This article titled: Double Ending the Short Sale vs Giving the Seller Highest and Best Shouldn’t Be a Dilemma, was written by Elizabeth for another publication back in the sorry years. Enjoy. — JaCi Wallace
Many Sacramento listing agents are receiving multiple offers, and not just on REOs or short sales. Any attractively priced, well appointed home in a desirable Sacramento location is likely to draw the attention of more than one buyer. The listing agent plays an important role toward helping the seller figure out which offer to accept because the highest offer isn’t always the best offer.
The process I am about to describe to you, how to double end a listing without listing the house, is not something your broker’s legal team will want you to read about. I am not promoting this particular system as much as sharing stories that happened to me 40 years ago when I first started selling real estate. Many of our activities back in the 1970s would have lawyers today running for the closest bottle of scotch.
Yup, today this would involve practicing risk management on overload. Legal liability up the wazoo. Yet, I’m gonna tell you anyway, because that’s just the kind of person I am. A troublemaker. With a capital T that rhymes with B and stands for bad influence.
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.”
People tend to believe that all agents are the same, but the owner of 4800 Westlake Parkway knows better. She bought this condo in Natomas from my team member, Barbara Dow. So when it came time to sell, she listed with Elizabeth Weintraub. That’s because I take the listings for the team. I am a listing specialist. My team members are exclusive buyer’s agents. This is how I predict real estate will be in the future. Agents will pick a specialty and not try to do dual agency nor work both sides of the street.
The seller was a little confused as to why, but she went along with our strategy. Soon enough she figured out why she hired me as her Sacramento listing agent. It became clear early on. Not only do I sell a lot of homes in Sacramento, but I pride myself on producing spectacular results. I am very analytical. No way do I just stick my finger in the air and say, oh, the wind is blowing gently this morning, so the price for this condo at 4800 Westlake Parkway should be XYZ. I consider the comparable sales but I also take into consideration market demand, Bay Area buyer views, price point and more.
When you look at the square footage of this condo, it comps out around $256,000. Yet, I suggested a list price of $269,000, knowing full well there are no comps to support it. Sometimes I say forget the comps. Look at the market. Now, that’s not to say another agent could take that price and run with it, because no other agent markets the way I do. My systems are my own. I always go a few steps beyond what I should do. This is part of what makes me different.
We received an offer that was $4,000 lower, which was too low in my opinion and the seller agreed. The following day, we received another offer at $3,000 over list price, based on conversations with the buyer’s agent. I helped to guide the agent to that number. I also talked with a resident who disclosed an amazing fact. She told me there are only 8 three bedrooms in the entire complex! That statistic alone meant a higher price, in my mind.
After we went into escrow, the buyer asked for repairs. Buyers often do this because they don’t want to listen to their buyer’s agent and they think there is no harm in asking. To help facilitate the transaction, I sent do-it-yourself websites and instructional materials on how to do the repairs the buyer asked for herself. This made the buyer feel comfortable and she backed off the request for repairs.
However, when the appraisal came in, it was $5,000 low. I talked the buyer into splitting the difference in cash, so the seller still sold over list price. It meant that the buyer brought in more money to close. Also, there were no credits, no repairs. We closed escrow yesterday. The seller made a nice profit over the 5 years she rented out the condo and gained $100K+ equity upon resale. We steer our investment clients in the right direction.
I should mention that I listed this condo at 4800 Westlake Parkway while I was in Hawaii last month, and I also sold it from Hawaii. This is now the highest priced sale at 4800 Westlake Parkway. Think about this when you look for your next listing agent. I was able to do all of this without even looking at the property myself, much less being physically in town. Sacramento Realtors are not all the same. Call Elizabeth Weintraub at 916.233.6759 and put 40 years of experience to work for you.
Double-ending listing agents have been around since I started in the business in the early 1970s. They are still in the business today. Whether they will survive the real estate shake-up in the future, like 10 to 15 years from now, is doubtful. The reason I think they’ll eventually vanish is because they are a bad idea to start with. Time will only make them worse. I also believe sellers are becoming more sophisticated. They are wising up.
Although, at least in Sacramento, double-ending listing agents happens fewer times than one might think. It’s just not all that common.
There are unscrupulous double-ending listing agents who do everything in their power, generally at their seller’s detriment, to ensure they will get both sides of the commission. They do it so innocently that most sellers never even know what’s going on.
When I look at a listing and see the following things, it’s fairly obvious to me the listing agent is trying to double-end the transaction. For example, there are almost no photographs. No photographs means buyers will call the listing agent to get more information, and then the listing agent can represent them. Or, the listing will not allow a buyer’s agent to call the seller for showings. The listing will state: call listing agent. Then the listing agent will not answer the phone when Coldwell Banker lights up. Or the agent will only return voicemail from buyers. Or, the agent makes showings very difficult, like only between 3 and 4 PM on a Thursday.
If you think this isn’t going on in Sacramento real estate, I’ve got some swamp land in Florida to sell you.
Naive sellers might think they are getting a good deal if their double-ending listing agents also represents the buyer. Even if I ask: if you were suing your husband for divorce and demanding alimony, would you use your husband’s lawyer? If your son was on trial for murder, would you hire the prosecuting lawyer as your own? Dual agency is not a good idea.
Some double-ending listing agents offer a discount, too, when they take both sides of the commission. Are sellers getting a break or are they getting taken to the cleaners? The smart sellers reject this notion of dual agency. They figure out that hiring a top-notch listing agent who only represents their interests is the way to go, and instead of making money, they lose money by hiring a discount agent intent on double ending.
When you see a big price drop or a home that sold for a lot less than the list price, often it’s the transaction in which the agent represented both the buyer and seller.
That’s why buyers call me all the time and beg me to work with them. They expect me to throw my sellers under the bus when my intentions are the opposite. I intend to maximize my seller’s profit, not reduce it for my own personal gain. To do otherwise is dishonest. To expect me to be dishonest is insulting.
There is a reason discount agents don’t get paid the same as others. You take top listing agents whose average sales ratio might be 103%, meaning they sell their listings for 3% more than list price, and all of that hogwash about double-ending saving money goes right out the window. Double-ending listing agents tend to cost money. But it’s every seller’s right to choose lousy service and bad representation if that’s what they want. It’s a free country.