Whose side is your Realtor on?

Ever think twice about calling that Realtor whose name is on the sign in front of that lovely home? Maybe you will now.

Here’s a post that is guaranteed to ruffle the feathers of a few of my Realtor cohorts. I wrote something to this effect on my website , but I felt it deserved some attention here too.

I’m trying to inform the public about a practice in real estate that is perfectly legal, but in my eyes has potential for abuse and is in it’s nature an area of ethical grey and therefore something I do not do. It is quite common, in fact according to a recent survey (the 2006 buyer’s profile released by VIREB last August ) 34% of those surveyed said their Realtor had handled both the buyer and the seller for the transaction of a real estate purchase. In the business, this is referred to as “double ending.”

First off, I need to explain how this double ending thing works.

“Double ending” are two lovely words for realtors in B.C., (and I imagine in any area that has a similar system) as it equates to making twice the commission in one sale. Typically, when a property is sold, one Realtor represents the buyer and one represents the seller. Each Realtor is required to look after his/her client’s interests as if they were his/her own (aka fiduciary duty). Both sides haggle over things like prices, dates, subject clauses, chattels included, etc. and although the goal of everyone involved is to make a deal that keeps everyone happy, in most cases neither Realtor is going to have reason to be upset should those buyers move on to another listing. It’s going to mean more work, but so what, this is people’s finances, hopes and dreams we’re talking about.

However if a Realtor is representing both ends of the deal, it means making twice as much money for one sale by handling both ends of it. (More work goes into working with buyers by the way.) They don’t have to work as hard and they make more money. Instead of making say $5000 minus deductions, they make $10,000 minus deductions. That’s a lot of money to wave under someone’s nose and then expect them to truly protect the interests of each party impartially. The Realtor’s own interests are more likely to get in the way.

To be fair, it must be mentioned here that Realtors are required by law to keep private information of each party from the other in this situation lest it give one side an unfair advantage. For example, they’re not allowed to tell the buyer what the seller will accept and they’re not allowed to tell the seller what the buyer will pay. But they’re also supposed to disclose disclose disclose as in all other transactions. But after waving all that money under their nose, I wonder how much pertinent info gets kept silent in some deals.

In essence, once this sort of situation is entered, the Realtor ceases to be your hired gun and becomes a sort of arbitrator to the deal. They inform you and help the process along instead of doing that plus looking after just you. The same goes for the client on the other side of the deal.

This arrangment, like everything else we do, is something that we have to disclose to our clients on both sides of the deal and they even have to sign a document to acknowledge their approval. The thing is, I know that most people put a lot of trust in what their Realtor tells them and I know that there is the odd Realtor with a silver tongue who is willing and able to make any situation sound “perfectly fine.” or like “a great opportunity” when it is not. Such Realtors aren’t the norm, but there are a handful of them out there and I think they’re hard to spot unless you know them or the local Real Estate world well.

To illustrate all this another way, let me lay out the benefits of working with the very few of us (I’m only aware of two or three besides myself) who have a policy against double ending:

Benefits for working iwth a non double ending Realtor for Buyers :

  • When your Realtor shows you a property and they get excited about it, you know it has nothing to do with them making extra commission off of it.
  • Your Realtor is much less likely to try to choose your property for you/take you to view their own listings rather than show you ones you are most likely to like based on your own tastes.
  • Your Realtor will stay on your side throughout the process.
  • Your Realtor will tell you anything they can to give you an advantage in negotiations.

Benefits for working iwth a non double ending Realtor for Sellers:

  • The listing for your home won’t become one of those ones that aren’t properly presented on the MLS system. (I have a theory that some of the big name Realtors sometimes try to hold a good listing back from getting attention on the MLS by not entering proper comments or all the photos for example. This way, buyers working with other Realtors are less likely to view the property but the listing Realtor can bring their own buyers through to buy it.) Rules are in place to make this difficult, and it is, but not impossible.
  • Your Realtor will stay on your side throughout the process.
  • Your Realtor will tell you anything they can to give you an advantage in negotiations.

Of course, all this begs the question: “What do you do when asked to double end Ryan?”

The answer : If you’re a buyer, I’ll show you the property. It’s my pleasure. If it interests you, I’ll refer you to another Realtor who I trust to look after you properly to look after the sale. If it doesn’t interest you, no problem we can go look at other properties until you find the right one for you.

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