Dear Julie,
Julie, as you and I have been discussing your work as a Charlotte real estate broker, I thought I might share with you a situation that I experienced in the summer of 2005.
My wife and I had owned a condominium since 1996 at Surfside Beach S.C. Like most every other piece of coastal property, the appreciation in value was such that we decided to sell.
We engaged the real estate agent that had previously arranged the purchase. This was done as we felt comfortable with her real estate skills and demeanor although we had not spoken to her in eight years. Upon my verbal agreement to hire her, she immediately told me she had an anxious potential buyer for our specific condo. That evening after I engaged her as our agent, she faxed the contract to me. I read it and we did discuss briefly why I should or should not authorize her to be a co-broker.
Quite frankly, I do not recall receiving any information highlighting the advantages or disadvantages of a co-brokerage arrangement as a seller of real estate. Nevertheless I signed it and we ended up with a dual agent agreement. All went well until that anxious buyer didn’t like a couple of loose outlets and cancelled their signed contract after the inspection. At that point when I began to ask questions, she informed that because she was also representing the potential buyers, she couldn’t answer certain questions I was asking. In addition, when her boss later purchased our property, the attorney handling the closing also informed me when I asked a question, that he couldn’t answer it as he represented both buyer and seller.
Julie, I am a relatively sophisticated person in business matters, etc. but this one took me by surprise. I was wrong for not asking more questions as to what were the upsides and the downsides of authorizing my agent, who is engaged in selling my property, to act as the agent for both me and the purchaser or potential purchaser.
I can see no reason why anyone selling real estate should allow a dual broker arrangement. I paid a large commission to a real estate agent for selling my house. Unfortunately, while I felt the price I received was fair, I have no idea as to whether I should have received more. She made commissions on both sides, by not sharing any with a separate broker representing the buyers.
My concern in relation to others selling property is how many or few are aware what they are giving up when authorizing a co-broker agreement. I cannot imagine even one benefit to anyone in this type of arrangement except for the broker.
Whatever information is required to be given to clients by Realtors and other brokers (if there are any?), it should clearly spell out the disadvantages of this type of buy/sell arrangement. Extensive information is required to be given mortgage applicants as to their rights, what the terms of the contract means, etc.
All real estate brokers should be required to provide similar factual information, so the parties to a transaction can be well informed as to what the terms mean when they sign an agreement, and consequently, no one benefits except the broker.
Regards,
Larry Widis
