A True Story As Told to HREN by a Hoboken Condo Buyer
Bob Buyer sees an ad for a property that looks interesting so he calls the listing agent. The listing agent doesn’t call back but instead has a team member (let’s call her Tracy) respond to buyer’s call. Bob Buyer sets up an appointment to view the property with Tracy and believes that Tracy is the seller’s agent since the listing is with Tracy’s firm. Tracy tells buyer that she is the buyer’s agent.
WRONG – the listing agreement for any property is between the seller and the brokerage firm. ALL agents from that firm are agents of the seller. If Tracy wants to represent the buyer and the seller (called dual disclosed agency) it must be DISCLOSED in writing to the buyer that she is a dual agent.
Bob Buyer feels he has no choice but to continue to pursue the purchase of the property with Tracy.
WRONG – A buyer always has the right to terminate a relationship with any agent unless the buyer has signed a written contract (called a Buyer’s Agency Agreement) with that agent. It is uncommon for buyers in Hoboken to sign Buyer’s Agency Agreements. The buyer should have simply sent an email to Tracy saying “thanks but I am no longer interested in using your services” and gone and found his own agent from a different agency.
According to the buyer, Tracy could not have been more problematic. She kept pushing the buyer to raise his offer and, whenever the buyer stood firm she told him he should look elsewhere.
WRONG – Agents when acting as dual agents are still bound by the Realtor Code of Ethics. Article 1 clearly states that Realtors must treat all parties honestly. Tracy cannot put the interests of the seller before those of the buyer.
After agreeing to terms and signing a contract she would not let the buyer see the unit again (she claimed the owners would not let her) even though she knew Bob desperately wanted to take measurements of the kitchen and bathrooms for his contractors to use.
After showing up late for the home inspection, Tracy told the inspector he had only 1 hour to inspect the property even though the home inspector needed two hours.
WRONG – the home inspection is a right given to the buyer in the sales contract. Refusal by the seller’s agent to allow an adequate time for the inspection can be considered breach of contract by the seller.
Tracy was always late for appointments, when the buyer had his lawyer conclude the negotiations because Tracy would not communicate the buyer’s interest to the seller, Tracy yelled at the buyer, and was generally rude.
The property in question was sold for over half a million dollars. Tracy’s brokerage firm earned commission on both the buy side and the sell side. In the end, Tracy’s share of that was at least $6,000, very likely more. Bob Buyer felt there was nothing he could do but grin and bear it.
WRONG – if you as the consumer find yourself in a situation like this there is recourse. Real estate is a highly regulated industry. The NJ Real Estate Commision has a Consumer Inquiry and Response Center. The consumer can contact them by phone, mail, fax, on-line or in person. You can submit an inquiry or file a formal complaint. All Realtors are bound by the Code of Ethics. An ethics complaint can be filed with the NJ Association of Realtors.
When the level of wrongdoing is high enough to potentially cause financial damage to the consumer, a civil action can be brought against the realtor and his or her firm. If you are involved in a real estate transaction you are probably represented by a lawyer. Ask your lawyer for advice!
Why does all this matter? First of all, consumers deserve better treatment than the above scenario. When agents act badly, unethically or illegally it tarnishes the reputation of not just that individual agent but the entire industry. Some of us sincerely wish to raise the bar. Calling out the bad guys helps everyone receive better treatment and raises the standards to which the rest of us are held.