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Category: Marketing (page 159 of 191)

November 20, 2006

Dual Agency Smack-Down: A chicken in every pot and a sword for every Gordian Knot . . .

by

Suburban Phoenix Real Estate Broker

Author website

I solved this problem today. It wasn’t even that tough, once I started looking at it the right way.

As I pointed out earlier today, the issue is this language in the AAR Consent to Limited Dual Representation form:

neither Broker nor Broker’s Licensee(s) can represent the interests of one party to the exclusion or detriment of the other party [emphasis added]

What that language says, in my opinion, is that no Arizona brokerage that has undertaken Disclosed Dual Agency using that form has done so in a way that would withstand the questioning of a plaintiff’s attorney.

I believe it is impossible for any brokered real estate transaction to close according to the strict terms of that language. Instead, every Arizona brokerage that has undertaken Disclosed Dual Agency using that form has routinely, repeatedly and serially acted in ways detrimental to both buyers and sellers, each in their turn, throughout every one of those transactions.

This was not malicious. To the contrary. The Disclosed Dual Agent was acting in the best interests of each client, each in their turn, and each of those clients had an absolute veto power over everything that was done at each step of the process. The problem is simply that a brokered real estate transaction is too complicated to be effected without expert advice. In tendering that advice, in all good will, the Disclosed Dual Agent will have acted to the detriment of the other party every time he gave good, solid, useful advice to the party before him.

(I will concede for the benefit of quibblers that someone could try to deliver the type of completely prostrate, advice-free “service” required by that language, provided that the quibblers will concede that both buyer and seller fired their prostrate agent as soon as they apprehended the type of “service” they were to receive. In other words, the conduct required by the form is theoretically possible, but it has never, ever happened.)

Here’s the cute part, though: The actual problem is the form itself.

The statute law of Disclosed Dual Agency (A.R.S. ? 32-2153(A)(2) (“Acted for more than one party in a transaction without the Read more

November 20, 2006

Dual Agency Smack-Down: Collective truth? Fifty million Frenchmen can be as wrong as one . . .

by

Realtor, Staging Consultant

Author website

I doubt that even Jeff realizes this, but I am the provocateur of the Titans’ duel over the pros and cons of dual agency. It started when Greg and I met Russell Shaw. The man is a font of knowledge, and he’s very very generous with sharing the “secrets” to his success. Already we have been enriched by his friendship. As we discussed the different aspects of our industry last Tuesday night, conversation led to our stand on dual agency, which I am largely responsible for.

Dual agency has not even been an opportunity for me yet… so far I haven’t had a buying client who would have been interested in any of my listings. But I’ve seen Greg serve as a disclosed dual agent, and as promised by Russell and Jeff the successfully closed transactions were probably more successful for his clients because Greg handled both sides. In all but one of the cases I can think of, the buyers and sellers were investors. The exception was with an extreme pet lover who needed an agent to find her a buyer without using the MLS (someday Greg will have to write this Realty Reality story). But then we had the dear friend failure and when we evaluated the philosophy of dual agency, we established our No Dual Agency policy.

This policy has not been easy on us. It certainly hasn’t given us a market advantage, because the typical home buyer or seller doesn’t pay that much attention to the philosophy of our industry. In fact, we end up shedding prospects who come to us through avenues that other brokerages use to drum up new clients. When I hold open houses in areas where open houses actually bring in potential buyers, I always try to find an agent from a different brokerage to sit the open house with me, so that agent can try to turn visitors into clients. When we get sign calls, we’ll show the house, but when the prospect starts making buying signs, we’ll suggest that they get an agent to represent them or offer to refer them (and we Read more

November 20, 2006

Dual Agency Smack-Down: Interlineal chatter . . .

by

Suburban Phoenix Real Estate Broker

Author website

This is from the AAR Consent to Limited Dual Representation form:

The Broker now represents both Buyer and Seller and both parties understand that neither Broker nor Broker’s Licensee(s) can represent the interests of one party to the exclusion or detriment of the other party.

The important word is “detriment”. I think the argument I posted yesterday eats that language entirely. The implication is that any dual agency that makes it before a judge will lose. There is absolutely no way to comply with that language. The only method even conceivable is to leave both parties flailing stupidly like FSBOs and BUBBAs.

But: We do end up with an excellent argument against FSBOs and BUBBAs: There is absolutely no way non-professionals can achieve professional-quality results in a real estate negotiation. They simply don’t know what to do, and they don’t even know that they don’t know it.

I’ll summarize later, but I think my own position is quite a bit stronger than it was on Friday. I do have ideas for alternatives, and I’ll go through those as well.

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November 20, 2006

Dual Agency Smack-Down, how about sub-agency?

by

Mega-Producing Realtor

Author website

It has been said that democracy is the worst form of government except all the others that have been tried. – Sir Winston Churchill

Thank you to Jeff for responding SO well to Greg’s points and issues. I do understand Greg’s points and in a perfect world – almost everything he has to say is just fine. We don’t live in a perfect world and I don’t expect to anytime soon. All of the various arguments about single agency seem analogous to a single agent describing how his service is better than mine because he – and he alone – is going to be the only person to respond to his buyer or seller. When they deal with me it is set up more like an assembly line – with different individuals taking care of each of the different aspects of taking care of the client.

Who is right?

Well if the single agent has only the one customer or client and is willing to devote all of his time to that client, then he is right. I’ll not spend a lot of time pointing out how this is not a viable business model.

If that same agent has just one additional client or customer he now can “have a conflict” concerning his two clients. Say client # 1’s house just got a sign call and there is a buyer who wants to see it right now – and client # 2’s property just had an offer written on it and the other agent wants to present that offer right away. The single agent is only offering single agency to both of those sellers so he does not need to worry about agency conflicts.

Just add one new customer into the mix and there is the potential for conflict. So, why do I bring up SUB AGENCY? Isn’t it the most awful thing to ever have happened in the history of the world? Not really. And you might be surprised at what actually killed the beast – it wasn’t the “single agency issue”. I am blessed to live in Phoenix (for a vast number of reasons) Read more

November 19, 2006

Dual Agency Smack-Down: Fear Of Perception Breeds False Logic

by

Real Estate Investments Broker

Author website

First of all Greg, my wife’s cat now officially hates you. Today it was hazelnut. Reintroducing yourself to Russell was perfection. 🙂

But on to persuading the unpersuadable. Galileo faced down the most powerful institution outside of government that insisted the earth was the center of the universe. The church was terrified of the perception that what Galileo said seemed to contradict the Bible, which of course it did not. The church just recently apologized for its actions – and only centuries after schools first began teaching fourth graders that Galileo was 100% correct.

Principle – Perception may be ‘reality’ to a thirsty man in the desert, but the water still isn’t there.
Principle – False logic will always eventually be proven as such. Thirsty man discovers this by way of a mouth full of sand.
Principle – When the universe in which you operate disagrees with you – it’s possible you might be mistaken.

Gravity, when applied, works every time. However, much like dual agency, the consequences of applied gravity are not always desired. If I jump from a two foot ledge I’ll probably survive. If I fall or am pushed from the balcony of a 10th floor office window I probably won’t. Gravity is ruthlessly consistent. The consequences of its use are universally predictable. The apple, no matter how many times it falls from the tree, will never fall up.

The ‘angelic’ school of dual agency has its foundation in a false premise. The man who either accidently fell, or was pushed from that window either accidentally caused his own death, or was murdered. Gravity, like dual agency, has no will of its own. There are infinite examples available illustrating this. I’ll use just one.

You may use a gun for target practice. Or to acquire food through hunting. Or to avoid your wife getting half of your net worth. The gun didn’t do any of those things. The person shooting the gun did them. That’s a principle, and the gun doesn’t have an opinion. Even when my wife kills me accidentally while cleaning her gun, am I not just as dead as the murder victim?

Greg Read more

November 19, 2006

Dual Agency Smack-Down: If being a big brokerage is an inherent agency violation, it’s not the client’s fault . . .

by

Suburban Phoenix Real Estate Broker

Author website

Please. Recognize that everything I say or write is true and do not argue with me. Thanks!

Hi! Welcome to BloodhoundBlog. My name is Greg Swann. I question everything. 😉

From my point of view, we’re still not getting any traction.

But single agency is not a viable business model.  Period.  A viable business model is one that would allow for unfettered growth (as long as it was filling a need to the consumer) and single agency is not possible if a company grows.

Without intending to quibble, agency is not about the vendor, his business model or its potential for growth. Agency is about the interests of the client, which are paramount to all others. If a particular business model violates agency, then, as Russell argues very cogently with respect to Redfin.com, it is criminal in se in states where agency is a fiduciary obligation.

There are about 925 agents with John Hall & Associates.  It would be quite stupid to preclude them from showing a listing so the seller (and buyer) gets the “benefit” of single agency.

This is not an argument against dual agency. It is an argument for getting rid of the broker/salesperson licensing laws. If we did that, then every listing agent would be alike unto a self-employed broker now. Dual Agency would still be possible, but it would be much easier to manage, since it could only occur when the agent represented buyers to his own listings. Major brokerages like John Hall could easily transition to affiliations or companies, instead — same cost structure, but no liability. We would still have to police for other forms of collusion or shady dealing, but Dual Agency would be all but eliminated.

In any case, arguing that refraining from Dual Agency would be impractical is not a persuasively-valid reason to uphold or reject it. As before: Sub-Agency was much more practical than Buyer Brokerage, but we got rid of it anyway.

The idea that the agent somehow controls what a buyer will pay and what a seller will accept only indicates a disconnect from reality.

I think this is a very weak argument. I want to deal Read more

November 19, 2006

Reagor-mortis? On-the-spot real estate news coverage only a few weeks late . . .

by

Suburban Phoenix Real Estate Broker

Author website

October 26th: NCRC files specious complaint against Zillow.com.

November 19th: Crack Arizona Republic real estate reporter Catherine Reagor yawns, burps, goes back to sleep:

The popular Web site zillow.com gets a lot of hits as people frequently check the values of their homes and their neighbors’ in the fast-changing housing market.

But not everyone agrees with Zillow’s figures. I have received several calls and e-mails from people questioning its data. The National Community Reinvestment Coalition agrees. The Washington, D.C.-based non-profit has filed a complaint with the Federal Trade Commission saying Zillow’s home-valuation tool is inaccurate.

Further deponent sayeth not.

Reagor was in love with Zillow when it was brand new, but this was because she hadn’t bothered to test it. The idea of reporters actually checking things seems to have died with Hildy Johnson…

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November 19, 2006

Dual Agency Smack-Down: More endless agency

by

Mega-Producing Realtor

Author website

First, as much as Jeff and I genuinely like Greg and appreciate his having us here in his cyber home – he is simply wrong-headed about all this agency stuff.

I don’t believe that Jeff is an angel and I know I’m not. But single agency is not a viable business model. Period. A viable business model is one that would allow for unfettered growth (as long as it was filling a need to the consumer) and single agency is not possible if a company grows.

I remember having an attorney for my client (he was a home seller) and when gave him the “Consent to Dual Agency” form to sign he handed it back and said he would not sign it. I asked him if he wanted his home sold for the highest price in the least amount of time. He answered “yes” that he did. I then asked him if he would like me to refuse to show his home to any of the hundreds of past clients of mine who might want to buy a house like his and if he would also like me to put in the MLS comments that NO JOHN HALL AGENT MAY SHOW OR WRITE AN OFFER ON THIS LISTING?

As he was a lawyer and did understand exactly why I asked him those questions he took the form from my hand and signed it.

There are about 925 agents with John Hall & Associates. It would be quite stupid to preclude them from showing a listing so the seller (and buyer) gets the “benefit” of single agency. What drug do Realtors take (and the lawyers and judges) that makes them even think that THEY control what the buyer or seller are going to do?

The argument I just love is the price issue. Go ahead and make all the low-ball offers you want. “Help” your buyer by writing loads of them. Try it on one of my listings and see how much it “helps” your buyer. I find that most buyers and sellers have a pretty good (and firm) idea of what they will pay for a Read more

November 19, 2006

Redfin Again

by

Mega-Producing Realtor

Author website

Trevor Smith writes (and I respond):

Your comment about Redfin is not only ignorant it is probably borderline libel.

Please feel free to pass my comments and my contact information along to them.

Do you even know exactly what services Redfin does or does not provide?

No. What I do know is that they are attempting to build a business model based on the buyer finding the house themselves (in many cases seeing it via the listing agent) and then going to Redfin to have them write the contract.

Redfin is not doing much less than your typical traditional agent, and they are providing their customers thousands in refunds… hmmm sounds like a great business model to me.

In most states there is a little issue called procuring cause. Here is how Redfin handles it – per their website.

If you are referring to the fact that they do not show their buyers prospective properties, this is no longer true either. So, as far as I am concerned, praise God for Redfin and other discounters who are awakening America to the fact that REALTORS are overpaid.

Your email address would seem to indicate that you ARE an agent with John L. Scott (known to be a highly successful and very reputable full service company) so truthfully, I do find it a bit odd that you choose to praise God for Redfin.

The part that would not align with your own long term survival is your belief that Realtors are overpaid – if in fact, you are one. The FTC monkeys (I believe I originally referred to them as “Howler Monkeys”) share your belief – so you aren’t alone on this point. Additionally, you state that Redfin isn’t doing much less than the typical traditional agent. Yes they are – they are not really performing the vital functions of any traditional buyer agent: taking the customer from the initial contact all the way through to the closing. They are asking the buyer to go and find the house and then “give us a call and we will write it up for you”.

I have no quarrel with any agent Read more

November 19, 2006

Dual Agency Smack-Down: Dueling angels are not persuasive . . .

by

Suburban Phoenix Real Estate Broker

Author website

I’m not really a Jesuit, I just play one in the blogsward. My mother had had enough of the Church before she went to high school, and, in consequence, I was sent to public schools. Those were actually quite a bit better then than they are now, but, even so, I bear my ignorance as a curse. I am too much aware that I am too much unaware, and every effort I make to correct this deficit serves only to deepen it. This is why I spend so much of my time crouched by Brother Quintilian, learning evermore to learn, to make up for my failure to have learned in the first place.

Say what?

In short: I am unswayed.

I have not heard what I consider to be a persuasively-valid argument in support of Dual Agency. Counting Our Lady Ardell in a comment, we have three testaments to personal integrity, and these I do not dispute.

But: So what?

The question is not: Can very trustworthy people effect Dual Agency in a way that occasions no overt objections from their clients? Surely this is possible.

The question is, rather: What policy should obtain in the absence of a presumptive angelitude?

The question is: Taking account that a certain percentage of licensees will be stupid, untrained, avaricious, uninformed or openly larcenous, what policy best protects the interests of the consumer — the alleged justification for our licenses?

Russell Shaw raises a lot of side issues that really don’t have anything to do with the debate. He gets quite a few of these sideways, in my opinion, but we can save those debates for other days. The meat of his argument is here:

My seller WANTS ME TO SELL THEIR HOME TO A BUYER I ALREADY HAVE – this is THE very thing they are hiring us to do.

That is: Dual Agency is valid because sellers want it. We turn to Quintilian, who advises us that, by this reasoning, Sub-Agency is also valid. Sellers want it, and many of them don’t truly understand that they no longer have it in Arizona.

Why don’t they have it? Because as much as sellers might Read more

November 18, 2006

Dual Agency Smack-Down: Bullied By Perception

by

Real Estate Investments Broker

Author website

Thanks to Greg Swann for his gracious invitation. Posting on the 900 pound gorilla known as Bloodhound is a feather in anyone’s cap. I’m not sure there’s more than five sites in the country creating more ripples than he does. You set the bar pretty high Greg.

Before I begin – God bless Russell Shaw. Until he came along I almost always felt like the Lone Ranger on most subjects the real estate blog-world considered earth shatteringly important. I’ve enjoyed his posts on various subjects, and have found myself wondering if my dad had another son he never told me about. Anyone who has ever read my comments on blogs discussing the latest ‘hot topics’ will easily discern how much he and I agree with each other.

Buyer representation? National MLS? Dual agency? NAR for heaven’s sake? Give me a break. Until I became a blogger I was both ignorant and apathetic about what opinions were held by others in the industry on those subjects. The only thing that has changed is the entertainment I sometimes enjoy while reading about them.

I read Russell’s dual agency post and laughed so hard I spewed my morning coffee all over my wife’s cat. He absolutely nailed it to the wall. Remember the Clint Eastwood movie, Suddent Impact? That was Russell’s way of saying, “Go ahead, make my day.” But, I was invited to post my take on dual agency, and I’ll do that now.

In the 1960’s I worked for a real estate firm that had six offices and give or take 40 agents. About 75% of the agents were full time. In the two years I was the janitor, and printer (mimeograph) of new listings, they closed over 1,000 transactions – 100% of which were dual agency sales. (Quick, get Greg a chair, he’s looking a little pale.) That same firm also escrowed the sales. And if an agent was caught showing another broker’s listings, he was fired on the spot. The company’s broker/owner didn’t cooperate with outside brokers – as policy. How could that work you ask? His company always had more listings under $20,000 Read more

November 18, 2006

Saturday morning links . . .

by

Suburban Phoenix Real Estate Broker

Author website

Todd Tarson goes flat fee for buyers. I’ll be interested to hear how this flies in the high desert. Inlookers, Mohave County, where Todd works, is boom country. The new bridge over the Colorado is expected to turn the SR-93 corridor from Kingman to the river into bedroom communities for Las Vegas — which is running out of land. You might consider giving Todd one day of your Vegas vacation to take a closer look.

Greg Tracy at BlueRoof.com asks: What if Zillow Got Serious? Indeed. This is what makes Fidelity’s half-baked AVM interesting, actually. They already have the title farm, and they already have the Realtor relationships. This could be fun…

Jay Reifert, a true buyers-only agent in Madison, Wisconsin, sent me a link to a form buyers can use to cling to their unrepresented status. Jay has a lot more at his real estate reform web site.

RSS Pieces advises us that it is a myth that stand-alone web sites for listings drive traffic. This is probably true in the large. It is certainly false from an incremental and long-term perspective. But the real point is: So what? The purpose of a discrete web site for a home is not to drive traffic but to sell that house. Do they work? Oh, good lord, yes! Lately, I’ve read a number of tone-deaf observations on this subject, and I don’t know if the writers just don’t get it or if they’re playing dumb to rationalize playing it cheap. Here’s how you do this: You have a summary listing on your main web site, just like everyone else, except that the summary links to the stand-alone site for that particular listing. Now you have searchability at your main site and a link back from the satellite site, marginally improving your Page rank. More importantly, you have knocked the socks off your seller, your prospective buyers and the entire neighborhood. We sell to people, not Google. Don’t forget.

The Phoenix Real Estate Guy has a new “Ask the Lenders” feature, which I think is a rockin’ idea.

And: Jim Cronin at The Real Estate Tomato asks: “Who Read more

November 18, 2006

The headline buried in the “news”: Real estate agents are as safe as houses!

by

Suburban Phoenix Real Estate Broker

Author website

It’s Saturday, and you know what that means. If the Arizona Republic doesn’t piss all over the real estate business, someone might accidentally go out and buy a house.

Here’s the scoop:

Complaints against real estate agents are on the rise, with consumers accusing them of everything from selling property without a license to cutting corners to make a sale.

As of June, the number of complaints opened with the Arizona Department of Real Estate had jumped 53 percent since 2003, the year before the housing boom took the Valley by storm. Complaints forwarded for discipline increased 150 percent in that same time.

If those numbers sound nebulous to you, you’re reading too carefully. Stop that!

Part of the spike in complaints reflects the rush of new agents who flooded the market to take advantage of the housing boom of 2004 and 2005.

Does it? Is there a correspondence of complaints to new licensees? If there is, it’s not demonstrated in this story.

The number of new brokers and agents rose 38 percent in the past three years, well behind the pace of complaints.

New brokers aren’t new licensees, so the correlation is even smaller than intimated.

Here’s a real number, though:

Most of the complaints come from consumers. Others come from agents complaining about other agents or governmental jurisdictions reporting what they believe are illegal subdivisions. In all, 1,620 new complaints had been opened with the real estate department through the fiscal year in June.

There are 90,000 real estate licensees in Arizona. About 90% of ADRE complaints are dismissed without action. With the right microscope, this “news” is a conflagration.

The top three complaints: License violations, convictions or failing to disclose a conviction, and advertising violations. Real estate advertisements must list the name of the broker that the salesperson works for, according to the department.

And these would all be complaints brought by the ADRE or other agents, not by consumers.

Elaine Richardson, the state’s real estate commissioner, said she was alarmed by the trend of new complaints exceeding the number of new brokers and agents.

“If we don’t get a handle on it, that brings us back to people getting bilked out of Read more

November 18, 2006

Dual Agency Smack-Down: An Argument FOR Dual Agency – part 1

by

Mega-Producing Realtor

Author website

This is a stupid subject. This is a necessary subject. There are a lot of different viewpoints on this subject. A lot of the viewpoints that seem to matter came from lawyers, court decisions (judges who are also lawyers), and other people who are also wrong.

Back in the days when it was sub-agency only and I took my sister, Diane out to find her a house to buy I was representing each and every one of the home sellers whose property I showed to my sister. I was not legally representing my sister, Diane – I was legally representing various random strangers (most of whom I never even met). Did it make sense back then to have it be required by law for me to disclose my relationship with my buyer to “my seller”? Yes. Today, agents are still required to disclose their relationship to the buyer? Why? Who is now being protected by this disclosure? If I take a listing now to sell Diane’s house am I going to give her “better agency” than I do my other clients? But I still have to put in the listing my relationship with Diane. Same deal if I were to sell her a house today. But today she would be my “client”, either as a buyer or as a seller. Who we represent is already a disclosure issue. This is just one example of the nonsense that passes for “important agency issues”.

The seller used to pay all the commissions directly. The listing signed by the seller via the listing broker required the seller to pay them – but that payment went directly (in a legal sense) from the seller to the respective agents (via their brokers). This was changed here in Arizona some years back to having the listing broker being made responsible for paying the selling (cooperating agent) bringing the buyer to closing. This was designed to prevent the seller (and / or buyer) from including the agents commission amounts as part of their offers or counter offers.

So I list a house and the seller agrees to pay me “X” amount Read more

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