The relationship between sellers and their listing agents is a complex one. Listing agents are fiduciaries. Both the law and professional ethics obligate the agent to promote the interests of the seller, to put their interests first. This is not always easy. Often, that is simply because, in the case of a conflict, it would not be instinctive to most people to give primary consideration to another. That sort of behavior has to be taught.
But there are other, more subtle reasons, that it is not always easy to promote the client's interests. Frequently, the clients themselves may not know what is in their best interest. This is generally because the client's thoughts may be based on misinformation. Hence, it is often the case that a large part of the listing and pre-listing relationship consists in the education of the seller by the Realtor®.
It's just a fact; principals (sellers and buyers) frequently don't know as much about the market as they think they do. Sellers especially often are acquainted with only a slice of the relevant data -- activity in their own neighborhood. They are liable not to have a good handle on market conditions, and particularly the competition, in the surrounding area. Moreover, they are frequently influenced by the opinions of all sorts of people who, themselves, are not knowledgeable about the market. Another thing for sure: when the topic is real estate, they tend to read the newspapers selectively.
Doing the educating is not always fun. It often requires tact and some very careful phrasing; but it is something that agents owe to those who would entrust them with so much influence over the disposal of substantial assets. Without good information, no one can make informed decisions. Whether an agent is referring to Article 1 of the Realtor® Code of Ethics, or simply to the Golden Rule, they need to ask: "What would I want if the roles were reversed?" It wouldn't be simply to have an agent go along with whatever wrong-headed idea we might have. It would be to be given the information on which we could base a good decision.
The relationship between listing agent and seller can also be strained, because the agent has other obligations as well as that of promoting the client's interests. Article 1 of the Realtor® Code of Ethics also obligates agents to treat all parties to the transaction honestly. Believe it or not, some sellers have actually wanted to mislead buyers about various matters.
Additionally, agents have both ethical and legal obligations with respect to disclosures. More than one seller has felt that the listing agent was almost acting as an adversary, because the agent was insistent on fulfilling disclosure obligations to the buyer.
To be sure, there is an educational element to this too; and most sellers are able to see that it is in their long-term interests to comply with disclosure requirements. Some, though, would prefer to take their chances with that part, and may even insist that their agent not disclose something that should be disclosed. In such an instance, there is little for an agent to do but to resign from the agency relationship.
Finally, in considering the complex relationship between sellers and their agents, there is the on-going irony in the real estate business that many seasoned agents employ, and many new ones are taught, a variety of dubious ploys and stratagems that are designed to induce a seller to list with them. Whether it's, "We have a buyer [or, "buyers"] for your home" or "Highest price guaranteed," too often the tag lines don't mean exactly what they appear to mean. And, though, when once fully explained, they may not constitute falsehoods, they are, to put it bluntly, tricks. And what could be more ironic than that -- that one would employ a trick in order to induce another person to let him become that person's fiduciary?
Agents should be as ethical in the process of trying to acquire a listing as they are obligated to be once they have it.
