Yes, They Lie

Author: admin

Many real estate agents lie.

It is not that real estate agents are all crooks, far from it. However, the industry basically encourages real estate agents to mis-lead home buyers about many things.

One of the most disturbing and damaging things that real estate agents mis-lead consumers about is buyer agency.

Buyer agency has actually been around in the industry for 30 years, but up until agency disclosure laws were passed in the 90’s, most buyers didn’t know the service was available.

These days the real estate special interest groups have created new laws adding to the confusion.

Here is the 10 second overview:

1. The relationship you have with a real estate professional is determined by the brokerage, not the individual agent.

2. For a real estate brokerage to be a buyer agent takes a lot of additional training and communication between agents. Many agents in large brokerages don’t have much training or experience so the liability for big brokerages scared them into creating a new legal term. Designated agency.

3. The real estate trade organizations used their lobbiests to get laws passed to allow designated agency in Michigan. But the law firm that wrote the language is sloppy and the law is confusing and has a number of mistakes in it.

4. Many real estate companies in our area now want to trick you into thinking designated buyer agency is the same as buyer agency. It isn’t.

Here is an example:

An agent from a large firm helped a home buyer buy a home on Creal Crescent in 2007. That agent didn’t know that there are many sewer lines on the street that are failing. Other, more experienced agents in the company do. The inspector was not from the area and didn’t think to mention it to the buyer.

If the firm had been a buyer’s agent, the buyer would have found out about the issues. Since the firm’s policy was designated buyer agency, the buyer didn’t learn about the issue until after they bought the home and the sewer line issue came up. (The sewer line issue cost thousands of dollars to fix.)

Since it was common knowledge in the real estate company wouldn’t you think somebody from the company would have warned the buyer? Nope. Because they are a designated agency office. And they have the buyer’s signature on a document disclosing that they are just designated agents. (Even though the limitations of designated agency were never explained to the buyer.)

There are many differences between buyer agency and designated buyer agency.  As a buyer you get a lower level of service with designated buyer agency. And, you get zero loyalty. If the firm can make more profit by changing you from designated agency to dual agency they will switch. You give up your rights to your own advocate when you sign the designated agency agreement.

That is why so many designated buyer agents will claim to be buyer agents. They are afraid that once they explain the difference you will want to use a different company.

And if any real estate agent wants to challenge me on this, I welcome a public discussion on the topic. It isn’t my job to educated all the ignorant real estate agents and brokers, but I’ll be happy to do it in public. We’ll make a news event out of it so consumers can learn what the industry encourages.

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