North Fork, NY Real Estate Blog OptionsRealty.com » Blog Archive » Naughty “North Fork, Long Island” Realtors, Part 2

Naughty “North Fork, Long Island” Realtors, Part 2

June 29th, 2007 category: Buyers, Real Estate Philosophy, Riverhead Real Estate, Sellers, Southold Real Estate

Ok. You understand the mls system, and you’re now clear on sign rider games that limit the exposure that your home may get as a result of the silly EXCLUSIVE sign rider practice.
Don’t believe the ads; look at it this way: if Joe Shmoe is perusing Realtor.com in Garden City, and your home is not in the mls or Realtor.com, he will not have access to it. PERIOD.

Nor will his Realtor, because there is no way for a company of any size to insure that every single listing reaches the desk of every single real estate professional without the use of the MLS system.

Let’s move on to another trick of some North Fork Realtors: some companies are not offering payment in the mls system to BUYER BROKERS. This is made clear in the mls, as illustrated below.
BEFORE YOU READ FURTHER, PLEASE READ THE DEFINITION OF FIDUCIARY.

YOUR REALTOR AGREED, WHEN JOINING THE BOARD OF REALTORS, AND THE MLS SERVICE, TO THIS EXPECTATION OF BEHAVIOR when representing you, the seller.

Buyer Brokers are now very common, and absolutely no threat to you, the seller. A buyer broker simply represents the buyer- if your buyer has an attorney (as most do) then they are already receiving the benefit of a third party watching out for them. Their Realtor has a fiduciary responsibility to their buyer, in much that same way that your listing agent has a fiduciary responsibility to you, the seller.

If you are selling your home, you don’t care where the buyer comes from, as long as he is ready, willing, and able to purchase and close on your home, right? Make certain that your listing company agrees. If they don’t, use a different listing agency. You’ve agreed to a commission amount; it will likely be split between two companies. No effect on the total amount paid out that you have accepted- just split.
Because representing the buyer has taken the place of dual agency to the extent that most conscientious agents understand the dilemma (you simply cannot represent a buyer and seller adequately and with equal fairness to both) it is now required that buyers, if they choose to, sign with their real estate salesperson or broker a buyer broker agreement.

An example of the old days, without agency disclosure:
A buyer expresses an interest in your property, and calls. Your listing agent takes them through your home, and the buyer decides to make an offer. The offer includes a price lower than your listing agent understands to be your minimum, but the buyer makes it clear that this is as high as he will go. Your listing agent now faces a dilemma-encourage you to go lower than planned, or let the buyer look elsewhere.

Walk away from the full commission, or encourage you to rethink your price. A conflict of interest for you, the seller, to have representation for a buyer through your listing agent. Serving two masters rarely works.
SITUATIONS LIKE THIS OCCURRED FREQUENTLY ENOUGH THAT THE LAWS WERE CHANGED IN ORDER TO PROTECT BOTH YOU, THE SELLER, AND YOUR BUYER. The result was a disclosure of exactly who represents whom. As a buyer representative, the second buyer now has an agent that will diligently pursue obtaining the property for their buyer without compromising your position, as a seller. No temptations.

If your listing company declines to compensate a buyer broker through the commission that YOU, the seller, are paying, via the mls, then you are losing out on additional traffic and buyers to your home. Simple.

What is the reason for buyer broker exclusion, in light of the fact that it is very, very common? Once again, GREED, in this writers opinion. Why on earth limit prospective buyers, and try to force them to call the listing agency directly? It’s that pesky GET BOTH ENDS OF THE COMMISSION thing again. At your expense.

The problem is, if a buyer has signed a buyer broker agreement, they’ve demonstrated a commitment to having their interests watched out for, so they will likely pass on your house. While opinion may not count for much, it’s not rocket science- a pretty obvious elimination of prospective buyers.

If all of this was explained to you at the time of your listing agreement, and you made the decision to eliminate the buyer broker prospect, it is this writers opinion that a) you were not clear on the detrimental nature of losing out on buyers for your home or b) you are not motivated to have your home available to the buying public. This is your choice; your Realtor accommodated you.

This decision, as the consumer, is YOURS TO MAKE. At Options Realty, due to our fiduciary responsibility to you, the seller, we cannot in good conscience eliminate buyers for your home, and as a result, do not participate in this kind of exclusion. As experienced professionals, we know that it is a detriment to you, the seller.

Changes in real estate practices are upon us. Old school mentality of “get both ends” has no place in the current environment of real estate sales. It never did; but we’ll defer to local customs and ignorance as an excuse. There are no excuses, in a tougher market or ANY market, for not adhering to FIDUCIARY to the letter. Insist on it- you’re the consumer, and YOU CALL THE SHOTS. Just our opinion…

RANDOM EXAMPLES OF MLS INCONSISTENCY- AS OF JUNE 20, 2007 12:32 PM:

ML#1906189
SA (selling agency): commission amount indicated.
BA (buyer agency): 0
Br A (broker agency): 0

ML#1961151
SA:commission amount indicated.
BA:0
Br A:commission amount indicated.

ML#1907274
SA: 0
BA: 0
Br A:commission amount indicated.

ML#1941164
SA:commission amount indicated, followed by an (A)
BA: TBD
Br A: commission amount indicated

I clicked on six RANDOM mls listings; FOUR OUT OF SIX came up with problems for you, the seller. Four out of six. Frankly, if I were an out of town Realtor, I wouldn’t bother showing any of these properties. The fourth one made me laugh- who is going to show a property with “TBD”? If I wanted to show it, my offer would be a tongue in cheek 20% commission request- does “TO BE DETERMINED” mean that I can submit whatever I’d like, as the buyer broker? RIDICULOUS, in this writer’s opinion.

LET’S KEEP IT SIMPLE. OFFER TO PAY ALL PARTIES INVOLVED IN THE SUCCESSFUL SALE OF YOUR HOME; MAKE IT EASY FOR ALL BUYERS TO ACCESS YOUR PROPERTY, AND DON’T GET INVOLVED, AS A SELLER, WITH ANY EXCLUSIONS TO YOUR TRANSACTIONS THAT ARE A DETRIMENT TO YOU.

A “Whale of a Tale” (true story): a buyer in the North Fork recently wanted to buy a house through his buyer broker, all agency paperwork signed. The conversation to the listing “professional” went like this:
Buyer broker: “We have an offer on your property at ——. It’s a buyer agency offer.”
Greedy listing agent: “That property doesn’t offer buyer broker agency.”
Buyer broker: “Well, the mls states that it does.”

STOP RIGHT HERE, SELLERS. This individual, rather than having an interest in an offer on your property, is more interested in what, as a listing company, you, as a seller WON’T do (or pay). The commission has been agreed to; it doesn’t impact the amount that you’re paying, and yet…your listing agent is making it as hard as possible for people to make offers on your home. Unacceptable, when your best interests are supposed to be at the forefront.

NORTH FORK REALTORS: You have a great tool with the mls service. Use it responsibly, and with your sellers fiduciary outcome at the forefront. Don’t grasp at the disappearing double end. Just get the home sold. This market is no place for games. FIDUCIARY. PERIOD. Just this writer’s opinion…

2 Responses to “Naughty “North Fork, Long Island” Realtors, Part 2”

Michael Daly Says:
August 1st, 2007 at 8:11 am
You’re absolutely right! MOST of the agents on the East End (only some of which are REALTORS) don’t understand the concept of fiduciary responsibility - or do, and refuse to acknowledge it.

It is common for brokers to limit the exposure of their clients listings in hopes of “selling it themselves”.

Right now, on the South Fork, every one of the dominant agencies is holding back listings from top exposure either by:
1- Not being a member of MLS
2- Being a member of MLS, but not putting many/most of their listings on it
3- Not co-broking certain listings with ANY other agency (without instructions from their seller), and/or
4- Only co-broking with some agencies in the market (without the instructions of their seller) as a way of restraining trade and starving competition.

Asisde from being in violation of public trust (no wonder the public has such little trust in real estate agents/brokers) and a breach of fiduciary responsibilities, these practices are against the Realtor Code of Ethics, the NYSAR code of ethics, the NYS Department of State regulations and are the exact issues that the US Department of Justice and the FTC are monitoring and taking legal enforcement action on all over the US.

Obviously, the have not made it to the East End of Long Ilsand, and when they do…
laurie mindnich Says:
August 1st, 2007 at 10:13 am
Makes one want to pick up the phone and make a few calls, huh? LIBOR/mls need to be informed of specific “Realtor” practices; the DOJ needs a letter sent…I have some time today!