The Scottsdale Real Estate Files: December 2009

The La Brea Tar Pits of what is modern day Los Angeles are renowned for their eternal incarceration of prehistoric life.  Think an 18 to life stint in Folsom is a rough hitch?  Try fossilizing yourself in natural asphalt for thousands of years following an untimely demise that accompanied no greater sin than stepping out for a bite to eat.  Several millenia later, they jackhammer your permanently surprised face out of the earth's candy shell for the sole purpose of humiliating your petrified remains in front of busloads of insolent school kids and German tourists.  Many victims were believed to have plummeted into the inky abyss after stopping for a drink from the surface water that obscured the death trap below.  Subsequent predators then eagerly followed the trail of easy prey to a sticky fate of their own.

Which brings me to dual agency.  To hear most Real Estate professionals describe it, the much maligned practice of dual agency is every bit the equal of those gooey pits as a carnivorous devourer of wayward souls.  Why, one would surely toss baby Jessica back down a well teeming with the stuff before subjecting her to the horrors of limited representation.  In the nearly forty thousand years that the tar pits have been open for business, one human being is known to have been swallowed amongst the saber-tooth tigers, woolly mammoths, ground sloths and aspiring B-level actors.  Meanwhile, dual agency has swallowed countless John & Jane Doe's in only two decades of practice in the metro Phoenix market.  In that time, there has arisen a chorus of familiar refrains.

"How can an agent or brokerage adequately represent two parties with competing interests in a single transaction?"

"How can an agent or brokerage remain neutral when I employed him/her to be an advocate?"

"How can my agent possibly bring me the head of Indigo Montoya if he also represents said eleven-fingered abomination who killed my father?"

As attorneys shape our contracts and further mold our practices to mirror their own, the days of the polyester-encased salesman are largely behind us.  That is a good thing.  There are clear delineations in terms of the roles and responsibilities of the agents involved in the transaction, as opposed to the ambiguity that often existed before the advent of buyer agency.  Under the previous doctrine of sub-agency, an agent could show his buyer property over the course of three months, only to morph into a subagent of the seller when negotiations began on a property.  A ludicrous setup if there ever was one.  Thus, the greater transparency in distinguishing where allegiances lie in a Real Estate transaction has been a positive result.  The rise of buyer agency has led to the tandem rise of another apparent conflict of interest in representative terms, however: Dual agency.

Dual agency arises out of transactional occurrences in which the same broker represents both buyer and seller.  Sometimes this entails one agent working on behalf of both parties, but more common, especially in large brokerages, are occasions where an agent from Brokerage A brings a buyer to the listing held by another agent from Brokerage A.  Even though there are two agents involved in the potential sale, all Real Estate business flows through the company's designated broker.  Thus, even though, in practical terms, each side may appear to have the exclusive representation of their chosen agent, the same broker ultimately bears responsibility for both sides of the transaction. 

While I agree that a single agent attempting to wear both hats (or neither if he more or less recuses himself as a mediator between parties in the process) in a transaction is generally marginalizing his service, it is inane to argue that all dual agency eventualities are, and should be, avoidable.  If a buyer wishes to purchase one of my listings without the involvement of another agent, I will certainly oblige, but my loyalty is unmistakable.  I represent the seller exclusively, and the buyer is my customer.  When I take on a buyer client, however, it is ludicrous to suggest that I refrain from showing them certain listings simply because a fellow Realty Executive has it up for sale.  If a property fits the criteria of my client, I don't care if it is listed by Ming the Merciless.  Full disclosure is paramount, but the chest-thumping that often decries all possible manifestations of dual agency is misguided.  Would my seller clients really prefer that I refrained from showing my listings to fellow Realty Executives, drastically reducing their potential buyer pool?  Would my buyers really prefer I exclude the listings from the top selling brokerage in the state when we begin our hunt?  I highly doubt it.  Matter of fact, I have yet to encounter the client that has instructed me to do so after an initial discussion of the limitations in representation that can crop up in such circumstances.  Finding the house or the buyer is first and foremost.  Concerns over representational nuance is secondary.

There can be advantages in addition to the well reported disadvantages with dual agency.  Some principals may find the process less adversarial and more expedient when the variable of a competing agent is removed from the equation.  It can very well be argued that the dynamic lessens the presence of the "telephone game" syndrome and needless acrimony that can accompany the dueling egos of multiple agents.  More to the point, if agents of the same brokerage have a solid working relationship, and work for a reputable organization, there is the added benefit of knowing the transaction will be handled professionally.  Limited representation from a pro is of far more benefit than full representation from a schmuck.  While representation may be limited for a client, it is equally limited on the other side of the table.  The playing field remains level, as it is in cases in which each party has the full, unflinching representation of a brokerage.

Dual agency is one of those topics that causes a fair amount of unease, but it shouldn't be feared by name alone.  You should have full and frank discussions with your chosen agent about the possible ramifications of the various forms of agency floating around out there (preferably at the beginning of your relationship, rather than a forced immersion at the time of a contract submission).  There are circumstances which may call for it, and as long as all parties understand and agree with the terms, can prove beneficial.  Is it ideal?  Far from it.  Then again, neither is passing up the home of your dreams because it has the misfortune of being listed for sale by your agent's brokerage.

Dual Agency:  It's not just for shafting the public anymore!

By any measure, 2009 has been an ogre.  A lineal Shrek, if you will.  We probably all would have given it a miss had we heeded the decree of the Chinese calendar that it was to be the Year of the Killer Tomato.  Given the chance to hit reset on the impending culmination of 365 vexing days, however, I would not take it.  There are strengthening vitamins and minerals to be had in the juices of the very tomatoes at my feet that have pelted my face and stung my wide eyes.

There have been financial challenges, the likes of which were previously alien to me.  With the disjointed gyrations of an industry and market that represent a brand new dance to even the longest tenured vets, I have been forced to the brink of professional incineration for long stretches on end.  With seared toes and fingertips, however, I’ve held fast at the threshold to that fiery abyss. My Gen-X core becoming more pliable and durable all the while in paradoxical harmony.  A representative for a generation that is accustomed to having, to entitlement, I have learned the pain and honor of struggle.  Months on end to produce results that formerly took days or weeks.  Deals faltering where they had always stuck.  The size of the paychecks for those miraculous transactions that have beaten the odds to reach the closing table dwindling in numerical lockstep with the eroded property values in our midst, even as costs continue to rise.

Bill collectors unconcerned about any of it.

There have been personal challenges.  The year began with mortality staring unflinchingly into our faces.  Loved ones saddled with dreaded diagnoses and marching orders to treacherous corners of an unconcerned earth.  And loss.  There has been loss.  Both that which was not yet in our grasp and that which had been held in loose, complacent grip.  In our sorrow, we have found new strength.  Renewed commitment.  Stronger bonds that will never permit the tenuous clutches of the immediate moment to intrude upon the existence or color pallet of a promised collective future.  Deeper reservoirs of ourselves with which to nourish those who require infinite supply.

With a little less than a month remaining in this stanza, I am eager to turn the page, albeit wholly aware that no classic prose is free of drama.  That every resolution requires a conflict.  When all is said and done, and the metaphorical book of me is written, it will be this very chapter that stands out in full bas relief.  I needed 2009 to become who I am to be, and I wouldn’t give it back for all the rotten tomatoes in Shanghai.