Dual Agency, standard agency, limited service, independent contractor, Realtor, agent…do these terms mean much to you? Are you aware that your agent may not be a Realtor or that your agent may not even be your agent?
EVERY real estate agent, possesses a license by the state they practice in. There are licensing laws everyone has to adhere to and there are ethics that in all cases a Realtor has to adhere to which in many cases raise the bar even higher. Belonging to local/state and national Realtor associations comes at a price and level of service. That’s not to say that an “agent” cannot employ those standards, but there is no obligation to do so or consequences if they don’t.
Now, with that background, onto my story. I have a vacant lot listed for sale and I am an Associate Broker Realtor. My seller agreed t a listing price of $239,000. There are hundreds of vacant lots on the market and this was a price that seemed plausible to ask and to generate interest. It was not a give away price for a vacant lot and the market is very good for home sellers, not so much for vacant lot sellers. I represented the seller only when I listed it and owed them standard agent loyalties.
A customer called in on Sunday of Thanksgiving weekend and after a short conversation expressed that he wanted to write an offer. Prior to that I could answer his questions and do whatever I could to “sell” the lot. At the point he said he wanted to write an offer, my obligation shifts to “disclosure”. Not because my license requires that, but my Realtor status does. I explained I could write his desired terms and present it to the seller still representing my seller as a client and him as a customer. I explained the dual agency relationship, as well as that of an independent contractor. It was clear he understood the options, but I said I didn’t want to do any of that, in fact wouldn’t. I suggested I could have an agent call him to be his standard agency and to perform those duties for him that I was doing for the seller. He had a Realtor friend who could do that for him which was fine with me, but that little bug in my ear said, did I just harm the seller by not writing the offer when a buyer said he wanted to write? I didn’t believe so, trusting that I did the right thing for me and him. Click here for your realtors role. Virginia has a made it a law that a brokerage relationship must be written and signed.
We ended up receiving the offer on Sunday night so the buyer was clearly motivated and ready, and wrote a very desirable offer. However, another agent also called Sunday to say we might be receiving another offer Monday morning. So we held off on answering the first offer until we knew. Low and behold Monday we received another offer-again, very desirable. Now I knew I had done right by the seller in providing the buyer their options and standing only with my initial client. The process went through notifying both agents that we had multiple offers and asking for highest and best offers which they both provided.
In the end, the seller accepted an offer of $271,500-$32,500 higher than their asking price. Had I gone ahead and written the offer for the “customer” on Sunday night, both buyer and seller might have been satisfied. But what would I have done when the second offer came in? Who would the buyer or seller think I was working for during the process. Would my “client” be concerned I might be negotiating for the “customer”? In the end, I had one client and one role-represent them in a legally competent manner, and hopefully get them the most we could for the sale.
It’s a very difficult situation for sure, but the way it went down, I had no trouble sleeping at night. I represented my client very well. I left both other Realtors with a very positive impression of how I handled the multiple offers. The customer I believe he appreciated the fact I explained agency to him and his options, even if it did cost him more in the end. But that was caused by another buyer, not me. He might have questioned my motives if I had to go to him to compete with another offer.
There’s a lot that goes into what an agent or Realtor must do for “clients” and can do for “customers”. Only a professional can help with that, and only someone with lots of experience will know enough to objectively and expertly guide people through the process!
Filed under: Buyer agency, Buyer and seller representation, Homes for sale, Investing in Real Estate, Williamsburg area information | Leave a comment »