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In Fiduciary, When the Music’s Over, Turn off the Lights
If you asked a thousand people whether it’s permissible for the buyer’s agent to contact a Sacramento listing agent after closing, expecting her to further question the seller on the buyer’s behalf, I bet 999 of those people would respond: why not? It seems innocent enough. The buyer forgot to ask about something or discovered some new fact and would like more information, right? I mean, who else would the buyer ask? Buyers don’t always understand fiduciary, and neither do agents.
Buyers and sellers also don’t typically trade phone numbers or email addresses prior to closing in Sacramento. It’s not unusual for a buyer to ask his agent for help under those circumstances. The problem with it, though, is the buyer’s agent is no longer the buyer’s agent. Once the transaction closes, the fiduciary relationship that exists between the buyer and the buyer’s agent is over. When the music’s over, turn off the lights.
Now, of course this doesn’t mean an agent can’t remain friends with her client, but she can no longer work in an agent capacity. Moreover, to do so might be considered to be an unauthorized practice of law, depending on what the former buyer’s agent says and does.
This also means the fiduciary relationship that once existed between the listing agent and her seller is over. The most anybody can really expect is for the listing agent to pass along the buyer’s phone number to the seller. Yet, there are agents for whom that line is often blurred. What they hear is a former client needs help and they want to help. It’s a natural reaction.
When the music’s over, turn off the lights. Fiduciary no longer exists. Let’s say a buyer asks the listing agent to quiz the seller about pest work in the basement that was completed years ago. Escrow is already closed. That’s a can o’ worms that should have been answered during escrow. Jumping into the middle of that situation is like asking for trouble.
That’s like asking a seller to sign a disclosure after closing. It’s not a disclosure if escrow is already closed and it can’t be signed.
When the music’s over, turn off the lights.
Sellers Who Bare Souls Before Hiring a Sacramento Realtor to List Their Home
Do not disclose secrets until you hire a Sacramento REALTOR.
Home sellers say the darnedest things when they are talking to a Sacramento REALTOR about selling that home. There are times I might even stop them, but those are the occasions when I know that I will be their listing agent. In other cold-call situations, I might let them continue to babble. The reason I might stop them is because they will say something that I may file away in the back of my mind, when I don’t need to know it. Something like: my bottom line price is XYZ. It could be; it could not (which is a whole ‘nother blog). In any case, I have no business obtaining that knowledge.
My real estate business — one of the reasons I work as a premium agent and not a discount agent — is built on a passionate bedrock of commitment to obtain a full-price or higher offer for the seller. To do what is absolutely best for the client. What is best for the client is that I not possess any inkling of a bottom-line price. I don’t need to know. It’s not my business to know how little the seller might take. I maintain a fierce loyalty to my clients.
However, if I am not the listing agent, then all bets are off. I have no fiduciary to the home seller. Sometimes, I will meet with a seller whose goofy idea is to flatter by proclaiming that they have placed me on the top of their list for hiring a Sacramento REALTOR, but then say they want me to discount my standard commission or perform some other task that is outside the realm of reality. Or, maybe they’re just trying to confirm a price range because they’ve already decided to hire their sister-in-law, and are seeking free advice, I dunno. But the point is if they are not hiring that Sacramento REALTOR in a fiduciary capacity to represent them as a listing agent, I think they forget that we real estate agents work with buyers as well.
They might forget that they already disclosed their bottom line price, all of their fears and other important information, which buyer’s agents will use to their advantage. They might say: the pool needs work so we expect to pay a big credit to the buyer for that. Or, buyers can repaint those red and pink walls and we’ll give them money. They often don’t realize that buyers don’t want to paint and, if they must, they will deduct many thousands of dollars from the sales price. It’s not two $25 cans of paint in a buyer’s mind, which it is to the seller. It’s tough to understand sellers who want top dollar and refuse to neutralize god-awful colors. It’s one thing if you live in a culture like Mexico or Miami. Quite another in Sacramento suburbia. But if I am not the listing agent, I’m not there to give tips, drawn on my 40 years of experience in the business; I reserve pertinent advice for my own clients.
The main thing is home sellers should not share personal information or facts that can affect the sale of their home while talking to a listing agent who is not their agent. Because that listing agent might also be a buyer’s agent with a buyer underfoot who will now use all of that information to her advantage. It’s not unethical. That agent enjoys a fiduciary relationship with her buyer. Different priorities. And that buyer’s agent might be a shrewd negotiator, especially after the sellers have moved out of state, expecting escrow to close.
Sellers don’t often think of things that can come back to bite.
