It's what you don't know to ask that costs the most
It happened again.
A couple from Toronto lost their $30,000 deposit and the home of their dreams in what the real estate industry calls dual agency or a double-ended deal.
In other words, it’s when the same real estate agent represents both the buyer and the seller in a transaction.
Here’s a link to the story:
If you’ve listened to me for some time, then you’ve heard me warn against dual agency.
And here’s why I am 100% against it.
First, of all I am a Realtor. That set’s me apart from real estate agents because I live by the Realtor Code of Ethics that goes way beyond the laws of any state.
The first article of the code of ethics states:
“When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge themselves to protect and promote the interests of their client. This obligation to the client is primary, but it does not relieve REALTORS® of their obligation to treat all parties honestly. When serving a buyer, seller, landlord, tenant or other party in a non-agency capacity, REALTORS® remain obligated to treat all parties honestly.”
It’s in that first sentence that tells me that I should not represent both the buyer and the seller in the same transaction.
How can you protect and promote the interests of two different parties who are competing against each other?
To me, it’s impossible.
Yet, this myth is common among buyers.
Every week, I get calls from potential buyers who want me to represent them on one of my client’s listings.
And each time for the last 12 years, I’ve turned them down.
Many buyers get angry because they have been told that the best way to get a deal on a house is to go straight to the listing agent.
To make things worse, this fallacy gets promoted in every “celebrity” investing seminar that finds it’s way to a hotel ballroom near you.
It’s gotten so bad that I can tell when a “Get Rich Quick” seminar has been held locally by the calls that I get that week.
Here’s the truth.
It’s not what you know, but the question you didn’t know to ask that costs you the most in real estate.
And that’s what led this couple to lose $30,000.
They didn’t know to ask about the health of the HOA and what could cause them to lose their “non-refundable” deposit.
You have a choice for representation in real estate.
Take a chance with someone whose main concern is to maximize their commission.
Work with a Realtor who lives by the Code of Ethics.
If you prefer the latter, then hit reply and let’s talk.
The Daily Deal in Nashville is a newer home with a historic design located in popular Germantown and listed for less than $470,000.