Who Does your Agent Work For?

WHO DOES YOUR AGENT WORK FOR? (MAKE SURE IT'S YOU)

Many years ago when I was living in Cincinnati I went to a business luncheon and the Key Note Speaker was a local journalist and ex-mayor of Cincinnati, Jerry Springer. There were only about 40 to 50 in attendance so it was a rather intimate gathering. I have always remembered something Jerry said about interviewing a potential news source. He said that he got the most important information from his sources after the interview was over; after he turned off the camera, turned off the microphone, or put his notebook away. The source would then let his guard down, assuming he was off the record, and he would wind up thinking Jerry was just a friendly guy that he could confide in. The source would "forget" who he was talking to.
In real estate, never forget who you are talking to. Is that agent you are chatting with working for you or for someone else? In fact, is that agent that you HIRED working for you or someone else? In Florida, a residential real estate licensee has three clear roles. He can act as
1. A single Agent, or
2. A transaction Agent, or
3. No Relationship at all
In all cases you should assume that the agent works for the OTHER GUY in the transaction unless you have signed a document that makes him YOUR SINGLE AGENT. Be careful what you disclose about your motivation, how high or low of a price you will take or pay, or any personal information that might effect negotiations (like your pending divorce or financial status).
When taking a listing for a property most Florida real estate agents represent themselves as a transaction broker. A transaction broker owes no loyalty, obedience, full disclosure, or full confidentiality to his client like a single agent would. Most agents find in easier to act is this role than as a single agent.
As a broker I always prefer to sign a single agency listing. I like to know very clearly who I am working for and who I owe loyalty to. It's less confusing for me and serves the client better.
When you are touring open houses or models for a developer, you can be sure that the agent is either a single agent for the seller or at the very least a transaction agent. Having a sharp agent as a single agent representing you and your interests is a wise move. There is a well believed myth that if you want to make the best deal on a purchase you should call the agent that has the listing. The popular thinking is that you can make a better "deal" when only dealing with one agent. The theory is that he has more room to negotiate since there is only one commission. It is my belief, however, that you are ALWAYS better off with good, professional and skilled representation in negotiations than if you deal on your own. The key here is the quality of your agent and how he can negotiate.
I have found that some agents not only don't work for their client very well, they really are just working for their own objectives. A few years ago I made an offer on a commercial condo here in Fort Myers, not too far from my home. I represented myself to the listing broker as an agent and made an offer on the property that was close to asking price. In the contract I was entitled to half the commission. Later that morning I was discussing this potential purchase with one of my friends. He knew the seller well. I asked him to do me a favor and put in a good word for me, tell him I was a serious buyer etc. My friend later reported to me that the seller had a few other offers that same day. I promptly called the listing agent and told her what I had heard and that I would remove all financing contingencies, I would shorten the due diligence period and told her very clearly that I wanted the place and there was room in my price. I clearly wanted the condo.
She called later that day to tell me that the seller had accepted another offer. No counter. No negotiations. I was furious. Indeed I would have paid OVER the asking price and was prepared to do that. Very simply the listing agent was not looking out for the best interest of her client. She was more concerned about getting the full commission - EVEN THOUGH TAKING A HIGHER THAN ASK OFFER WOULD HAVE BENEFITED THE SELLER. You see, the client was paying six percent no matter what. I lost the deal and the seller lost another $10,000 or so.