Harvey Jacobs opines in the Washington Post… Whom can you trust when you sell or buy? I read it this morning and stewed over the contents all day. It is a typical piece. It does not directly cast aspersions on agents. It just gently leaves the impression that we are not to be trusted.
Harvey is full of himself or excrement, you can read the article and decide.
I wrote Harvey a reply.
If a person were to sit behind the wheel of a car, pointed at a cliff and they pressed the accelerator, they would drive off the cliff in a fashion similar to the final scene in “Thelma and Louise”. Based on that scenario, apparently, you would share with the world that everyone behind the wheel of a car in a similar situation would drive off the cliff.
Typical sleight of hand sharing from an attorney. In real life, most people behind the wheel would move their foot from the accelerator to the brake and stop the car.
In your article in today’s Washington Post, you pontificate regarding whom one can trust and not trust in a real estate transaction. Much of what you say is accurate. Unfortunately, much of what you say is incomplete and you leave innocent readers with a false impression of reality.
The manner in which you chose to share partial truths certainly leaves me concerned that you represent “real estate” attorneys. Is it any wonder that those that practice real estate and read your column only find all of the negative generalizations about attorneys coming to life in your words.
To clarify. Your description of the listing Broker and agent is correct. Your description of the buyer’s agent is correct. When you describe the situation in which a buyer meets an agent at an open house is where brevity leads to misinformation. The buyer entering an open house must be informed by that agent exactly whom they represent.
An agent also has an ethical duty to let the buyer know there is an identical house for sale nearby with a 20 percent lower asking price. Why would the agent do such a thing? Well, if they enter into a buyer agency agreement (which is required by law if the agent is going to counsel and assist with the preparation of an offer) and an offer is prepared, the agent should prepare a list of comparable properties sold, under contract and active to assist the buyer in preparation of the offer. Knowing this, the agent will advise the buyer of the property and let the buyer decide.
“Buyers, beware”. How cute that you start the paragraph with the implication that some sort of tom foolery will surely follow. What is missing from your paragraph and “sage”(?) advice is the admonition that the buyer should enter a buyer agency agreement before discussing anything with the agent. Regardless, before any conversation takes place, the agent is required to let the “prospect” know exactly whom represents whom”.
Now I realize that your razor sharp legal mind will race to the “first scheduled face to face” phrase. Agents that fail to reveal whom they represent often will hide behind this phraseology loop hole. Others will take the position that the open house was scheduled as a means to have potential buyers come in and if any show up that do not have representation, they need to be informed of “whom the agent represents”. Rather than hide behind the possible interpretation of the words, most agents comprehend the intent of the law and act accordingly.
You then delve into “dual agency” and skim over it with a less than accurate description. You state, legally (there is that word you shy-locks love to bandy about), neither agent owes exclusive loyalty to the buyer or seller. You go on to point out dual agency is a conflict of interest because the goal of the buyer and seller are at odds with one another. You even go into some detail stating that agents are typically paid a commission based on percentage of the purchase price. You go on to reason that there may be an issue in getting what is best for the client and getting the highest overall commission for the brokerage. Apparently, now knee deep in your tainting of the industry, you continue out of control stating that confidential information and negotiating strategy may be compromised to the benefit of the brokerage.
Apparently, you have spent little if any time working closely with reputable firms. Using your logic, you would counsel those daft enough to seek out your services, to remain indoors all day because they might be hit by a falling meteor. I have no doubt there have been situations that have occurred that you could use as precedent for your thoughts. In the real world, brokers go to great lengths to make sure that neither side of a transaction is compromised.
The agents involved are also bound by a Code of Ethics. What you portray just does not happen in the real world. Agents (whether representing the buyer or the seller) represent their client. Brokers do not step in and attempt to influence any negotiations. I can understand your ignorance of how brokers and agents work. Knowledge gleaned from textbooks and war stories is often limited. When one works on an hourly basis, and is promoted or rewarded for exorbitant billing hours, they can not be expected to understand what it means to truly represent someone.
In real estate, it is not a matter of one side winning and the other losing. The goal is for both sides to be satisfied with the result. It is a shame that you have used your “position” to taint the hard working, honest real estate agents and brokers. But then again, it does not surprise me. You are an attorney and we know where your bread is buttered. The saying “justice is blind” only exists because attorneys generally cast integrity and right to the wind in their zeal to win.