Dual agency in real estate
Buyer representation? Dual agency? NAR for heaven’s sake? Give me a break. Until I became a blogger I was both ignorant and apathetic about what opinions were held by others in the industry on those subjects. The only thing that has changed is the entertainment I sometimes enjoy while reading about them.
Keep in mind that most of these opinions are offered by agents who’ve never put together consecutive years of income equal to the national median. In fact, the vast majority of these pillars of agent ethics, according to their own association, earn far less than the national median.
In the 1960s and early 1970s I worked for a real estate firm sporting six offices and give or take 40 agents. About 65-75% of the agents were full time. In the two years I was the janitor and printer (mimeograph) of new listings, they closed over 1,000 transactions — over 2,000 ‘sides’ — 100% of which were dual agency sales. That same firm also escrowed the sales. Oh, the humanity! Furthermore, if one of their agents was caught showing another broker’s listings, he/she was fired on the spot. The company’s broker/owner didn’t cooperate with outside brokers – as policy. He refused to join the local board or the MLS. How could that work you ask? Simple, his company always had more listings under $20,000 (the magic number back then) than the entire MLS. He didn’t need them. They needed him.
And everyone knew it.
(Note: For the record, this broker didn’t employ nepotism very well either. Starting your son in the family business as the janitor for two years sends a pretty clear message, don’t you think? Dad was one of a kind.)
When inevitably the green monster of envy showed up in the form of an anonymous complaint to the DRE — bullies are almost always cowards too — he was unceremoniously audited within an inch of his life. It took three days. The auditor handed his card to the broker when he’d concluded his work, and said, “Mr. Brown, if you are contacted by the DRE about any broker’s complaint ever again, give me a call. Your files are the cleanest I’ve ever seen. If I ever decide to move, you will get my listing.”
It seems when the smoke cleared, integrity was what mattered. Integrity is the ultimate trump card.
I find it silly to even have to debate this subject, since most of the time it revolves around perception, not reality. Marketing deals with perception. Our behavior in the service of our clients must be more valuable than that. It must be real. Our clients must have faith in us and our integrity, not merely an ambiguous, often amorphous perception.
I work in the investment side of real estate. My clients invest to improve their retirement. A large part of my business is tax deferred exchanges. The consequences of a failed exchange can be ruinous in terms of capital gains taxes unintentionally caused.
Without boring you with tax law details, there are times in an exchange in which investors can be put at risk of owing capital gains taxes. If a transaction falls through at a critical point in the exchange, it can result in huge tax consequences, regardless of whose fault it was. In my experience this usually comes up when I’ve sold a client’s income property as the first stage of an exchange. There is a 45 day window from the time that sale closes in which the seller must ‘identify’ the property they will be exchanging into, using the equity/proceeds from the recently closed sale. If that property is listed by an outside broker who somehow causes the escrow to fall out, and the 45 days has passed – my client is rendered helpless. He can no longer take advantage of a tax deferred exchange, and will now owe whatever capital gains tax applies to that property.
The common denominator of these failures is the listing agent, virtually always a specialist in owner occupied housing.
This is why my clients PREFER to purchase properties I’ve listed. They know the other client is likely also exchanging for tax reasons and therefore equally motivated to perform. They also like that I’m in control of both sides.
Wait, it gets better.
I tell my clients, in writing, that if I sell their property myself it’s virtually guaranteed to be at a lower price than if another broker from the MLS brought their buyer to the table. Now this is where the chorus chimes in – “That’s at least the perception of evil! This is why dual agency is so wrong.” Blah blah blah, yadda yadda yadda. The next question is why sell for a little less, right? I’m glad you asked.
90% of the properties I sell for my clients are 1-4 unit rentals. Most of the buyers are represented by agents who couldn’t find their backsides with two guides, a map, and a GPS when it comes to income property. Their agents allow them to pay more than my clients would. (I’m with this when there’s no exchange involved, as who doesn’t like a higher price.) My clients make the decision to sell for a tad less, (usually 1-3%) because of the peace of mind they have knowing the sale, and therefore the tax deferred excchange is going to conclude successfully. Paying $50-100,000 in capital gains taxes because some house agent wannabe decides to dabble in investments isn’t worth getting $10,000 more for their property.
And for the record, I charge six percent — period. Of course, all this is disclosed to the max. I usually end up introducing the clients to each other, and some have become friends. They all have a signed, written disclosure by me on my letterhead, making my relationship with all parties nakedly transparent. One of the common denominators that makes this attractive to my clients is the knowledge that they’re buying property that hasn’t been broadcast to the public. They don’t have to compete with other buyers, making it even more of a seamless transaction. And the sellers prefer this approach for the above mentioned reasons. (I’ve always been told repetition is the best teacher.)
When I’ve given ‘mini-seminars’ in their homes, attended by their friends, neighbors, and family, it’s more likely than not that they’ve actually invited another client of mine to attend. It’s pretty effective when investors hear from satisfied clients that dual agency is sometimes the way to go. This is especially true when some of the attendees have experienced exchanges gone sideways due to an outside house broker’s poor performance.
However, now that my operation is national, not local in scope, I hafta deal with these wannabes regularly. The silver lining is that even if the sale of the original property in the exchange falls through, they’ve not yet incurred tax consequences. Since I advise/consult with the sellers of the properties they’ll eventually acquire, their safety remains assured.
Ultimately the reasons my clients do business with me is the same reason your clients do business with you: You offer solid value, expertise, and results. You operate with INTEGRITY. My clients come to me because they want to increase net worth, retire as soon as possible, and with as much tax sheltered or tax free income as they can possibly create. I strive to give them just that.
Dual agency is a non-issue debated by folks who are either jealous or, to give them the benefit of the doubt, afraid of what others might think of them. I have no problem with those who disagree with me and avoid dual agency as policy. In fact I admire them for walking their talk. I think most of them are sincere in their beliefs.
I just think they’re sincerely mistaken. Integrity should always triumph over perception. When perception wins, we all lose. Perception is too often a bully who doesn’t have anything else to say, so the issue is framed by how it might appear. To those who are on the fence, I say, grow a pair. Look others in the eye and stand on the platform of your integrity.
Dual agency is simply not an issue worth of all this drama. Here are the usual 4 arguments brought forward.
1. The client has the potential to be injured by an agent who isn’t an angel.
If this is accepted universally then we must repeal the law of gravity. It also is employed daily by those not possessing either wings or a halo. This belief requires all agency to be eliminated due to the potential for abuse.
2. If he is the listing agent he can’t compose a low ball offer.
What, your forms software won’t work? There is no ethical prohibition to making low ball offers if the buyer insists on it, even if you’re also the listing agent. That offer doesn’t make you unethical, it makes you an agent. A seller can turn it down as he pleases, just as if he was represented by another agent. In fact, I’d be telling my client that his low ball offer will be turned down — due to my advice to the seller. 🙂 The seller’s already been told by me, verbally and in writing, that the ultimate sales price WILL BE lower than the buyer wasn’t also my client. They’ve made a totally informed decision to go with that scenario. (Just not low ball.) They know I won’t allow a stoopid low sales price, AS DOES MY BUYER CLIENT. They both know the story from beginning to end, and have opted in voluntarily.
3. If dual agency can ever be abused via bad agent intent, then it is universally a bad idea.
By that definition all agency is a bad idea as it can all be abused by bad intent. Using that approach, marriage is a bad idea. Government is a bad idea. Baby sitting is a bad idea. Only those unable to think for themselves buy into that school of thought.
4. The perception of the public favors an agent who refuses to participate in dual agency.
I’ve been hearing this since Nixon was in office, and apparently missed that tsunami of negative public opinion. Yet how many past clients refuse to do business with huge teams whose volume each year consists of 10-25% dual agency? I personally know a highly successful team leader in another state who listed and sold an attorney’s home himself. The attorney came to him to list the property with full knowledge it could result in a dual agency sale. The final false premise is that I must ‘persuade’ you that dual agency is universally good rather than evil. Shame on me for accepting that in the first place.
Nobody’s ever proved to me that dual agency is inherently injurious to our clients. What folks have said is it has the potential to be. I have the potential to be an escrow officer but haven chosen to eschew that path. An argument against dual agency based on the potential for agent abuse, or the public’s perception, or that it sometimes results in unethical behavior, is doomed to failure. We all choose to behave and conduct business ethically and with OldSchool integrity, or we don’t. The real laugher is that an agent behaves ethically during single agency deals, but misbehaves during dual agency. Really? You’re hangin’ your hat on that? You’re embarrassing yourself.
As for the public’s outcry on this subject, I’m deafened by the silence.
This coming October will mark my 44th anniversary in the business. I’ve heard this dual agency ‘debate’ since I was 18. Yet, the public hasn’t cared a whit. It’s almost always the PC bully crowd makin’ most of the noise.
Please put forward an argument which logically stands alone. As you have noticed by now, I won’t defend my position based upon the potential for evil. Angelic behavior is not a requirement to make a living in real estate. Integrity and ethically based behavior is. Bad behavior is punished. The drunk driver is punished, but you and I aren’t prohibited from drinking because of the drunk driver’s sin.
Ayn Rand said it best: If the results you wish continually fail to materialize – check your premises.
The public simply never has, isn’t, and likely won’t buy your irrational reasoning. They’re far more interested in getting results.
How strong leaders use times of crises to improve their company’s future
(EDITORIAL) We’re months into the COVID-19 crisis, and some leaders are still fumbling through it, while others are quietly safeguarding their company’s future.
Anthony J. Algmin is the Founder and CEO of Algmin Data Leadership, a company helping business and technology leaders transform their future with data, and author of a new book on data leadership. We asked for his insights on how a strong leader can see their teams, their companies, their people through this global pandemic (and other crises in the future). The following are his own words:
Managers sometimes forget that the people we lead have lives outside of the office. This is true always, but is amplified when a crisis like COVID-19 occurs. We need to remember that our job is to serve our teams, to help them be as aligned and productive as possible in the short and long terms.
Crises are exactly when we need to think about what they might be going through, and realize that the partnership we have with our employees is more than a transaction. If we’ve ever asked our people to make sacrifices, like working over a weekend without extra pay, we should be thinking first about how we can support them through the tough times. When we do right by people when they really need it, they will run through walls again for our organizations when things return to normal.
Let them know it’s okay to breathe and talk about it. In a situation like COVID-19 where everything is disrupted and people are now adjusting to things like working from home, it is naturally going to be difficult and frustrating.
The best advice is to encourage people to turn off the TV and stop frequently checking the news websites. As fast as news is happening, it will not make a difference in what we can control ourselves. Right now most of us know what our day will look like, and nothing that comes out in the news is going to materially change it. If we avoid the noisy inputs, we’ll be much better able to focus and get our brains to stop spinning on things we can’t control.
And this may be the only time I would advocate for more meetings. If you don’t have at least a daily standup with your team, you should. And encourage everyone to have a video-enabled setup if at all possible. We may not be able to be in the same room, but the sense of engagement with video is much greater than audio-only calls.
We also risk spiraling if we think too much about how our companies are struggling, or if our teams cannot achieve what our organizations need to be successful. It’s like the difference in sports between practice and the big game. Normal times are when we game plan, we strategize, and work on our fundamentals. Crises are the time to focus and leave it all on the field.
That said, do not fail to observe and note what works well and where you struggle. If you had problems with data quality or inefficient processes before the crisis, you are not fixing them now. Pull out the duct tape and find a way through it. But later, when the crisis subsides, learn from the experience and get better for next time.
Find a hobby. Anything you can do to clear your head and separate work from the other considerations in your life. We may feel like the weight of the world is on our shoulders, and without a pressure release we will not be able to sustain this level of stress and remain as productive as our teams, businesses, and families need us.
20 bullsh*t buzzwords that should be banned from tech forever
(OPINION) As the language of tech ebbs and flows, there are linguistic potholes so over-used, so annoying, they make you want to scream. Here’s 20 of the worst offenders.
There’s specific lingo in any industry. Buzzwords, if you will. Get a group of friends who work together for beers after clocking out, and chances are you’ll get lost quickly once they start trading war stories – outsiders beware.
But, there’s one community who puts even nurses (marry a nurse, and you’ll learn what prophylaxis means) to shame with insider speak and bullshit buzzwords: the tech community.
Tech folks are like business and marketing people but mutated. There’s so much free-flowing jargon that goes unchecked and evolves a la Origin of The Species within days. The words and phrases become gospel and, before you know it, people are sharing these nonsense phrases that become the industry norm, leaving anyone on the outside scratching their heads, trying to decipher the tech code.
But, as the language of tech ebbs and flows, there are linguistic potholes so over-used, so annoying, they make you want to scream. There are words used so out of context that make you want to turn them into a snarky meme and pass it around the office because you’re a jerk like that. (Well, I’m at least a jerk like that.)
These are some of those words.
The words that need to die a horrible, 24 hour, “what does it all mean” death.
Words that should be locked away in a prison so vile Charles Manson would be like, “Nah, bro. I’m good.”Please don’t use these words in your marketing, pitch meetings, or just ever. They suck.Click To Tweet
Strap in and lock it down, here we go:
Can’t we just say “everyone knows what’s going on” instead of sync? This is one of those metaphors alluding to tech as melded with the products and culture, serving as interchangeable. We’re people, not iPhones to be plugged into our laptops. We don’t need to sync. We can meet up.
Robust is coffee, a strong tea you imported from India. It’s not a tech software experience. A can of Folgers can claim to be robust, your project tool cannot share this claim.
3. Pain point
Are we still using this one? A pain point is an elbow that’s got an owie, not what a customer thinks sucks.
I’m delighted to eat an excellent meal or get an unexpected call from an old friend. I’m delighted to leave work early to have drinks. I’m not delighted to use enterprise software. Sure, it makes my day easier. Does it offer a view of heaven when I can use self-service? I think not.
One of the godzillas of Jargon Mountain. I get that this worked in context a few years ago. But, now? You’re not “the Uber of…” and you’re not “disrupting” anything.
You built a parking app, Pat. You didn’t change the world.
If you dethrone Facebook, you’ve disrupted the world. ‘Til then, keep your pants on. Your algorithm for the best pizza place in town ain’t changing the block, let alone the face of communication.
6. Game changer & Change agent
Does anyone buy into this one? Was the game changed? This goes in the bin with “Disrupt.”
7. Bleeding Edge
Some jerk in some office decided “the cutting edge” wasn’t enough. It wasn’t hyper progressive enough, so they labeled their work the “bleeding edge”.
If this phrase were any more douchey, it would have a neck beard and a fedora and argue the tenants of socialism on IRC with strangers while sipping Mountain Dew.
8. Dog food
Who came up with this? When did a beta test get labeled as “dog food” I’m still lost on how this one became the industry standard. “We’re eating our own dog food.” This doesn’t even make a lick of sense, people. Just say we’re testing something. It’s a lot easier.
What happened to just saying you agree? I thought alignment was for tires, not for working. I’ll give you parallel, but alignment? Not buying it.
Pivot is just a fancy, non-finger point-y way of saying change. And typically, that change is reacting to something not going the company’s way. “Pivoting” means reacting to bad news or undesired outcome and making everyone involved feel smarter about the process.
Unless you’ve built software that cures cancer, does something better than Elon Musk, or gets you laid faster than Tinder, you’re not revolutionary. You’re an element of evolution in a steadily progressing world.
12. Internet of Things
I still don’t even know what the hell this means. Really. It’s one of those phrases people use and pretend to know but really don’t.
I thought bandwidth was Internet stuff, not how busy you are at work. Can’t we say, “if you’re not too busy,” instead of, “if you have the bandwidth,”..?? These are people, not routers.
14. Low-hanging fruit
You mean the easy work? “Easy win” even applies here. But the whole gardening metaphor is tired. It’s ok to say, “Do the easy work first” in a meeting. Hiding behind a metaphorical phrase doesn’t make the work any less important.
Do we need to break everything down into words to make the process more complicated? Aren’t deliverables, just work? It’s an adjective to describe what work you’re completing… so… it’s just work. Throw in a “key, ” and you’re jargon-y as all get out.
16. Circle Back
Translation: I don’t want to continue talking about this right now, so I’m going to schedule more pointless meetings to discuss this thing I don’t understand and don’t want to talk about in a few days. Likely, scheduled on your lunch break.
17. Action item
What happened to the good ole’ “to do List”? Instead, we’ve got “action item”. You come out of a meeting with a sore ass. The boss pounds on your for the stuff you need to do. You’re up to your ears in homework, yet, it’s not work you need to do – it’s “action items, to be delivered upon.” WHAT THE HELL DOES THIS EVEN MEAN?
18. Take it offline
If there was ever painful corporate-speak, this one is a granddaddy. Instead of burning minutes in a meeting, someone will announce, “let’s take it offline.” Always happens. What about, “let’s talk about this face to face,” or “I’ll swing by your desk”, or “let’s figure this out.”
We appreciate you not annoying the rest of us with your A+B problem, but we’re not all living in the matrix. Or, at least we think we’re not.
Committing to something – a culture, an idea, a feeling. We’re equating life to a poker game and expecting everyone to get the idea, too. So lame.
20. Rockstar – Ninja – Wizard – whatever descriptive verb
This one. Holy horse crap. Can we PLEASE STOP with trying to slap a descriptive label on good work? I get it. You want to exclaim your person is a badass, and they’ve got chops. But this labeling of people in fantastical ways just sucks. When did the craft of a ninja, or the fantastical abilities of a wizard relate to code? And the rockstar thing?
Dudes, you’re not Keith Richards, you wear a startup hoodie and complain when you’re not getting free lunch at work.
Also, these names suck because they imply some male-dominance-cum-brogrammer mentality. They’re shadowy ciphers that are such machismo, it’ll barf up a steak. When a woman gets labeled a “ninja” it’s in an entirely different context, and that’s not cool. Writers have to get creative and use terms like “acrobat” or “juggler” to give off a sentiment of equal playing field, and it’s obnoxious. Just stop with these lame titles.
And there you have it. 20 bullshit buzzwords that should be banned forever and ever. Comment away, and add the jargon you loathe in the comments section. If it goes well, maybe they’ll ask me to write a part two, and we’ll make even more people mad.
This editorial was first published here in 2017.
Study says women need to be seen as “warm” to be considered confident
(EDITORIAL) A new study reveals that despite progress, women are still successful when they fall into a stereotype. Let’s discuss.
About 15 years ago, I took a part-time job in a mental health clinic handling bookkeeping and billing. I had absolutely no idea what I was doing, but I attacked the job with what I felt was confidence. For the first few days, I simply felt as if I was an imposter. I kept asking questions and pushing forward, even though I didn’t make much progress. Within just a few days, I felt the hostility of the office manager.
It got progressively worse, and I couldn’t figure out what the heck I’d done to make her so confrontational with me. I thought I was pleasant and respectful of her position, and I was getting along with the other employees. When I talked to our boss, I was told that I intimidated the office manager. HUH? Me? Intimidating? I was a complete mess at the time. I could barely put together a business casual wardrobe. My emotional health was so fragile that I rarely went anywhere new. And she found me intimidating?
Researchers have been studying how people judge others. Susan Fiske, researcher out of Princeton, found that competence and warmth are two of the dimensions used to judge others. Based on that research, Laura Guillén, Margarita Mayo, and Natalia Karelaia studied the competence and warmth at a software company with 236 engineers. Guillén and her team collected data at two separate times about these engineers and their confidence and influence within the organization.
They found that “men are seen as confident if they are seen as competent, but women are seen as confident only if they come across as both competent and warm.
Women must be seen as warm in order to capitalize on their competence and be seen as confident and influential at work; competent men are seen as confident and influential whether they are warm or not.”
We encourage women to be confident, but based on current research, it may not be enough to close the gender gap in the workplace. A woman must be seen as helpful and dedicated to others to have the same influence as a man. As a woman, it’s easy to be seen as the #bossbitch when you have to make tough decisions. Those same decisions, when made by a man might be considered just “business as normal.”
I guess the lesson is that women still have to work twice as hard as men just to be seen as equals. I know that I have to work on empathy when I’m in an office environment. That office manager isn’t the only person who has thought I’m intimidating. I’ve heard it from it others, but you know what? As a self-employed writer, I’d rather be seen as undeterred and daunting than submissive and meek.
This editorial first appeared here in 2016.
Business Marketing2 weeks ago
What skills do marketers need to survive the AI takeover?
Business Marketing1 week ago
Coworkers are not your ‘family’ [unpopular opinion]
Business News5 days ago
Everyone should have an interview escape plan
Opinion Editorials1 day ago
How strong leaders use times of crises to improve their company’s future
Business Finance1 week ago
Is the convenience of payment apps worth the risk of fraud?
Business Marketing2 weeks ago
These tools customize your Zoom calls with your company’s branding
Business Entrepreneur1 week ago
Why and how to acquire a business – 4 tips for radical success
Tech Gadgets1 day ago
Recording your smartphone’s screen is easier than you think