Jan. 14, 2006 - Rain City Guide Response
Galen asks: Is it bad if everyone else does it too? What if you are one of the best?
The Department of Justice suit against NAR is a very complex issue, which, I will follow and explain at length in my own blog. But let me raise a couple of key points for general edification in laymen terms.
There is absolutely nothing wrong with the consumer getting what he wants. There is absolutely nothing wrong with the consumer having many options with regard to the price he or she might pay for Buyer Agent services or Seller Agent services.
While we in the State of Washington, may not have to worry about the issue at hand, because our NWMLS is not owned by the Board of Realtors as it is in much of the Country, we have other forces to be reckoned with. There is a misperception that real estate licensees sell houses. We do not sell houses for a living. We represent people for a living. That is required of us by law even moreso in the State of Washington than in many other states.
Under our State Law, a real estate licensee is obligated to represent consumers as the default, without the consumer needing to invoke the question Will you represent me?. When a seller wants to be a glorified FSBO and garner ONLY mls exposure, a sign in front of his house and a keybox, the licensee is not necessarily relieved of his/her legal obligation to represent that consumer in a fiduciary capacity.
It is certainly OK for a consumer to trade down to a minimal service for a minimal price. But the State will have to catch up with this option by changing the Disclosure Laws and required Disclosure of Agency Laws pamphlet given to consumers, to incorporate this option. States have the role, duty and obligation to protect consumers from being their own worst enemy, if you will. At present we are one of the only states in the Country that offers full, fiduciary service as the default.
As long as the Courts continue to hold the licensee liable for being the advocate of and full fiduciary agent of the consumer, the options will continue to favor the consumers protection rather than his money. Fiduciary is a big word. I have represented consumers in a fiduciary capacity for 35 years or so in both the fields of real estate and trust and investment services, and so "get" the meaning of this word better than most real estate licensees.
Fiduciary means I always do what is best for you, without regard whatsoever to whats in it for me.
One simple example, and then I will go to the office to represent a buyer client. We recently fired a real estate licensee. She was bemoaning the fact that we told her to show her client a property that was $200,000 less than that buyers max affordability. It was a great bargain and perfect for that buyer client. The agent complained that she would make less money if the buyer bought a lower priced property. We tried for about three weeks to impress on the agent that her duty was to help the buyer get the best property at the best price, WITHOUT REGARD TO WHAT SHE, THE AGENT, WOULD MAKE ON IT. We could not get our point across. We could not persuade her to come from the right place in her mind and heart. We fired her.
Someone can say, I dont need full fiduciary services, I just want the mls and a lockbox and minimal service. They can pay any price they want, as long as they understand that they are trading down.
So the answer to your question, Galen, "Is it bad for everyone else to do it too?" I ask you, what is it?
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