The Supreme Court VS. Homebuyer Associates
The Supreme Court VS. Homebuyer Associates
“…a long habit of not thinking a thing wrong, gives it superficial appearance of being right, and raises at first a formidable outcry in defense of custom. But the tumult soon subsides.
Time makes more converts than reason. I offer nothing more than simple facts, plain arguments, and common sense.” Thomas Paine
In the times we live, beyond real estate, consider Paine’s quote again. Go ahead.
Thoughts, which I’ll keep simple.
“…a long habit of not thinking a thing wrong:” You may have read about the United States Supreme Court and the number of extravagant gifts accepted by its members – those appointed by Democratic and Republican Presidents – and the members’ failure to disclose those gifts. This lack of transparency leads to a lack of trust in an institution.
Transparency engenders trust. As regards real estate, when your money is involved, you deserve transparency. Absent transparency you should demand it. The problem for consumers? They don’t know what to demand.
Homebuyer Associates was started because the real estate industry failed to disclose (be transparent) the conflicts of interest affecting buyers, i.e. that agent(s) did not work for home buyers. Thirty-eight years since we began, consumer confusion remains.
As an aside, I recently took a call from a past client now in California. The past client wanted me to look at information for a condominium she was interested in and referred to the agent as “her agent.”
In my review I noted it was not “her agent” as she didn’t have a signed contract with the agent. The agent failed to disclose 3 critical matters that could cost multiple thousands of dollars – not by design is my guess, but by lack of experience and knowledge. To quote William Faber of Faber college, “Knowledge is good.”
Our approach? Simple common sense. Be transparent.
Below are examples of matters demanding transparency:
1. The selling agent was offering a $5,000 bonus incentive to the buyer agent who closed the sale before August 5th. Might the buyer be pushed to close sooner than is financially advisable?
2. The Seller was offering a 2.8% co-broke for any offer over $575,000. Might the buyer pay $576,000 for a home worth $565,000?
3. Agents can earn a higher commission split from sales within a company, i.e., the listing agent and “buyer agent” work for the same company.
Might the buyer initially only see listings by the company the agent is part of?
None of the above incentives must be disclosed to home buyers. In fact, the information is contained in an area of the data sheet that is limited to agents.
The Supreme Court would find nothing wrong with numbers 1,2 and 3. Homebuyer Associates does.
4. Recently we helped a client locate and negotiate a home purchase. Strategically it made sense to buy before selling. While we don’t sell homes, we counselled our clients on their sale.
When our clients sold their home, agent A from Company Y listed their home for sale.
Agent B from Company Y “represented” the buyer of the home.
The interesting part? Agents A and B were part of the same real estate team. Am I to believe Agent B would advocate for the buyer with Agent A when they were on the same real estate team?
Our counsel provided information from a source (Homebuyer Associates) that “didn’t have a horse in the race” as they say.
…a long habit of not thinking a thing wrong. Thinking about conflicts of interest in real estate may help you save money. In your daily life it may help you lead a more honest and fulfilling life.
If you have an interest in avoiding conflicts of interest, contact us and we will set a time to have a cup of coffee to listen and talk. A helping hand so to speak.
We remain working with clients in this difficult real estate market but I’ll now leave you alone until the start of the new year. In the meantime celebrate thanks, maybe donate time or money, and then have good holidays.
Thanks for reading,
Michael D. Holloway