buyers who call listing agents
Buyers Who Call Listing Agents Now Have More Ways to Sue Dual Agents
Who isn’t looking for more ways to sue dual agents in California? I hear from a lot of real estate clients around the country who are upset with their agents, and many of those complaints center on dual agency. They read an article I wrote about dual agency or contingencies or some other legal matter in real estate and call. In case you don’t know, in simple terms, dual agency occurs when the seller’s agent is also the buyer’s agent. This is when sellers find out too late that paying their own agent to represent a buyer might not be in their best interest. Or, buyers discover that trying to manipulate a listing agent into divulging confidential information may have backfired. By attempting to buck the system, buyers may end up with no agent advocating for them.
The new document that will most likely cause more lawsuits by encouraging parties to sue dual agents in California is the revised Agency Disclosure. Its formal name is Disclosure Regarding Real Estate Agency Relationships. I say this because I know from observation how lackadaisical many listing agents are. So many just don’t consider ramifications or cause and effect much less consequences. In fact, it is so tough to be a dual agent that I prefer to pass on it.
Dual agency is not good for sellers nor for buyers and the only people who think it is are the dual agents themselves. Further, the main reason dual agents like dual agency is because they make twice the commission. No wonder some consumers hate real estate agents. It’s rare that dual agency is better for the parties. Usually the opposite.
New language in the Agency Disclosure sets out pretty clearly the confidentiality requirements. Agents are always required to keep this sort of information confidential (without written authorization), but in dual agency, they sometimes forget. Below is the verbiage, with the new changes in bold:
“In representing both Seller and Buyer, a dual agent may not, without the express permission of the respective party, disclose to the other party confidential information, including, but not limited to, facts relating to either the Buyer’s or Seller’s financial position, motivations, bargaining position, or other personal information that may impact price, including the Seller’s willingness to accept a price less than the listing price or the Buyer’s willingness to pay a price greater than the price offered.”
Agents are often made privy to confidential information about why sellers are selling, which is none of anybody’s business but the seller. This reduces dual agents to pretty much transaction facilitators. They can’t represent either party very well. The downside is buyers might think they don’t need representation but they certainly do. Never had a buyer say, “oh, we didn’t need you guys.” Just not gonna happen.
But what will happen, mark my words, is more parties will decide to sue dual agents because the agents will, without hesitation, disclose confidential information. I know this surely as the sun sets in the West.
Stopping the Unethical Behavior of Sacramento Realtors
There are some people in this industry, like me, who really feel the pain when presented with the unethical behavior of Sacramento Realtors. Not every Sacramento Realtor, of course, is unethical. Far from it. In fact, it is a small handful of agents who are loose with their ethics. But the disturbing aspect is they know they can get away with it. There is nobody to stop them. Not the Sacramento Board of Realtors, not the Ethics Committee and most certainly not the Realtor Code of Ethics. Even brokers seems reluctant to confront the behavior.
Although I have been toying with the thought of approaching the DRE. I simply feel like when we hear about the rare incidences of unethical behavior of Sacramento Realtors that we owe a duty to the industry to say something. Otherwise, we become part of the problem.
It starts when a buyer calls to reiterate a conversation held with the allegedly unethical listing agent. The agent promises the buyer offer acceptance, but only if the listing agent double-ends the sale. Even though the agent has multiple offers from other agents as well. But lo and behold, all of a sudden the dual agency offer gets accepted. No surprise there.
First, this unethical behavior of Sacramento Realtors drives a wedge between consumers and exclusive buyer’s agents. Agents are not supposed to swipe another agent’s client. Second, it deprives the seller of the right to counter all of the buyers. Possible dishonest dealings with the selling agents. Third, it appears to openly violate the listing agent’s fiduciary to the seller. Is it possible the seller could have made a higher profit if bidding from all buyers had been allowed?
The thing is an outside party can’t prove it. The buyers probably don’t want to get wrapped up in an ethics case and will most likely vehemently deny the conversation even took place. All they want is the house, and they don’t care how they obtain it.
In this particular situation — of which I am not a party, btw, this is third-hand information relayed to me — it gets worse. The agent whose buyer got snatched through the unethical behavior of Sacramento Realtors was at a sewer inspection. As this coincidinky goes, the agent overhead a conversation from the sewer inspection guys talking about the unethical behavior of Sacramento Realtors. Sewer guys admitted an agent asked them to falsify a sewer report. Who was it? The very same agent who purportedly broke fiduciary.
It’s pretty bad when even the sewer inspection guys call that agent unethical. How low can an agent go? And what can be done about it? It makes a person lose faith in her profession when this kind of crap is allowed to continue without consequences. It takes years to build a solid reputation in Sacramento real estate and only seconds to ruin it. Perhaps we can hang our hopes on what comes around, goes around. Bound to be karma.
Agents don’t openly talk about this sort of stuff in real estate because they don’t want to be tainted by it. Further, the public has enough problems with trusting agents as it is. But please know it is rare that this happens. It is definitely not the norm for Sacramento real estate. Not something agents with the Elizabeth Weintraub Team would ever do.