The Public Is Watching Us Beat Ourselves Up

On Tuesday, new VARBuzz author Heather Elias wrote a post entitled “Too Bad“, in which she recounted the story of hosting an open house and having buyers do everything they could to avoid conversation at all costs. It’s happened to all of us, I’m sure – and judging by the comments there are a lot of different thoughts on what’s the right approach.

As real-life as it is, there was something else in her post that struck me. She wrote:

I’d hate to think that those buyers are going to end up traveling from open house to open house until they hit upon one that works for them, only to possibly be preyed upon by an agent willing to take advantage of their lack of consumer education about agency and representation.

I’m sure Heather wasn’t inferring that agents who practice Dual Agency are preying upon clients. Candy Lynn made the argument FOR Dual Agency right here on VARBuzz recently, and I can see where she’s coming from given her niche specialty of selling farms. I know Candy, and maybe many of you do as well – I know she’s got her clients best interests at heart, and she makes a good argument in defense of Dual Agency.

Dual Agency has been argued for and against for years, by consumers AND REALTORS®; that’s certainly no secret. Most of those who are against it will say that it hurts the consumer – by having an agent who’s representing both sides, the the consumer is hurt by not having the value of full representation. I thought Heather did a good job of laying out some of the many hats an agent will wear in the transaction – the Market Expert, the Defender of their privacy, the Cheerleader, the Negotiator … the list can go on an on. Dual Agency prevents the consumer from benefiting from the value of full representation. Proponents of Dual Agency might say that by agreeing to Dual Agency, the consumer is waiving their rights to that level of representation, and that’s true. In my opinion though, we have a higher purpose to maintain full representation at all costs. Article 1 of the Code of Ethics reads “…REALTORS® pledge themselves to protect and promote the interest of their client.” (emphasis mine). If that’s the case, then who is the client? Who does the agent serve? Matthew 6:24 tells us “”No one can serve two masters, because either he will hate one and love the other, or be loyal to one and despise the other.”

I’m not trying to bang on whether or not Dual Agency hurts the consumer or not – that’s been covered ad nauseum. No, there’s another group that gets hurt just as much by the practice, and that’s us. You and I. REALTORS®, real estate agents … our entire industry gets damaged by Dual Agency, in my opinion, because it prevents us from providing a fiduciary value to the consumer. If an agent can’t represent the client and provide a solid, tangible value, then all we’re doing is perpetuating the perception that all you need from an agent is someone to unlock front doors. As all of us know, we’ve got a lot of uphill ground to climb as we try to improve an eroding perception of our industry in the eye of the public, and “opening doors” isn’t going to go a long way toward improving that opinion. Ending the practice of Dual Agency and showing clients we’re going to listen, communicate, negotiate and celebrate with their goals in mind – not our own – will do more to repair the damage.

That’s my $.02. The real estate industry has taken a body shot through the practice of Dual Agency, in my opinion, and it’s no one’s fault but our own. If we’d be willing to eliminate the practice, or at least make the decision that on the agent and broker level the practice would not be practiced, it’d be a major step toward showing the public we’re serious about THEM, and not our own bottom line.

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18 Responses to The Public Is Watching Us Beat Ourselves Up

  1. “If an agent can’t represent the client and provide a solid, tangible value, then all we’re doing is perpetuating the perception that all you need from an agent is someone to unlock front doors.”

    Agreed. Our value is in our experience and expertise, both of which are stifled in a true dual agency position. If consumers have a hard time understanding what that value is, continuing to justify dual agency hurts any effort to explain it to them.

  2. Jeremy,

    To me it doesn’t matter if the Listing agent is “preying” on the unrepresented buyer or not. It’s the perception of the consumer, that when something goes wrong and the listing agent says… “sorry I can’t help you because I am represetning both sides” that the buyer perceives that the received less services, than had they used their own agent.

    As much as I like and respect some of the people who have tried to defend dual agency – never – not once have I heard a reason to practice it that convienced me. (This being solely single agent dual agency)

    Even in a speciality market, the Listing agent can help the buyer agent become educated on the process just as easily (if not more so) than educating a buyer. The long term effects of educating another agent are more beneficial, as well, in regards to networking and simply helping another agent.

    There may be times that consumers insist on dual agency, but I have to think that the agent didn’t do well enough at laying out all the advantages of standard agency.

    As the life long holder of the minority opinion, I know that many others think Dual Agency is ok and even preferred. Hats off to you, I full disagree. I don’t concur necessarily that the agent at an open house has nafarious intentions and perhaps “preying” is a poor choice of words.

    I don’t see it going away anytime soon, as it’s legal if the practitioner chooses to do so – more power to them!

  3. Perceived value is the only thing that keeps any industry and set of workers around and employed. Without us having any perceived value, consumers will have no use for us.

    And let’s not get too comfortable folks – I’m sure that there are plenty of people already sitting around trying to figure out ways to “unlock the doors” without us.

  4. Jim Rake says:

    Believe that dual agency may have been an “old school” solution, but, as they say, “times are a changin”….and have been for awhile. Don’t think that’s the “minority opinion” any longer. As the scrutiny of what we do, and HOW we do it, has increased the last decade or so, coupled with more and more open source information availabilty to consumers, we’ve got to avoid the “appearance” of impropriety (an objective dual agent?), dont you think?

  5. Julie Emery says:

    I agree that this may no longer be the minority opinion. And, certainly a lot of the “influencers” in the profession seem to have come to the belief that dual agency does not serve us well. So…how come we’re not doing anything to get this changed? Or is there a move afoot and I’ve missed it?

  6. Jeremy Hart says:

    Julie, that’s a great question! I think that you and Jim are right, the minority has become a more vocal majority, but maybe we’re not there yet. If agents start saying “I will not practice single agent dual agency”, it will continue to gain traction.

    Danilo, good reminder as well. This industry will continue to evolve and change, but the consumer is going to evolve and change even faster. We have to keep up.

    Great comments, I love the folks on VARBuzz!

  7. Schaefer Oglesby says:

    While I would agree that dual agency is legal, from seeing cases come before the Real Estate Board,I think it definitely lends itself to problems. As long as everybody is happy, there is no problem. Just let something jump the track, and see who gets the blame! The dual agent, of course. It sure is difficult to defend yourself in those situations. Just make sure you document everything, and keep your fingers crossed.

  8. Julie Emery says:

    Any plan that requires that I cross my fingers for protection is a little too risky for my taste! LOL! I think I’ll stick to avoiding dual agency!

  9. The real estate industry has taken a body shot through the practice of Dual Agency, in my opinion, and it’s no one’s fault but our own. If we’d be willing to eliminate the practice, or at least make the decision that on the agent and broker level the practice would not be practiced, it’d be a major step toward showing the public we’re serious about THEM, and not our own bottom line.

    My (very limited) understanding of the history of agency is that dual agency is a (relatively) recent phenomenon. That is to say that it didn’t exist prior to buyer representation. I believe that prior to buyer representation, everyone represented the seller — which was probably just as wacky and inappropriate as dual agency. (And perhaps buyers thought they were being represented, and thus there was perceived dual agency.)

    While I agree that dual agency is rarely the best solution for a buyer or seller, I’m not overly critical of our industry based on the existence of dual agency. In my view, the current practice of dual agency is just one step of the ongoing evolution of agency. Consumers are better served today (in my opinion) than when buyers had no representation. If we continue to evolve towards every party having their own representation (thus, no dual agency), we will have made yet another improvement.

  10. Jim Duncan says:

    Jeremy –

    Interesting post. I remain firm in my opposition to single-agent dual agency (even in light of Candy’s convincing argument), but I’ll disagree with you on one point –

    The public doesn’t care. Many still think that the listing agent gets x% (where x is both sides, not recognizing that typically commissions are shared/commingled).

    I do agree with you on this point – the profession is harmed by the continuance of this vestige of sub agency.

  11. Jim Duncan says:

    Darn it I hit “submit” too soon.

    I do find fascinating that an (seemingly) overwhelming majority of Realtors to whom I have spoken seem to agree that Dual Agency is damaging – to the consumer and the Realtors – but there has been no overt opposition to it from either the VREB or VAR.

    Maybe this is something the PPAG could take up? (hint, hint)

  12. Julie Emery says:

    Excellent idea, Jim.

    Anyone on PPAG listening in on this conversation?

  13. Jeremy Hart says:

    Schaefer – you’re entirely right. I’ve done single agent DA once in a very rare unique case for our area, and while everything was as smooth as butter I was never more nervous in a transaction. Had something gone wrong, it could have been very ugly. Never again, I want both sides to have fair and full representation.

    Scott – “Consumers are better served today (in my opinion) than when buyers had no representation.” Absolutely! The elimination of single agent dual agency would go a step further toward serving those clients – and our industry – even more, in my opinion.

    Julie and Jim – I agree that the majority of the public probably doesn’t care. I just feel as if the industry should care a little more.

  14. Schaefer Oglesby says:

    Jim, your comment about the VREB having no overt opposition to it is a matter of policy of VREB. We are a government agency and, as a Board, we take no action on issues unless it directly affects our ability to enforce the laws and regs. I’m sure that all of us have individual opinions on various subjects, and you know how I feel about dual agency, but we, as a Board, don’t take positions.

  15. Frank Huotte says:

    I’m very new to this profession (2 years) and that’s exactly what we don’t have and never will as long as dual agency is acceptable, a PROFESSION! I don’t know how anybody except the money hungry greedy snakes can justify this practice. Let’s face it somebody is not getting full representation. To those greedy people I referred to above by simply saying to the average person, who probably doesn’t understand the process, explain agency to them and if they agree it’s okay, is complete garbage. The average person doesn’t understand much of how things work, just as I didn’t until I went through classes to get my license. I believe the National Association of Realtors should do what ever needs to be done to fix this problem. If that means hurting some politician in the wallet than so be it. If we really want to be considered professionals, like fire fighters, police, military service members, etc then we should act like professionals and that doesn’t mean hoodwinking some unsuspecting member of society. Come on wake up before it’s to late, do what’s right for our chosen field. Have a great day!

  16. Jim Duncan says:

    Schaefer –

    Thanks for the clarification. Regarding the VREB, I was prodding more than anything else. Regarding PPAG – I’d love to see this as an item on the agenda.

    But – what if they did take a position on Single-Agent-Dual-Agency? I believe that this is a case where the public is generally more likely to be harmed than not.

    Much like the VREB’s advertising disclosure regulations that are ostensibly in place (this is my assumption) to protect the public – doesn’t turning a blind eye to the potential damage caused by Dual Agency do more harm than good?

    Just a thought.

  17. Schaefer Oglesby says:

    Jim, after I read your comment I realized that my reply regarding the VREB not taking positions on subjects wasn’t clear. We absolutely take positions on issues where we have the Legislative Authority to write regulations to implement the law. That is the case with the advertising regs.
    The elimination of dual agency is an action that can only be done with a law change by the General Assembly. If that were done and we felt that the law needed more explanation for implementation, we could then write regs to cover that. Hope this clears up my first reply.

  18. Jim Duncan says:

    Schaefer –

    Thanks for the clarification, and the roadmap. :)

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