As a Realtor in Florida, I read your articles in our local paper. I think you should have clarified that each state has different rules regarding agency representation. In Florida, we are deemed to be transaction brokers and that is what almost all Realtors are as a default. We have limited representation. We are not dual agents. Very few choose to be single agents, and if they do, then that must be disclosed in writing to both parties.
We think you must be referring to our article on a home buyer looking for a “buyer-only” real estate agent. Yes, we should have noted that each state has its own peculiar laws regarding how real estate agents may interact with buyers and sellers. But the gist of our answer was to describe generally how buyer and seller real estate agents work with their customers.
A seller real estate agent will work only for the seller and have only the seller’s interest at heart. A buyer’s broker will work only for the buyer and have only the buyer’s interest at heart. As you describe it, you’re a “transaction broker” and you don’t appear to have a duty of loyalty to either the buyer or seller.
We think it’s unfortunate when a real estate agent is only a “transaction” agent and does not owe a duty to either party. When a seller is selling the most important asset of his or her life, he or she should be surrounded by people who have his or her best interest in mind, particularly when the listing agent (also known as the seller’s agent) will earn a commission of about 6 percent of the sales price of the home, which is then shared with the agent who is supposed to be representing the buyer in the transaction.
We know why states have enacted such laws — to keep agents from legal jeopardy if they wind up representing both sides of a single transaction or say something they shouldn’t — but we think it’s a huge mistake to decouple an agent’s interests from his or her clients’ interests.
We’d rather see real estate agents be clear about who they really represent and be careful about how they handle those transactions. When agents represent the “transaction” and say they are “transactional agents,” they are really saying they care only that the deal closes whether the sale or purchase is in the best interest of the buyer or seller.
As technology changes the marketplace, we worry that real estate agents who are only transactional agents will lose out to technology.
If buyers know that their agents don’t have their best interest at heart, they might as well shop online for a home and seek out homes by themselves. On the other hand, a seller may rather pay a discount broker a fee to show a home and save money along the way with a reduced commission, as the seller comes to realize that the listing broker is there only for the transaction and not for the seller.
Yes, many states have different ways of treating real estate agents and their interactions with buyers and sellers. Our article disclosed the different types of agents. As you have pointed out, many states have different rules relating to real estate agents, and you’ve drawn our attention to real estate agents that are transactional agents only. Thanks for your comment.
Ilyce Glink is the creator of an 18-part webinar and e-book series called “The Intentional Investor: How to Be Wildly Successful in Real Estate” as well as the author of many books on real estate. She also hosts the “Real Estate Minute” on her YouTube channel. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact them at ThinkGlink.com.