This is what happens when you find yourself parsing sentences at well past 11 p.m. in the evening …
Continuing the line of thought from Tuesday’s post, here is the basic premise on which the argument against dual agency – the act of one real estate agent representing both buyer and seller in the same sale – is built:
“My job as the listing agent is to get the highest dollar amount possible for the home. My job as the buyers agent is to get the house for the lowest possible cost. Since these conflict, I can’t do both successfully.”
Except … if you’re job as a buyers’ agent is to help your buyers purchase a home for the lowest amount possible, you’re going to fail 99 times out of 100. And the flip side goes for the listing agent.
Follow my logic if you will:
A home is listed for $200,000. Your agent writes an offer for $180,000 and submits it to the listing agent. The seller counters back at $190,000. You gleefully move to the middle ground, accept the counter offer and everyone’s happy.
Did the agent who says her job is to help you purchase for the lowest possible amount do their job? Perhaps. Perhaps not. Let’s say this seller would have gone as low as $187,500 had then been pushed. Whether it was because your agent didn’t suggest countering back or because you decided $190,000 was fair, you didn’t purchase the home for the lowest possible price.
In short, your agent failed – at least if she positions her role as helping you purchase for the lowest possible price.
The truth is as a buyer you’re rarely going to purchase for the lowest possible price. And as a seller, you’re rarely going to sell for the most the market will bear. At some stage of the negotiations, the level just shy of the “highest/lowest” will become “good enough.”
Relating this back to dual agency, there is nothing in the process of one agent representing both buyer and seller that inhibits both buyer and seller from arriving at a price that’s “good enough.” In fact, it’s possible that by limiting the variables by having only one agent in the mix, the process goes more smoothly – both buyer and seller are staring at the same set of data, the same comps, the same interpretation of market condition.
How important can this be? Check recent answers on Trulia Voices and you’ll still see some agents proclaiming that the Phoenix real estate market is a buyers’ market when that hasn’t been the case for months. Not everyone has the same read on the market.
Of course, if an agent is out of touch with market reality, that theoretically disadvantages both buyer and seller equally so at least both sides are equally blind as they negotiate.
Is there opportunity for unscrupulous behavior on a dual agency transaction? Absolutely. Does that reality doom everyone who dares practice dual agency to an eternity trapped in the charred walls of the damned? Absolutely not.
[tags]Phoenix real estate[/tags]