As I read some of the postings on the Real Estate Forums and listen to those in class talk about agency relationships, I have to ask: “Is it any wonder the public is turning away from us?" What follows is an overview of what I am talking about.

It is in my opinion, very common for many in the real estate industry to put themselves and their own agenda well out in front of the needs and expectations of the client. I see a lot of exchanges between agents that clearly put their clients in the second seat. When a buyer’s agent makes a comment along the lines of: I make sure to put into the contract that I am to be paid X% or some amount of dollars by the seller or their agent. I flinch every time I see it as the Code of Ethics is pretty clear about keeping the negotiations for commissions out of the contract. The agents are not a party to the contract, so why does that stuff show up in the offers?

Not to single out the buyer’s agent, it is not uncommon for the seller’s agent to place some sort of demand on the buyer’s agent to attach the buyer broker agreement to an offer. What business is it of the seller’s agent concerning the contract between the agent and their buyer? Would a listing agent submit the listing agreement for the buyer’s consideration? Of course not. Again, the Code of Ethics frowns on such conduct. I for one feel that is a direct interference with the agency relationship the buyer’s agent has to their client.

One of the most common problems out there is the issue of the buyer’s agent presenting the offer. Seller’s agents for some reason resist the presence of a buyer’s agent to unrealistic proportions. Why? The probability of the seller accepting an offer when it is presented by its originator is increased many times over. How can the listing agent respond to the simplest of questions their client may have about the buyer or some term within the offer? That agent has probably never met with, spoken to or dealt with the buyer at any level, so many of the questions go unanswered or assumptions are made to the detriment of the buyer. Conversely, it is time for the seller’s agent to make the presentation of a counteroffer for the same reasons.

Before I go on, lets try and put this into some sort of perspective. If you were ticketed for a minor accident and you feel you were not at fault, it is reasonable that you would hire an attorney and present your case before a judge and jury. So you hire an attorney and after several weeks of preparation, you trial is tomorrow at 9:00 AM.

The problem now is that you just got off the phone and your lawyer told you that he couldn’t appear with you at your trial because of a conflict in his schedule. He assured you however that he has discussed your case with the City Attorney and your case will still be presented to the Court by the prosecution.. How would you feel? Did you receive quality representation?

Our buyers and sellers reasonably expect full representation, which in my opinion includes presenting their offer or counteroffer to the opposing principal. That does not suggest that the buyer’s agent has any rights to remain with the seller and their agent while they discuss the offer.

Isn’t it time that we simply relax and deliver a service within the expectations of the client? Isn’t it time that we lower our defenses against each other and work with each other to the benefit of the client and not ourselves?

Of the 30 or 40 cases I have worked as an expert witness, well over 95% of them involved some sort of a breach of duty by the agent. And yes, there were instances where the scenario I have laid out here was part of the problem. The cost of litigation today is huge and E & O doesn’t just sit back and write checks anymore. One trip to court could wipe out the last fifty or sixty commission checks. Tilt!

Published: May 16, 2000

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"Cec" Daniels, GRI is one of the nation's leading authorities and speakers on risk management, brokerage management, agency and real estate contracts. He has authored and maintains all the curriculum for the Arizona REALTOR Institute GRI Program on Agency and Contract Law. His expertise is supported with over thirty years of experience, and in 1996 was named Educator of the Year by the National Association of REALTORS®. Cec lives in Peoria, Arizona and invites you to email him at Cec@CecDaniels.com.