Agents Talk Business
Water cooler talk around a real estate office is much like any other business office, I’m sure. Many agents are friends away from the office, so you hear family stories, what happened over the weekend, vacation tales, lunch plans, and business.
When agents talk business, it’s usually lender or title related, a new office policy or the real estate market. Some of us talk about blogging, websites and internet prospects. We may promote a new listing or talk about the one we have a new contract on. The home that didn’t close and is now back on the market.
You said what?
Occasionally, though, I hear someone say something and wonder, “What were they thinking?” Such as:
- My seller paid X amount of dollars toward the buyer’s closing cost to make the transaction work; now the buyer is walking.
- My buyers have 20% down payment, they just can’t find the right house.
- I sold this home two years ago and now the sellers are getting divorced.
- My clients are being transferred and really need a quick sale.
- At least the husband’s company is paying all their closing costs.
- The home’s overpriced; we just hope someone will make an offer.
- My seller has some room in their price for negotiation.
It’s Top Secret
With each of these simple statements, that agent has potentially violated their agency and fiduciary duties to their client. You never know when the agent you are talking to will represent the buyer for your seller’s home. Conversely, you may be representing the buyer for the other agents listing. Or….you don’t know who else may be listening.
Even if the home is already under contract, we know they don’t all close. Sharing the least bit of information, to our client’s detriment, can have negative consequences for our clients. It’s why we lock our pending files.
We need to be aware of what we say when speaking about our listings and our clients. Our clients’ information, both private and transactional, should be kept “secret”.
Have you ever heard anything you knew you could use in negotiations, if given the opportunity?
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I am often amazed at the lack of fiduciary duty that agents have with their clients. My favorite is when a Buyer Agent calls and says, “My buyers need to get into something QUICK.” … Hmmmm … thanks for THAT, because your “need it quick” now comes with a nice price tag.
Hey Paula! Welcome to AG
This happens all the time. Not so much in my office as out in the field. Last time it happened an agent told me 10 seconds after we met that his seller was too ambitious in his pricing and would take 20K less. The term “motivated” gets thrown around all the time, but this guy told me flat out how many tens of thousands less his client would take…. and he did not know me from Adam. (not that this should matter)
Some agents might just want to lay off the caffeine as well as other stimulants
I often wonder why people don’t realize that so much of what they say is and should be treated as confidential! I sure don’t want my attorney or doctor talking about me like that.
This reminds me of the ’secret agent code’ used in home descriptions described in the book Freakonomics.
Terms hinting at fixed, higher sales price:
Granite, State of the Art, Corian, Maple, Gourmet
Words hinting at lower sales price (encouraging lower bids):
Fantastic, Spacious, Charming, Great Neighborhood, !!!, Well Maintained
Paula – great reminder – in this market when it can take 3 agents before a home sells (you know they saying you want to be the first love, second wife and third realtor
– you NEVER do know how that info can get used.
The first house I ever sold was an open house my clients walked into.
The listing agent told them, apparently unprovoked, that they could get this $240K house for $220K no problem, and then the cleaning lady at the house told my clients they can probably get it for less.
This was the first open house, in a pretty good seller’s market.
We bought the house, easily, at $210K.
The seller was the only surprised person when the first offer came in 40K under asking price, first week on market.
I’m a real estate investor and buy/list/sell my own houses. I will typically title the properties in a trust or corportate entity, so that my name doesn’t appear on the title. I feel that helps me in negotiations when I’m not the seller.
In an attempt to learn the motivations of the sellers, selling agents often ask me:
How long has the house been on the market?
How much does the seller have invested in the house?
Why are they selling?
Do you know what the seller will accept?
I understand that they are trying to get at the seller’s motivations to negotiate the best price for their client, but what amazes me is when I reply with, “I’m not at liberty to discuss that with you”, the selling agent takes offense. I guess I should revise my reply to remind them about my fiduciary responsibility to my client, maybe they would accept that.
On the flip side, when I’m interested in buying a property, I will ask the probing questions and I’m always surprised with how much of the seller’s information they readily reveal. The good one’s will reply with I’m not able to discuss that with you, and I always reply, “it never hurts to ask”
In my pre agent/investor days, I purchased/sold several personal houses using the services of an agent, and I always had the feeling that both the listing/selling agents would have an “inner” negotiation going on trying to figure out what they could get the seller and buyer to accept. I felt they were more concerned with getting their commission than representing their client. So I quickly learned to “keep my cards close to my chest” and only share information with my agent that I didn’t mind they shared with the other agent, because my instincts told me they were representing themselves as well as me in the transaction.
Sadly, I’ve seen this over and over again in my buying/selling of investment properties.
Seems to happen a great deal of the time in our market. I think most persons are oblivious that they may potentially be weakening their clients negotiating position. You don’t even have to go digging that hard to get them to cough up some good info – a lot of times they just volunteer it.
It never ceases to amaze me. I called an agent on a listing that was a pre-foreclosure. My clients had found it online and I was trying to set up an appointment. The agent told me that the house was not in the best condition and that she had a perfectly darling house just a couple of blocks away for just about the same price. I could not believe it. Imagine the poor family trying to sell and save their credit from a foreclosure and the agent is trying to take people away from that listing.
Here’s a question: NAR says it’s unethical for us to talk badly about our competition and we can’t talk to the “clients” of a fellow Realtor’s listing. In this case wouldn’t the most ethical thing be to call the Sellers and tell them their agent was steering potential buyers away from the listing? (p.s. I didn’t do it)
Dan –
Standard of Practice 15 states:
If it’s true, it’s not necessarily a violation IMHO; call the broker. File a complaint. I’d love to, if I were in your position, be able to go “behind the sign” and tell the sellers, but I’d stick with telling their broker – assuming they care.
Since I have no friends, this isn’t really much of an issue for me.
Here’s the catch to the whole thing … as Arizona law reads, those other agents also have a fiduciary responsibility to your client in as much as the client’s represented by the broker, not the individual agent. So if one of these agents takes this information and uses it for the benefit of their buyer at the expense of the seller, they also have violated the broker’s fiduciary responsibility.
These conversations can be rather dangerous on several levels.
Mariana – Any time you need something quick – it costs more. Sometimes agents just don’t think!
Brad – Thanks for the welcome! It does happen more often in the field here, still, much of it should never be said, unless your seller specifically says, tell them I’ll take any offer.
Susan – Exactly!
Carson – Truth is, it’s not secret code! Well, I don’t know of one anyway:) It does sound like it though!
Cyndee – By the time it gets to the third listing agent, the home is priced right and sold for less than if an agent did have some inside info.
Benjamin – To think, we tell sellers not to be present at showings. In this case they should have held their own open house. I bet the seller was surprised and the agent probably didn’t try to negotiate harder on their behalf.
Wade – Your’s is an excellent response and one which should be practiced by every agent. It’s really unfortunate, in your experience, you felt the two agents had their own deal going. I have had agents try to settle some inspection issues “on the side” and I refused. My client is getting what they deserve, in writing and at closing.
Jennifer – Yep, I’ve seen it time and again.
Dan – She could have easily suggested you see both, without potraying her clients home in a negative light. I probably wouldn’t call the broker or go to the clients, but, Oh how I would want to tell those clients.
Jim – Thanks for your input.
Jonathan – You have no friends
It really doesn’t have to be a friend. Just the fact someone else may hear the conversation is enough to make an agent be quiet.
You make an excellent point – the broker is ultimately responsible.
What about offers/counter offers/client communication being FAXED into an office fax machine???? I can’t tell you how many times I have been working late at night and seen a competitor’s offer or counter-offer come in over the fax machine for anyone and everyone to see!!!! As a listing agent, I am surprised and disappointed at how many agents are still not willing to learn how to email a contract. As a buyer’s agent, I’m amazed at the number of agents who still do not use email!!!!
Tina – Excellent point! Like you, I prefer email – it is safer and retains the integrity of the print. When agents don’t know how or don’t have the means to email – I have MyFax – it goes straight to my computer.
This is one of my favorite topics. I have been told – as I’m sure everyone has – the most amazing things about someone else’s clients. I totally agree that it doesn’t hurt to ask; and I do. I have to laugh when the agent says the sellers have already bought another house or that the husband has left to the new city for the new job and left his wife and kids at the old house. What are they thinking? The first thing I do is call my clients. I’ve had agents tell me: My client is crying; she wants the house so badly. Hey stoop! What are you thinking?
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I am going to throw in there that office meetings where agents are asked to “tell us about your listings” the same thing happens. I’ve been in many offices as agent and guest speaker and heard the same thing: “My clients really need to sell, their divorce is getting ugly” etc…
To Dan’s point, we need to remember that “ethics” are not the same as morality. “Ethics” are more a “Standard of Practice.” I agree that you should consider an Ethics complaint at your Association, but there are ways around the agent not being able to contact the opposing clients…. Maybe your clients may have a concern that might just sorta compel them to call the poorly represented sellers…. just saying…
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Dan –
Standard of Practice 15 states:
REALTORS®shall not knowingly or recklessly make false or misleading statements about competitors, their businesses, or their business practices. (Amended 1/92)
• Standard of Practice 15-1
REALTORS®shall not knowingly or recklessly ?le false or unfounded ethics complaints. (Adopted 1/00)
• Standard of Practice 15-2
The obligation to refrain from making false or misleading statements about competitors’ businesses and competitors’ business practices includes the duty to not knowingly or recklessly repeat, retransmit, or republish false or misleading statements made by others. This duty applies whether false or misleading statements are repeated in person, in writing, by technological means (e.g., the Internet), or by any other means.
If it’s true, it’s not necessarily a violation IMHO; call the broker. File a complaint. I’d love to, if I were in your position, be able to go “behind the sign” and tell the sellers, but I’d stick with telling their broker – assuming they care.
Good Point!!
Paula,
Loved your comments about “water cooler talk”, and how true it is. Most agents mean well when they are speaking to other agent “friends” but do forget that they have a responsibility at ALL TIMES to their client. Depending on the situation, I just listen and don’t speak. As an agent, it can help if I have a client looking for a good deal and their are agents (not just in my office only) that tend to have loose lips. It is a different situation thought if that client allows the agent to disclose to other agents their situation, and I have personally had that happen to me. Then it is okay to tell of their situation, no matter how desperate the client.
Just thought I’d throw that in………….Thanks!
Vicki – I have to say – I have never been in a situation where I actually used information learned from my office, but I have received some great info from the other agent in negotiations on a home. In all situations, they should negotiate from a position of strength, not desperation.
Matthew – I remember those office meetings well, that’s where some of these statements came from. It never ceases to amaze me what some agents will give up about their client.
Patricia – I agree – agents do not mean harm – my guess is they just don’t think. Chances are slim, the person they are talking to is going to bring the buyer or list the right home, however, it could happen. It’s unfortunate many can relate to this. Most of the comments I hear come during negotiations or inquiries about a home.
I would be cautious to reveal anything about my clients, other than ” my client’s said to make an offer”, unless I had their agreement in writing.