As it turned out, there were two other offers and our agent made it very clear to the other agents that she had an offer and that the buyer was only a customer and that there was no commission cutting.
In the continuing hot Toronto market, buyers are looking for two things….an inside advantage to win in multiple offers AND to save a bit of money along the way. So what do you say to someone who thinks dealing with the listing agent is a better way to go? For starters, be careful what you wish for.
We are seeing buyers contact listing agents more often than ever before so this is clearly the time to ask the question. The reality is that no matter how you slice it and dice it, it is very tough to represent the interests of two competing entities especially when the forces of multiple offers add to the equation. There are several ways around it but the point of this post is to simply remind us all of our fiduciary duties along the way. We need to take extra precaussions and take more time. In the end, you want everyone to feel like they were treated fairly.
Sure there will always be agents who will use the “home field advantage” to double their commission. Unless RECO makes some tough decisions on this matter, it is going to keep happening and ethical agents will continue to draw the short straws. We can only hope that those who get caught face stiff penalties. So, for now, let’s focus in on the topic of representation and what that exactly means.
We talk about this basket of ‘fiduciary duties’ that we owe to a client, but what does it really mean? In plain language it means that we owe our clients honest accounting, competence, confidentiality, good faith and full disclosure, loyalty and obedience. I think we can all find examples of how our duty plays out with our clients on a daily basis. A customer, on the other hand, is not owed the same duties however he must be dealt with fairly, honestly and with integrity. I would be the first to argue that these terms can have a broad range of meaning. Common sense should dictate here so when in doubt simply imagine standing in front of a judge answering questions about what you said and to whom.