July 2008, the Realty world Changes for the worse!

In July of 2008, in the great state of Florida, it will no longer be required of agents to disclose a Transactional relationship with Buyers or Sellers! How did this happen? This could be the greatest boner ever passed! Great job NAR for not taking a harder look at this one.

To the general lay person, it may not seem like a big deal, but let me put this thing into perspective for you: For the sake of this Blog, lets assume you are the seller of a $400,000 house. You list with XYZ Agent who does not disclose that they are acting as a Transaction Broker. You hire them. Two months later, you have another agent from ABC Realty offer $350,000. This Agent from ABC Realty is speaking with the Buyer and tells the Buyer agent (YES, the one that is representing the BUYER, trying to get the best deal they can for their BUYER) that they “will pay full price for the house”, but they want to see if the seller will move off that price. YOUR AGENT THAT YOU HIRED TO SELL YOUR HOME (the Transaction Broker) overhears this conversation. Your Agent gives you the offer. You review it and decide to counter offer $375,000. Your Transaction Broker will watch you sign the contract, knowing that you are leaving $25,000 on the table, and proceed with the sale. Who had your back? You just paid a $21,000 commission to one Agent from XYZ ($10,500) who basically “facilitated the deal” and $10,500 to the Buyers Agent, who did a VERY NICE job representing their Buyer.

Had the Seller listed with a “Single Agent” or an Agent that represented the SELLER, they would be $25,000 ahead of the game. To the common lay person, this is difficult enough to understand, as of July 2008, the Seller has NO CHANCE TO SEE THIS because Agents will no longer be required to disclose this type of representation.

If you think you are safe with larger firms, think again. Some of the most well known names in real estate NO LONGER REPRESENT SELLERS. Ignorant Sellers don’t ask questions and they just assume that they are being represented. Those agents when asked will SPIN, SPIN, SPIN this fact. But there is no hiding the FACT that Sellers, the ones who pay the Realtors, are getting short changed, or should I say, “short dollared” by this misleading change.

Now, more than ever, you need to ask of your Realtor FLAT OUT, “Do you represent me, YES or NO” and take the spin off thank you very much! I don’t know the exact number, but I’m willing to bet that over 75% of the Sellers that have their home or property listed in Florida now are operating under this “Transaction Broker” scenario. The laws need to be changed so that Buyers and Sellers are again working at arms length! As it stands now, Buyers are being represented most of the time, yet Sellers are not. Why? Because they are not asking for the representation!

This is simply put, a way to put a buffer between the Listing Office / Agent and the Seller, in case of a lawsuit later. The Listing Agent can “divorce” the Seller and say “I was a Transaction Broker” thus erasing potential liability!

That’s the way I see it!