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October 8, 2018

Feedback for Listing Agents: Is it Worth Your Time?

For as long as I can remember, the question of whether to give feedback to listing agents or not has been a topic of conversation.  I continue to be surprised by why agents do it and how well-meaning professionals have rationalized it.

Working For the Seller

When I started my real estate company back in the late 80’s, there was no buyer agency and we all worked for the seller.  At that point, when feedback was requested I was legally bound to provide the buyer’s feedback since the buyer was not my client and I legally represented the seller in every real estate transaction.  The buyer at that time was always a "customer" who was not provided with any fiduciary or statutory duties other than disclosure of material facts and honesty.  The buyer was not entitled to any legal duties of loyalty, obedience or confidentiality.  

So in essence, no matter what my relationship was with the buyer, I owed my legal responsibilities to a seller, who I often did not know and had no relationship to whatsoever.  What that meant was that if a seller wanted feedback, as my client I owed that seller obedience and provided them with any information they wanted on the buyer. This included not only how they felt about the property but also information on their financial abilities, personal secrets and how they planned on negotiating should they decide to submit an offer. These were the days of “sub-agency” when I was a spy for the seller.  

None of this seemed to make sense to me as a broker of a large growing real estate company. The buyers that were our ‘customers’ were friends, neighbors and social contacts, so I actively advocated for buyer agency in my state as I became state president of CT and like all of the other states at that time, buyer representation became a mainstream law.  

That now meant that anything my buyer client conveyed to me including financial, negotiation strategy, motivation/urgency or personal secrets was deemed legally confidential and none of their information could be disclosed, provided or betrayed without their written consent. 

Feedback at that point became legally restricted under the statutory/fiduciary standard of motivation, urgency and personal secrets categories.  The seller, even in a dual relationship, was not entitled to that information without the express written permission due to the legal responsibility of confidentiality.

What Feedback Isn't

I do want to elaborate on what feedback isn’t. Feedback isn’t a material issue like water is leaking in the basement or something broke in the house or a door was unlocked, etc.  Those issues are property related in a material sense and have no impact on a buyer’s personal information. These are situations where I would be obligated to help the listing agent and seller with information.

Sometimes agents confuse the Code of Ethics, local area customs and business practices with legal requirements and that is what I see with the concept of feedback and what we might call, "We have always done it that way before."  

I truly get it and understand that some agents may believe that we are there to help each other as much as possible, but it cannot be at the expense of our legal responsibilities or contrary to our client’s interests. Client needs and legal requirements take precedent and become the priority to showing courtesy to the other agent.  

So although the listing agent may have already told the seller that the peacock mural in the living room has to go, or the property is overpriced, or it smells, or it is cluttered, or the cemetery next door is an issue, or the house needs painting, they are hoping that all of the showing agents will back them up in the feedback remarks so that the seller will paint over it. 

Unfortunately, my buyer client may want to use this type of information as a wedge in their negotiation and so if I comply with the listing agent’s request and provided feedback without my buyer client’s written permission, then I have violated my legal duty of confidentiality to my client so that I could help out the listing agent with information.  

No Good Deed...

I am asked all the time, “Why can’t I give feedback if my buyer client isn’t interested”?  This is a great question! So let’s say my client isn’t interested and tells me they don’t care if I tell you the house smells to help your seller (with nothing in writing to me). But after looking around at more properties, they change their mind and now want to make an offer for the house I just gave their feedback on.  

Aside from the fact that the seller might be insulted by the comment and not even want to entertain my client’s offer, we also just gave away one of our negotiating tools to secure a better deal for my client.  

Under those circumstances, the buyers might now blame me for either suggesting we provide feedback, giving feedback without their permission or providing it with their verbal consent only (they conveniently don’t remember giving me any permission at all).  

You know as well as I do that they have "selective amnesia" and then blame us, it happens all the time. Even if I have written permission, as an advocate for my client, it seems ludicrous to give away any advantages we may have in a negotiation.

Not Your Grandma's Real Estate Business

So where does all of this leave us?  The first step is to help all agents in a market environment understand that business laws have changed business practices.  

This is not our grandmother’s real estate business of sub-agency anymore.  That is why the ABR, SRS and RENE are the trifectas of training for any agent in today’s business environment.  Client representation of today requires that I don’t blame the other agent for doing their business legally.  It recognizes that my job is different from their job and I shouldn’t be punished for doing my job correctly. 

It is an understanding that complying with the COE does not put me in a position in which I throw my client under the bus to meet the expectations of a cooperating agent that doesn’t understand that the interests of my client come before theirs. 

I hope this helps explain why from a legal standpoint and a negotiation strategy viewpoint that the best practice for today’s business brokerages is as follows:

No good buyer agent gives feedback.  

When I am inundated with feedback requests from cooperating agents I respond, “Thank you for the opportunity to show your client’s property.  Should my client have any interest, we will let you know.”  

After all, the only real feedback is an offer.  

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