JR, that's exactly the way to go, IMO. If they're not interested at that moment, reviewing their copy later opens the door for more dialogue later- the "why" is a more interesting opener for some than the actual content, and having it out of the way is simply the right thing to do, while permitting a customer time to review later.

when that disclosure comes out, written in legalise, the consumer glosses over and shuts down. What's going to change that?
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Maybe educate the public about why exactly that disclosure exists when we pull out the disclosure?

It's very interesting that buyer agency has been around for years and has not caught on in a big way. I did some research recently and found media articles touting buyer agents written in 1996 and after. Obviously, the consumer has not seen it as a widespread viable option, at least not up until this point. Sure, there are some successful buyer agents out there that will recoil when reading this, protesting that it IS very viable.

That being said, with all the web 2.0 gizmos and gadgets coming out, with zillow, trulia , redfin and others trying to 'crack the code' of the consumer/agent relationship, I think buyer agency is worth the effort today, especially in this market. The probem as I see it, is that the consumer doesn't trust the real estate agent and no matter what is said, when that disclosure comes out, written in legalise, the consumer glosses over and shuts down. What's going to change that? We can't call on Mrs. Fields anymore...

JR, I like to think that that's because they've never looked at another open house, or at all of the open houses that they've visited, they ran in and out too quickly to get a disclosure of who the agent is at the house. Remember, I spent a lot of time out west in the cornfields.

I'm doing a blog on our site with the following link (and, point): http://realestate.msn.com/Buying/Article_usnews.aspx?cp-docu…

My immediate take was that I sure wouldn't want to be a seller with a dual agent.Obviously, my opinion is etched in stone on that, but the decision is made by the buyer/seller- and they have a legal right to get choices and facts at the first substantive contact (which, if I'm chatting beyond niceties at an open house and offered any info from the potential buyer, is exactly THEN). "Substantive contact" to someone else may be different- I like it out of the way so that the conversation is appropriate at all times between us. Letting them be dismissive is a huge disservice to them- if they hate me for explaining, so be it.

We've been presenting agency disclosures for years. Most buyers dismiss this quickly, saying, "yeah, yeah, we know." and take the disclosure, set it aside and want to deal with hearing about and seeing the property of interest.

It's not that people are stupid. I dont' think that at all. But, people want information on their terms when they want it, and often are not interested in hearing information about agency when their minds are focused on their concerns....i,.e. what are the taxes?

Laurie, I've discovered that when I present the agency disclosure at open houses, many people have never seen it before, even if they've just come from an open house.

Zack, I'm always a pessimist re. non-disclosure in a purchase as huge as a house. I'd rather err on the side of creating initial confusion, but clarify so that everyone can move along with the same understanding of what can/can't or should/shouldn't be shared. People aren't stupid, and shouldn't be made to feel that way when, down the road, a lightbulb clicks when true agency is revealed. There are enough surprises in real estate.

From optimist to pessimist in a single post. Good range :).

I agree completely in the example of an open house. Giving the benefit of the doubt, these agents could be assuming that the people who walk in know they're representing the seller, but I agree that many conveniently don't disclose. I actually think the pitfalls of dual agency is a bigger problem that would need to be disclosed and appreciate Marc Paolella's constant battle on the NJ boards about this.

It gets a little more murky when referred by a friend. Or random meetings. My wife met a realtor we were using for a while sitting in the lobby at our daughter's doctor's office. We had an initial discussion, but there was no real disclosure done and we never signed an agreement. I was aware of this, but it was never mentioned.

Zack

I should add: as a matter of preference, we don't engage in dual agency. Any buyer that appears at an open house is advised to get their own representation. The upside? If ours isn't their house of choice, we're probably the first to inform them of agency, so they'll call us if they'd like to see a property not listed by us, but one in which we can fully represent them. Seems like a worthwhile trade off.

And Zack, you're not stupid. It is law in NY that the agent provide disclosure, and I guess that's why it's so frustrating to see consumers that don't have a clue. It's SO SIMPLE, yet many agents fail to suck it up and DISCLOSE. So I'm not going to be able to represent a buyer on a listing of mine when I do an open house- so what? The open house is the job I'm performing for the seller, in order to expose their property. People that visit look at me with a blank stare when they're asked to acknowledge my position in the transaction. This isn't stupidity, it's calculated non-disclosure on the part of real estate agents that conveniently ignore this aspect of their JOB. If a buyer such as yourself has to go to the internet for answers, clearly there's validity that the real estate contingent is failing miserably with this aspect of their job.

I not only took Jim's class, I practice it!
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He's great, isn't he? I always look for his classes.

Laurie, I see you're an optimist. I'll agree people will understand the advocacy when explained to them, but they make no effort to seek out this knowledge. Ideally the agent would explain how it works to them when they first meet but in the case when you meet with the sellers/listing agent, this isn't realistic. Also given the almost lack of a barrier to enter the real estate profession, some people will, by sheer chance, first encounter an uninformed or a lousy agent. If they like that person because they're both Jets fans, well they may never find this information.

Personally, I'm very big on personal responsibility so I believe the buyer, when researching what is very likely to be the largest purchase of their life, should have some knowledge of the options for representation and who to ask. So I'd say is the buyer's job to become informed at least enough to know you should find a buyers agent. I did a decent amount of research and still was unaware of the difference between a customer and client relationship and what this entailed. None of it was surprising, but I assumed that the agent showing you the house would be required to act in your interest with or without an agency agreement in place assuming they weren't listing the property.

Zack

I not only took Jim's class, I practice it!

If all I did was walk a buyer through a property and collect a check, then there might be some weight to your argument. My buyer clients are comfortable with their purchase because they have seen comps for like properties and the offer is discussed in great detail of how it will be presented. They have seen like properties in the area to justify their decision. I attend all inspections and the closing. I stay on top of the transaction and keep my buyer informed of every step of the way. I refer other professionals and services they need. If I don't know the answer, I will do everything I can to get it.
I earn my commission. My buyer clients have written testimonials and referred others to me.
An unrepresented seller (FSBO) is not paying a listing agent to expose their home to the buying public. That doesn't mean that he can't benefit from having a professional agent coordinating the sale of his home. This year I closed on such a transaction with an expired. The unrepresented seller kept hugging me and saying I know you work for the buyer, but I can't beleive how great this experience was after the unfortunate experience he had while being listed. If the FSBO does not want to accept our offer, is the same as any seller not accepting an offer. The difference is I can present more information on the buyers behalf why it is a fair offer for the property.

Zack, if I may- the buyer may be uninformed, but who's job is THAT? Stupid, no. When it's explained, they get it immediately.

Educated buyers understand it, but like many of the posters mentioned its who they feel comfortable with that gets the business. If they walk into an open house, like hte person, that person could easily become their agent. We looked around a bit and tried a couple of agents and have had bad experiences unfortunately. We had a buyer's agent we loved for our original purchase, but his firm has added a bunch of fees in that will drive the cost of using him over 5k out of pocket for us, which we wouldn't do. Generally though, the public is stupid and uninformed and since this sort of advocacy is new, few know of it.

The fact is- the seller brings to the closing table the keys and the deed. The buyer brings the money.
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You took Jim's buyer agent class too, didn't you! :)

I think that is a great argument he uses, but I still have a hard time wrapping my head around it. If you pay me $20,000 for my car, I then pay my expenses out of that, such as advertising and the payoff of the loan. What I do when a buyer hands me the money for my house is my business, and like any FSBO, I'm not out to give the buyer a break because I have no agent. Look at most FSBOs who offer to pay an agent: "My house is 520,000 if you come without an agent, 545,000 if you bring an agent". The 520 is probably too high, and they're trying to do it ADD the agent commission to the already high price! I am all for buyer agency, and am a CBR, but I don't agree with the keys/deed/money argument.

--->>>"Law requires a seller's agent to obtain the best price possible from a prospective buyer and not do anything to harm that possibility.--->>>


Glenn, you didn't print that with a straight face, did you...?



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Glen, they don't "rarely" work for both- they NEVER work for both in NY, under disclosed dual agency. They work to the benefit of neither, as indicated on the NYDOS- as should be signed off on, with NYS suggesting "caution".

Most buyers think if they have a buyers agent they have to pay, and they don't have to pay when the agent works for the seller.
The fact is- the seller brings to the closing table the keys and the deed. The buyer brings the money. So the buyer pays the agents.
If the buyer instead of the seller accepted the responsibility for paying their agent, as a client instead of a customer they would have access to the knowledge and judgement of the Realtor. Their is a wealth of information they would have access to when purchasing probably the largest investment of their lives.

Why don't more home buyers employ a buyer's agent to get them the best house for the money?

MOST BUYERS ON LONG ISLAND ARE NOT AWARE OF HOW THEY CAN BENEFIT FROM BUYER AGENCY. THE PUBLIC NEEDS TO BE BETTER EDUCATED ABOUT IT. BUYERS NEED TO SEE THAT IT IS TO THEIR ADVANTAGE TO RECEIVE PROPER REPRESENTATION.

It's a great question! We are Certified Buyer Representatives (CBR) here on Long Island and the truth is the public isn't that much aware on Long Island of the benefits of working with a Buyers Agent. We can represent and work for the buyer in negotiations, as long as the buyer signs a contract with us and as long as we inform the listing office that we represent the buyer before showing a house to them. Any Buyers looking for representation on Long Island can reach us at 631-240-1224 and we will be happy to explain the advantages of having an agent represent you. Thank you...

JR, if a company advertises SA compensation in the mlsli, they are offering sub agency (as you know). If every agent explained the reality of SA by explaining the potential liability to sellers, many sellers would opt for broker agency and buyer agency instead. It's our job to inform, and it sounds as though you do that.

What Realtors don't tell sellers is that when they accept sub agency (a cooperating broker that represents the seller) the seller is accepting potential liability on behalf of the cooperating agent.
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Which is why we don't do SUB agency here anymore, but broker's agency instead. I don't know which agency you are with, Laurie, but I am also on the east end and we don't advise sellers to accept seller subagency but we sign on as broker's agents.

The consumer market in NY has not been educated in the way that other areas are. Not only is buyer agency preferable for the buyer (with the BA agreeing to fiduciary), but SELLERS actually benefit. What Realtors don't tell sellers is that when they accept sub agency (a cooperating broker that represents the seller) the seller is accepting potential liability on behalf of the cooperating agent. With buyer agency, the buyers broker is liable in the event of misrepresentation; in broker agency, the buyers broker (and, if the fault of the sellers agent, the SA) is liable. My question would be, why would SELLERS accept seller agency, when they can mitigate risk by eliminating it? The likelihood of a higher price from a SA is negligable- to expect them to represent the seller (but work with the buyer) is unrealistic.

Ellen Chung wrote:
However, I do know personally of a few instances where the buyer decides to use the listing agent only because by doing so, the listing agent reduces his or her commission since they are double-ending. This helps reduce the final expenses and fees to the seller, which results in convincing the seller to reduce the price a bit for the buyer.
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Which is something we shouldn't be doing.

Well, Glen, your post indicates you are located in Suffolk county. Buyer's agency has just recently started on the East End. As you know, the East End did not even have the MLS till a few years ago. In my experience, buyers now feel they don't want to sign a contract for something they are accustomed to receiving for free. We have to explain to them how if they sign with us, we owe THEM confidentiality, disclosure, etc., fiduciary duties that we will owe the seller if they don't sign with us. Once they learn they cannot get information from us such as DOM, where the seller is moving, why they're moving, etc, unless they have an EBA with us, they will come around. It's a case of does the buyer want both agents on the side of the seller? Do they want us to work FOR them or AGAINST them?

For most buyers it is by mere convenience to use the listing agent--she or he is already there, knows the strengths of the property, knows the weaknesses of the property, knows the sellers personally. They think that they somehow get a better deal at the end because of the personal affiliation the agent has with both parties, the thought that they could on the other hand, be financially harmed by this set up most likely rarely crosses their minds.

However, I do know personally of a few instances where the buyer decides to use the listing agent only because by doing so, the listing agent reduces his or her commission since they are double-ending. This helps reduce the final expenses and fees to the seller, which results in convincing the seller to reduce the price a bit for the buyer. So in this aspect it can be quite beneficial for the buyer to use the listing agent; but in most cases, I would agree that most buyers out there do not understand the fine and beneficial details and services their own agent could provide.

Buyer Brokerage is more popular in other areas of the country. Trends usually start in the forward thinking west and eventually move east. Now that the market is shifting, buyer brokerage will become more popular, even among the most recalcitrant agents.

Buyers do not perceive that having one agent versus another will significantly affect the outcome of their transacation. For buyers, it is far too often simply a matter of who they like, or who was available at the time they needed assistance.

I do wish that our industry put a greater priority on educating the public in this regard. The grass roots level education that is happening at the buyer agent level does help educate a few. Education and promotion of the value of buyer representation on a larger and grander scale would serve the public interest and the industry image.

Deborah Madey - Broker
Peninsula Realty Group, Inc.
New Jersey
(732) 530-7755
Deborah@PeninsulaFirst.com

Roberts answer. Their perception is their reality is so true about all of it. I just pu up a question that uses that observation to explain why I think foreclosures are overvalued not undervalued as popularly perceived.
Bruce: good point about the unscrupulous buyers seeking to cheat their own agents out of commissions. I have a lovely rant about that subject in the question " Must a listing agent show a house to a buyer when buyers agent is on vacation?" I wonder if buyers are suspicious of signing a document that obligates them to pay for services that have traditionally been paid for by sellers, even if it is explained that in all probablility they still won't have to pay it themselves.

Commercial Buyers and Tenants are much more comfortable with the idea of paying for their own represetnation if the seller or landlord wont pick it up.

Glen,

South Carolina just began recognizing Buyer Agency in January of 2005. We have many agents that have been in the business for decades who just don't get buyer agency, so many customers and clients don't understand it either. Many seasoned agents in our area hate buyer representation. The mere thought of it sends them into fits. I was student teaching a CE class, and an older agent got very angry and emotional during a discussion about buyer agency...he flat out refused to entertain the idea and claims he works in everyones best interest. Change is really hard for some people, I suppose. In Upstate SC, our association still allows sub-agency (scary stuff) which was illegal in the last state I worked in. It is really a shame that so many buyers in our area don't realize that the nice lady who showed them homes and wrote up their contract works for the other guy. Even though there are rules stating that an agent MUST explain agency and give customers the agency disclosure pamphlet upon first contact, I see many agents who don't until a contract is signed. Most often I see agents who have buyer's agency contracts filled out along with contracts for sale.

I, personally, don't work with buyer customers. I have a counciling session and explain buyer agency and all that goes with becoming a client before I even discuss properties. Some people balk at having to come into my office before we go charging about town, but they realize the need to do so after a few minutes. I have never had a buyer refuse to sign an agreement with me after our session, and I have never put a buyer customer in my car. I feel that most people want to be represented, but don't understand the difference between customer and client relationships. Once customers are given the knowledge about buyer representation, they won't consider NOT employing an agent to look out for their best interest. I feel that educating buyers AND agents is the key to assuring that buyers get the service and representation they deserve.

Allison Clancy

Even in Florida, where we have strict "no dual agency" laws, there is still quite alot of misconception amongst buyers regarding the role of the Realtor(s) in their transaction. I think this is partly becasue we are such a melting pot of a state, where Mr. & Mrs. Buyer are coming from Ohio, for instance, where the laws are very different. It is, therefore, our role as professionals (as well and especially that of our Boards, whom we pay so much for!), that we educate consumers on the entire process at every given opportunity. It truly is to the most benefit to the consumer that they employ the services of a licensed, seasoned professional!

Long term problem of the buyer thinking because the seller's agent or builder's rep is nice and friendly that they are also representing their interests when in fact they are working against them. The majority of the people I have worked with also feel using a buyers agent will add to the cost of the transaction and that by somehow working without one they'll get a better deal on the house. I regularly have buyers willing to cut out their buyers agent if I am willing to give them a better deal.

Very Good Question Glen -

Our broker has a very very good line....."Their perception is their reality" he goes on to say that as agents we must rfirst recognize this and second work to change it.

Therefor his advice to our agents is.....Work very hard to educate the buyers and show them how it is to their benefit to .......______........in this case, work with a bonified buyer's agent.