By Mike Bodeen · 14 August 2017
Can an agent cherry pick what information he wants to disclose to his client? A case in point: I write up an offer for John and Sally. During our negotiations with the seller, another buyer slips in the back door with a better offer and the seller accepts theirs instead! That’s a bummer for my clients, but perfectly legal. Until a contract has been agreed to in writing by all parties, it’s not binding. Once signed by all, no one else can purchase the property unless the that deal falls through for other reasons.
Since that listing was no longer an option, I proceed to find my them another home they like. We begin written negotiations back and forth with the new seller. I’ve gotten “verbal” approval from the sellers’ agent that they plan to accept the counter offer my clients are about to sign. Awesome, right? Well usually, yes, but in this case, I happen to notice that the previous listing my clients had lost to other buyers, is now back on the market!
Should I inform my clients even though delivering this final counter on this new property will seal the deal on the new property? Absolutely!
A mandatory form known as the “Agency Disclosure” that we give to all our clients outlines our responsibility to them. That relationship is referred to as “agency.” To put it simply this means we not only have a moral duty, but also a legal obligation to put our clients best interests above our own. That means we don’t have the luxury of deciding what our clients should and shouldn’t know or to keep anything from them.
And with our John and Sally example, here’s where “agency” really comes into play. The best way I know how to help my buyer clients is to provide them ALL the information I’m aware of so that they can make an Informed decision. When I’m discussing “agency” with my clients I tell them that what I know, they will know. I don’t have the right to withhold any material information which could affect the amount my client would pay for a home or even the buyer’s decision to purchase at all.
For example, if I have information that a seller will take less than the listed price, I’m obligated to tell my clients. I’m also obligated to explain that in my decades of experience, I have seen deals fall apart because a buyer wants to snag every last coin from the seller. The extra time it takes to squeeze the seller can give another party the time to swoop in and steal the deal! I give my clients the facts, coupled with my experience and say, “Your choice. You’re the one buying the home!” Now if I were representing the seller, it would have been the opposite. I would have been obligated NOT to tell the buyers they would take less.
The moral of the story is to know who the agent your dealing with represents. If you stumble into an open house and end up buying it directly from the agent who met you at the door, chances are that agent is working for the seller only, not you! The same applies to walking onto a new construction lot.
All agents are supposed to be dealing truthfully and honestly to all parties, but having an agent that represents you exclusively in a deal is the best assurance of getting the best information possible.
– Mike