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Representing Two Buyers for Land Park Homes
Representing two buyers for the same Land Park home doesn’t happen very often. But in our crazy Sacramento real estate market, it’s possible. Yup, an agent can represent more than one buyer to buy the same home. Especially with limited inventory. Our California Association of REALTORs team of lawyers have even designed a form for this called a DA — Disclosure and Consent for Representation of More than One Buyer or Seller. It lets an agent engage in dual agency, too, as well as disclose the terms and conditions of an offer (without a confidentiality agreement). When I read that document, I no longer wonder why the public has problems with trust issues concerning real estate agents.
Can you imagine a lawyer representing two different clients who were competing with each other? I work with a lot of lawyers. I’m not sure why lawyers tend to gravitate toward me but I like to imagine we speak a similar language; we probably approach the same subject matters in an analytical way. They know I will be direct. I suspect they appreciate that directness as not every person does.
There are some Sacramento real estate agents who won’t work with lawyers. They flat out refuse. They call lawyers “deal killers,” and maybe they’re worried a lawyer will sue them; I don’t know. The way I see it, I’m least likely to get sued by a lawyer, knock on wood. And I really love the fact I get to tell them that I can’t give legal advice. Especially when they ask me for legal advice. But I also realize that lawyers specialize in certain types of law and not every lawyer knows much about real estate, much less short sales. But they do understand strategy. I respect lawyers, and I like them. I wish all my clients were lawyers. That would be a happy day for me.
I recall a few years ago I was working with several lawyers to buy homes in Land Park. This was back when law firms were flourishing and hiring new lawyers, bringing new talent to Sacramento. As luck would have it, both of these lawyers decided they might be interested in buying the same home. Let’s just say I was not about to whip out the DA form. Instead, I explained the problem to both of them individually.
I suggested one of them could choose to work with me and the other could choose to work with a different buyer’s agent. However, as I reminded them, the lawyer who drew the short end of the stick would be competing against me in negotiations. Which Land Park agent did they want to represent them? This Land Park agent or my associate? Put that way, one of the lawyers decided to look at a different home and keep me as their agent. The other lawyer bought the home through me.
Not every agent employs this approach. In fact, not every agent who represents more than one buyer for the same property even uses the DA form. I received this week two different offers on the same listing from an agent, and no DA form with either offer. The second offer was much better than the first offer. Coincidinky? We just don’t know.
Selecting a Land Park Agent as a Dual Agent
When a Sacramento home buyer says she wants only to talk to the listing agent, that is generally not good news. I often ask: Why? Is the house on fire? Because I’m telling you, if the house is not on fire, telling the listing agent that one wants to deal only with her is absolutely insulting. It’s insulting, it’s irritating and it’s idiotic. There, you have three I-words to describe that kind of thinking. It’s implying that the listing agent is unethical at best and establishes an adversarial relationship at worst.
True story — some years ago, my neighbor decided to buy a home in Land Park. Because I am a Land Park agent who lives in Land Park, she asked me to show her homes in Land Park. We worked together for several months. She said her reason for selecting me was due to the fact that Lyon Real Estate is the market leader in Land Park. She figured our buyers hear about new listings first, they get an edge, and they do. Then, all of a sudden, her enthusiasm vanished. She said she no longer wanted to buy a new home. I guess she figured I would never find out what she did, but there are no secrets in real estate. Certainly not in Land Park real estate.
Despite the fact that she had signed a buyer’s broker agreement with me, she went directly to the listing agent at a competing brokerage and bought a home. When I asked her why, she became very sheepish and apologetic. She said she asked that Land Park agent to represent her because she believed if she did not, she would not have been the lucky buyer to buy the home. There were multiple offers at that time. She truly felt that she had to make sure the listing agent would be paid both the listing commission and the selling commission in order for her to have a shot at home ownership. In other words, she wanted an agent who would throw her grandmother under the bus. She evidently found one of those.
There are Land Park agents in Sacramento and elsewhere who will give priority to their own buyers with their own listings, I’m sorry to say. That kind of practice is unethical, but they do it anyway. Who’s to prove it? That’s the nasty underbelly side of real estate. Everybody suspects it exists but nobody talks about it.
The implication when home buyers want to buy only from a listing agent is that the listing agent will do whatever it takes to put the deal together. It’s saying we agents are motivated solely by greed. It’s saying maybe we will push the seller and persuade the seller to take a buyer’s lowball offer because we’ll get paid more money for a lowball offer than we would to suggest the seller take a higher offer from a buyer represented by a different agent. I know very few agents like that. But buyers seem to think these kinds of agents are a dime a dozen. A few bad apples give all of us a bad name.
This particular buyer called me again many years later. She noted that I am a prominent listing agent now, having worked my way up the ranks. I am a top producer. I list more than a 100 homes a year. She asked me to work with her. She is still working with a Land Park agent but asked for first shot at my listings, too. Now, she wants to buy investments.
I don’t throw my sellers under the bus. I don’t play favorites. I don’t give priority to anybody but to the seller whom I directly represent. That investor is barking up the wrong tree. If I personally represent a home buyer, my agency and duty is to that buyer. If I personally represent a home seller, my agency and duty is to that seller. I don’t want to mix the two through direct dual representation. It makes people uncomfortable, and it makes me uncomfortable. That’s not to say if a Team Member represents a buyer it won’t show up as dual agency at closing, but I prefer a little more arm’s length.
I never want to feel conflicted about fiduciary. Without saying, ethics is important. That’s one of the secrets to my longevity in real estate and why I’ve lasted more than 35 years in this business.
