How To Ask For Trouble, and Make Money Doing It

September 17, 2006 |

I came across a very interesting advertisement placed by a local REALTOR in a local publication.  I won’t use this REALTOR’s name, but you may have seen the ad.  I found it disturbing. 

The headline of the ad reads, in big, bold, type, "Why Rent When You Can Own?"  Below the headline are all of this REALTOR’s current active listings.  There are six residential listings and 2 commercial listings.  At first glance, this seems like a pretty typical real estate advertisement.  Then, I read the bottom section of the ad.  It has a picture of the agent, the agent’s contact information, and the company logo.  Above that information, is the following copy, again in big, bold type:

"Receive 1% of Sale Price Back For Closing Cost When You Buy Any of These Properties Through Me!" 

I have quoted the copy exactly as it appears in the ad, punctuation, syntax, underlines and all.  Why do I find this disturbing?  BECAUSE THIS AGENT IS ADVERTISING DUAL-AGENCY AS A BENEFIT TO THE AGENT"S CLIENTS!

This idea is completely absurd to me, and a tremendous disservice to any potential client the agent is seeking.  First of all, I am so glad this REALTOR has chosen to be so generous to his buying clients.  I would think that the very LEAST an agent can do is give his or her client back 1% of the purchase price when the agent is making 6%, and not fully representing either client.  Then there is the issue of the selling client.  Hopefully, this client is receiving some sort of financial benefit as well, since he or she isn’t receiving the benefit of full representation either. 

The most sinister thing about the advertisement is the fact that it takes advantage of the ignorance of the real estate consumer.  Some unwitting potential buyer might see this and think that it is a great deal, not fully realizing what it means not to have full representation; or at least not finding out what it truly means until it is too late.  And if there is a potential buyer out there that does understand the implications of dual-agency, one must ask the question, "is 1% of the purchase price a fair price for not having adequate representation?"  It isn’t worth it to me; and I venture to guess that if the consumer was better-educated about dual agency, he or she would feel the same way.

If you ask me, this REALTOR is asking for serious trouble.  I can’t, for the life of me, figure out why a REALTOR would ever want to promote dual agency.  Wait, never mind, yes I can: the REALTOR makes twice as much money.  I guess this REALTOR is prepared to ignore the fact that neither one of the clients is going to get adequate representation.

What I am not going to do, is ignore the lack of education out there regarding dual-agency.  It is evil, and should be banned.  Until that time comes, I guess I will just have to spread the word.   

Posted by Daniel | Filed Under Dual Agency, Fluvanna 

Comments

One Response to “How To Ask For Trouble, and Make Money Doing It”

  1. Brianne on September 18th, 2006 7:50 am

    Thanks for bringing this up! When I had my home listed with one realtor, they actually mentioned briefly that they offered dual agency but them proceeded to completely skip over what that really meant. Later we found out and were very upset and disappointed to feel like our agent was playing both sides of the field. As a seller, how can you expect to get good service knowing that your agent isn’t really looking out for your best interests, but their own? I agree - this practice isn’t on the up-and-up, and more buyers and sellers need to be aware of it.

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