One debate I often hear is whether a real estate agent should represent both sides of a transaction. The question lies on whom you represent. I have been in real estate for 13 years and have done transactions where I represented both sides. I have guidelines that I personally use when deciding whether or not I would feel comfortable in doing so. Here are the things I consider:
1) Is it a win-win situation for both parties? In other words, is the seller getting what they wanted or maybe a little bit more? Is the buyer happy with the price and it is reasonable?
2) Did the listing stay on the market long enough to give the sellers an indication of demand, or lack of?
3) Are there good comps that support the price that the buyer is paying? If not, and I am selling for a record price in the building, I would not touch dual agency with a 10-foot pole! This is where it gets very tricky. If I am a listing agent, and I am selling for a record price, and there are no comps that justify my pricing…I just hit a grand slam for my selling clients! If the buyer’s agent allowed their client to pay that amount, well let’s just say I don’t want to be THAT agent! Especially as a dual agent! NEVER! Now I will say there have been times where I represented clients that had so much money they just did not care about the price, they just wanted the condo. In that situation, you make sure that you document that conversation.
Regarding #3, this is where representation comes into play. As a dual agent whom do you represent? You should be representing buyer and seller equally. But how is this possible when you have a situation like above? If you are getting a record price for your sellers, and there are NO COMPS to support the price, how can you be the buyer’s agent and say “I did a good job for my clients”? The answer: You can’t!
If this same agent acted only as the buyer’s agent, you can bet that he would be hammering on the seller’s agent that the unit is at a record price and might be overpriced? Now, records are meant to be broken. So how much of a record price is it? Is it $10 to $30 a square foot more? That is reasonable. Is it $50 to $100 a sq. foot more? This is when you have real problems. For one, the property would most likely not appraise. But what if the buyer is paying cash and an appraisal is not required? Well then the buyer is really at risk. This is when they REALLY should have a separate agent. ( and for peace of mind, the cash buyer might still consider getting the property appraised).
In multiple-offer situations, if an agent is representing both sides, he or she better make sure that their buyer’s client is the best offer! If it is, the listing agent and the seller are making the final decision as to which offer to select. In this situation, there is no problems in representing both.
So bottom line: If both parties are happy and well educated on pricing, and there are good comps to support the purchase and sale, there are no problems.
On the flip side. If there is a big difference in price from the comps, especially if it is a record price in the building for the seller or huge discount for a buyer. This is when you need two agents fighting it out for their client’s best interest. I would never do dual agency in this situation!
Brad Golik is a luxury condo specialist with LuxuryCondosofPortland.com and Pearl District Properties in Portland, OR. You can reach him at one of his websites including http://www.LuxuryCondosofPortland.com and www.PortlandPenthouse.com or by calling him at 503-896-8856
Because I was short of time this week, I thought I would do a video post!
If you have not noticed…the market has slowed down!
What is the one thing I see happening everyday? Price reductions. Yes we are seeing a huge number of listed properties being adjusted. Usually, we see a slow down this time of year as we go into the holidays. What is a little more unusual is to see the amount of slowdown that we have seen in the number of showings the last several weeks. What is to blame for this? It could be all of the attention that was being put on the presidential election. With this were the fears of what would happen to the markets if either candidate won. The good news in this area was the stock market. On election night when it looked as though Trump would be the winner, stock market futures were down in a big way, over 800 points. But, in the morning after the dust had settled, the market was very strong and it has remained that way. What does this have to do with the housing market? Well, when the stock market is strong, peoples confidence increases and the comfort level of making a big purchase becomes improved. The new thing we need to look at now are interest rates…they are up. Will this force people to get off the fence and make a move?
With that said… let’s talk real estate! As mentioned, there have been a number of price reductions In the market. Two of these are a couple of very nice units in the mid $600,000 range. One is a loft in the heart of the Pearl. The other is a condo along the waterfront.
The loft, priced at $629,900, is unit #306 at McKenzie Lofts. With a beautifully updated kitchen, this 1 bedroom plus den unit is open and spacious. Walk to restaurants or walk outside your door for your morning cup of coffee at Starbucks. You can’t go wrong with this awesome loft in the Pearl! See Video: https://video214.com/play/11vHJkeJI8ypsdUHe0400g/s/dark
The condo, a 2 bedroom ground floor unit at Pacifica Tower, is a well appointed unit along the shores of the Willamette. Are you a pet owner? The massive patio is perfect for those who own a dog or two. Not a pet owner? Well you will love the outdoor “Extended Living Area” for lounging or enjoying BBQ’s where space is not a problem! See Video: https://video214.com/play/1HJOmmsY6EHdrbCx993hwA/s/dark
If you would like to view either of these units, give me a call today at 503-896-8856.
I don’t get political on my blog… because you will always offend half of readers. I will say this. The election is over. Let’s get back to work and come together. If you are a person that is comfortable financially, next time you walk by a homeless person that is down on their luck, buy them a cup of coffee or a breakfast. Let’s get back to being kind to one another. Do something nice for someone today!
Brad Golik is a condominium specialist at Pearl District Properties. You can view his website at http://www.LuxuryCondosofPortland.com
Contact Brad at firstname.lastname@example.org