I cannot believe that I am writing this blog post, but I am. When I began my real estate career in the mid 90’s, the landscape was very different. We were still working with the big books that were printed every 2 weeks with the listing updates. There was a machine in the office that spit out the listings, and using the internet was in its infancy. This was the dawn of the age of technology for realtors and consumers. My company, Cornish & Carey (which was long ago gobbled up by Coldwell Banker) was at the forefront of innovation because they were opening up a storefront where consumers could go and look at virtual tours of homes since they could not see them on their computers. It was an exciting time to begin a new career.
But despite all of these major changes, there was a bigger change that was taking place, and one that I think was even more important than the introduction of computers into the daily fabric of real estate. This big change had to do with agency. Before I became a realtor there was one agent in a transaction, the seller’s agent. This agent could, and frequently did handle both sides of a transaction. If the buyer had his or her own agent the seller’s agent could agree to a sub-agency agreement, where the buyer’s agent was a sub agent of the seller’s agent but the seller’s agent was still basically in charge. Real estate laws had not been particularly consumer friendly and sub agencies were not helping.
Consumers, who were for the most part, intelligent adults, realized that this was not in their favor, and a shift had taken place. By the mid 90’s it was standard procedure for the buyer and seller to have separate agents, agency disclosures became mandatory, and the sub agency relationship was going the way of the printed listing book. This was all in the name of PROTECTING THE BUYER, not to save money or to protect the seller.
Fast forward to 2010 and all of the sudden the buyer’s agent is the enemy in the eyes of many buyers. They think that we are at best superfluous, and at worst, trying to get our hands in your pockets without providing any service. All of the work that was done on behalf of the consumers in the 80’s and 90’s is now looked on with scorn. Many consumers think that because they can find their own home they do not need an agent. Well, I think you are wrong.
I think you need to be protected, because I am old enough to know what it was like when you were not protected, and how hard people had to fight to make sure the buyer got as much protection as the seller. I am not saying that real estate should not move forward, that change is bad. I am also an unwavering believer that I work for the consumer, and if they do not want a buyer’s agent it is their business, and their pocketbook. What I am saying is that just because the role of the buyer’s agent is changing from personal shopper to trusted advisor and protector that does not mean we are superfluous. Just because Redfin says a house is worth x amount that does not mean it is. Do you know who to call for inspections, or even what inspections you need? Just because you can download a disclosure package from the internet does that mean you understand everything in it? These are just a few of the things that are involved in a transaction, and some people are capable of doing those things themselves, but not everyone.
I have recently been a listing agent for two different properties where the potential buyer did not have his own agent. On the first one, the buyer went to a mortgage broker who gave him a pre-approval letter that was not worth the paper it was written on. This client was no more qualified to purchase a home than my labradoodle Demi. I called the broker (who by the way worked for a reputable company) and was assured that everything was fine. Since I was not the agent for the buyer I did not have access to this buyer’s financials or credit. Well, 6 weeks later the mortgage broker finally admitted she was hoping to get exceptions for the buyer and that she didn’t and the loan was denied. It was heart-breaking since this buyer wanted the home so badly, but totally preventable. If the buyer had been represented by a good realtor he would have known early on that he was not going to get a loan and could have looked for alternatives, partners, etc.
The second property with an unrepresented buyer so far has a different outcome. The buyer is paying all cash and actually wrote a better offer than many of the 12 other agents who presented. It was amazing how many incomplete offers I received. This buyer followed my directions exactly and offered the best price and terms to my seller. However, the house is in very bad condition and he wants to restore it. I have no idea if he knows what he is doing, and I cannot find out, because I cannot represent him. If I help him I would be acting as his agent and I am not his agent. I hope he knows what he is getting into, but I have no way of really knowing.
As I said, I believe in his right to do this, but I also believe that a home purchase is big deal and should be done with utmost care. I would hate to think that all the strides in consumer protection are ignored in the name of saving a few percentages. What do you think?
Marcy Moyer
Intero Real Estate Services
650-619-9285
marcy@marcymoyer.com
