Can I represent a buyer who comes to my seller’s open house?

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Smiling man shakes hands with real estate agent while man's wife looks on.

09/18/2015 | Author: Editorial Staff

As a listing agent, I hold open houses. If a prospective buyer at an open house wants to purchase the property I listed, can I represent that buyer?

Yes, your broker—or you acting on your broker’s behalf—may represent the buyer if your broker has chosen to offer intermediary services. But you and your broker must take a few steps to ensure all parties understand the situation. 

You must provide the buyer with the Information About Brokerage Services (TREC OP-K, TAR 2501) form upon first substantive dialogue and disclose—orally or in writing—that the broker is representing the seller. 

If the buyer chooses to have your broker represent him or her, the buyer can enter into a representation agreement with the broker. Written consent, which states the source of compensation and broker’s obligations as intermediary under the Texas Real Estate License Act, is required from all parties before a broker can serve as an intermediary. The Residential Real Estate Listing Agreement, Exclusive Right to Sell (TAR 1101) and the Residential Buyer/Tenant Representation Agreement (TAR 1501) satisfy these requirements. 

Next, the broker should notify the buyer and seller of whether the broker will appoint licensed associates to provide advice and opinion to each of the parties during negotiations by providing the Intermediary Relationship Notice (TAR 1409) and having the buyer and seller sign it. The broker would then appoint a sponsored license holder to the buyer and a different sponsored licensed holder to the seller. You, as a sponsored license holder of the broker, could be one of the agents appointed. If the broker is not going to make appointments, you, as a sponsored license holder of the broker, could act on behalf of the broker as intermediary, but you would not be permitted to provide advice or opinion to either of the parties. 

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Categories: Forms, Legal
Tags: intermediary, legal, legal faq, forms, representation, brokers


Comments

James DeBerry on 10/01/2015

Representing two parties, with opposite interests in a transaction is absurd. Back before “Intermediary” we had an even nastier term called “Dual-Agency”, which led us to many great topics on the subject, including “Accidental Dual Agency”, whereby an agent could stumble into an agency relationship because of a misunderstanding. This very topic is what led to the “Agency Disclosure”. One thing has not changed in the last 26+ years I’ve been in this business - agency confusion. I’m reminded of a cartoon I saw circa 1992 with a licensee standing on a tightrope with a pole holding buyer and seller on opposite ends. On his back was a sign that read “Dual Agent”. On the ground below each was an attorney waiting to catch the falling future litigants. That summed up dual agency, and would aptly apply to its replacement, “Intermediary without appointments”. However; the advent of Intermediary Relationship had to come about to alleviate misunderstandings, but it has failed to do so for the fact that “agency” is at best, difficult to understand – unless you’re a lawyer.
First of all, those of you who have used the word, term or expression “sub-agent” to refer to anyone whose license is hanging on the wall in your office, need to go back to agency school. A sub-agent is another broker or a licensee under another “Other Broker” in another office, who does not represent the buyer he/she is working with, but represents the seller (Sub-agency) of another broker’s listing. Plainly, a sub-agent is NOT an agent in the listing office – EVER! It’s no wonder the public cannot grasp the concept of agency when so many licensed Brokers and Agents don’t get it either.
To understand it all, we need to go back to the root, and inherent problems of the “old” way of doing it.
Old term - Dual Agent – Now called Intermediary without appointments – a Licensee who, with full disclosure, represents the interests of both parties to a transaction. This agent could have been paid by the seller, the buyer or both, as the source of compensation did not determine the fiduciary relationship. Good luck with this!
New term - Intermediary – An “Intermediary” NEVER gives advice or opinions. This is why the appointee system works to alleviate the pitfalls of becoming a dual agent. But, properly disclosed, a single broker office selling his/her own listing to a buyer they agreed to represent, is an “Intermediary” and gives NO advice or opinions to either party. The parties agree that the services of the broker in this transaction are severely mitigated to that of a transaction facilitator. It can work, you can get paid both sides of a commission, and nobody gets represented effectively. The idea behind the “Intermediary” was to have the broker NOT engage in negotiation, but to act as an unbiased center point to a transaction whereby two licensees in the same office can effectively render both parties to a transaction the same and equal full representation each party would receive having representation from separate offices/agents. That is to say for example: Sitting in the breakroom at the office, the listing agent overhears the buyer’s agent talking on the phone to his/her buyer saying “you’ll pay full price? Of, course that’s between us…” In this case, the listing agent has to act as if they didn’t hear that. They cannot disclose that information to the party they represent. It was illegally obtained evidence, so to speak. The reason it cannot be relayed to the seller is because it would cause the buyer to have more assured confidentiality being represented from another brokerage firm than they would using an in-house agent appointed by the intermediary. This is also why a single agent brokerage firm, using “Intermediary”, cannot give advice or opinions. They cannot effectively represent one party without automatically putting the other party at a disadvantage. This creates an enormous liability for themselves. In this case, they’re best off to just “shut up”, provide relative information, and facilitate the transaction, making sure they don’t insert their opinion about anything to either party. As with the former “dual agency”, Good Luck!
As to the comment, “unrepresented buyers don’t care about representation”, it is your duty to inform them via the IABS of their options as a consumer of real estate. To say they don’t care about it, is to bury your head in the sand to the reason the IABS is not optional. TREC created it for a reason – not because buyers don’t care about agency or representation, but because many, especially first time, buyers don’t know they have the option of representation. If you don’t make it perfectly clear to them, TREC will make it perfectly clear to you why you should have made it clear to them. And you won’t like TRECs method of explaining this to you.

David Davis on 09/29/2015

Mike
Actually it does. Look just above the sentence you are talking about

Mike McEwen on 09/29/2015

The IABS does not say fairly and honestly but it does say honestly, which is fairly synonymous w/ fairly.  It’s in the right column on the IABS.

Robert Blue on 09/29/2015

OK
Thanks

David Davis on 09/29/2015

Further it says: “The broker is required to treat each party honestly and fairly and to comply with The Texas Real Estate License Act.”  Which, by the way is a TRUE statement!  So not only does the IABS say it, the act that licenses us as real estate licensees REQUIRES IT!

David Davis on 09/29/2015

Robert Blue, Which IABS are you using.  The one I use says it! Look under IF THE BROKER ACTS AS AN INTERMEDIARY:
“(1) shall treat all parties honestly;”
As for the fairly, this is required of all REALTORS® in dealing with all persons or parties.

Robert Blue on 09/29/2015

I noticed that several people have commented that the IABS states that, as agents, we must treat the parties fairly and honestly. It does not say that.

Mike McEwen on 09/29/2015

David Davis continues to show an excellent command of the meaning of agency and representation.

Mune Manivong on 09/28/2015

I have been doing representing both buyers and sellers for decade . My question to your guy , how about the seller and the buyer has already agreed with the sale price , they asking me write up the contract ? Even my listing , seller has asking if I can reduce my commission he has his freind or relative wanted to buy it ,  I did , both parties happy .  My broker now , seem like has questions doesn’t want me to do it . I put on the special provision they both have initial . I did that a lots . Reason doing that to help them out , I get a small portion is okay . Am I broke the law ?

David Davis on 09/25/2015

Samuel Garcia makes a very good point.  It is NOT necessary to represent both sides (even though it would be impossible to do so, as previously discussed, but that was after all the subject of this thread) in order to earn “both sides of the commission.”  If a buyer walks into an open house and wants to purchase the open house, draw up the contract, get it signed and present it.  Listing agent gets the entire sales commission as described in the listing agreement (subject to brokerage in house agreement).  So long as you are not discussing anything other than the open house, you don’t even have to give that buyer a copy of the IABS.  I asked earlier if anyone knew the two times that you do not have to give the IABS to a consumer:
1. When holding an open house (provided you do not discuss any property other than the open house); and
2. When you know that the consumer is represented by another licensee (soon to be called a license holder).
It is not required that you represent a buyer to get paid to help the buyer make a purchase.  All you do is treat them as a customer (with the three duties previously described), show them the property, help them submit an offer, and hope that the seller accepts it.  No part of this in any way violates your duties as an Agent to the seller.

Samuel Garcia on 09/24/2015

I agree 100% with Ken Smith   Why would you want to represent both agents? The buyer showed up unrepresented.  Just treat the buyer honestly and fairly. You already represent the seller. The simple solution is to only represent the seller. Unrepresented buyers don’t care about representation, and the IABS says that in single agency situations you still must treat the unrepresented party honestly and fairly. Many agents think that in order to double dip, you must use intermediary. Not true. Many offices have this policy, but the law does not require it. And most buyers couldn’t care less

Mike McEwen on 09/24/2015

I do not see it happening either.  TAR would pitch a fit.  I love the TAR legal hotline and the forms but TAR would lobby to see that intermediary is never abolished.

David Davis on 09/24/2015

@ Mike, I don’t see that happening.  I could be wrong here, after all TREC is a consumer protection agency, but I suspect there would be too much opposition to abolishing it.  I can certainly see the point of “legal fiction”.  If not done properly it is a bomb waiting to go off.

Mike McEwen on 09/24/2015

I would tickle me pink to see TREC have the guts to abolish Intermediary.  Even a TAR attorney once told me it is a “legal fiction”.

Mike McEwen on 09/24/2015

Brilliant, Mr. Davis.  You and I should both become certified in the unlicensed practice of law.  Ha, ha!

David Davis on 09/24/2015

@ Mike, It is plain to see why INTERMEDIARY is the most common complaint that TREC deals with.  I recently had the chance to set and talk with Avis Wukasch, Chair of TREC, and she told me that the single most common problem they deal with on a complaint level is INTERMEDIARY followed closely by property management issues.

It is also the most widely misunderstood part of real estate brokerage.  I guess I now see why.  Even our State Board got this one wrong!

By the way, only the BROKER of Record can act as an INTERMEDIARY.  Not a licensee (soon to be called a license holder) who is not the Broker of Record for a brokerage.

Mike McEwen on 09/24/2015

Everybody needs to listen to Mr. Davis.

David Davis on 09/24/2015

@ Mike, Precisely.  Let us take a look at the word “represent”  means to “be entitled or appointed to act or speak for (someone), especially in an official capacity.”  In other words, to stand in place of, or act in place of another.  You cannot represent both the buyer and seller unless they happen to be one and the same person.  When you represent someone you stand or act in their place…. Hey, don’t believe me? Go look it up!

In the case of INTERMEDIARY in a real estate brokerage aspect, both parties become Customers.  There are no Clients!  A Client is someone to whom a fiduciary responsibility or duty is owed by a Representative, or Agent.  Customers get three things, Honesty, Fairness, & Disclosure.  Clients get nine things: Obedience, Loyalty, Disclosure, Confidentiality, Accountability, Reasonable care & diligence, Advice, Opinions, and Advocacy.  Not just on the days the Agent feels like it, but at all times!

Mike McEwen on 09/24/2015

Ms. Wilkinson does not know what the word represent means.

Mike McEwen on 09/24/2015

Another example of failing to understand what the word “represent” means:  “Both agents work for the Broker but represent the best interests of their respective clients.”  In this misspoken example there really are no clients.  If you have a client you are his fiduciary.  In intermediary both parties have been reduced to basically being customers.

David Davis on 09/24/2015

@ Mariangel Wilkinson According to your comment an Agent should not give Opinions or Advice?  When did they change the duties that an Agent owes to a Principal?  Please enlighten me!

Mariangel Wilkinson on 09/24/2015

To David.
Simple. You have no obligation to provide the BPO or CMA. If you feel you want to, you could ask the seller if they want to disclose it to the buyer or not. In any case, providing the buyer with neighborhood sales prices is not a conflict, but be sure you give the same information to the seller and let all parties about any such info. Another thing is you need to offer to show that buyer anything else that is available they might be interested in. If you are representing them you would do this right? Most people are not stupid and can make their own decision what they want to offer and on what. You should not be telling your client, “you need to do this or that” anyway. “Here are the facts, now you tell me what you want to do.”  It is the opinions and advise that will get you in trouble, not facts.
The minute the buyers want you to represent them, give them a IABS and go over it with them, Then give them an Intermediary Relationship and explain it. Explain there are some things that have to happen, one being, the seller has to agree also! Don’t try to hide things, just tell everyone what’s up and talk openly about it to all. pros and cons.

Mike on 09/24/2015

Brilliant, Mr. Davis.

David Davis on 09/24/2015

Suppose for just a moment that Mariangel Wilkinson is correct.  I hold an open house for a seller.  The house is listed at $200,000.  My CMA/BPO was for $180,000, but because the owner sets the price it gets listed at $200,000.  Simultaneous to the listing agreement the owner tells me, REALTOR® I’ll take the $180,000, but I want it to be listed at $200,000.  Now the open house occurs.  As I said previously, this is one of the two times that you do not have to give the IABS to a consumer (at an open house, provided you discuss nothing other than the house being held open).  Now this wonder person walks up and wants to buy the house.  I explain to the buyer that I represent the seller.  The buyer wants me to “represent” them.  If I can represent the buyer at the same time as representing the seller, what do I do with that information about the CMA/BPO and seller telling me that they would take $180,000, instead of the $200,000 list price?  Remember that because I represent both, I must provide both with Obedience, Loyalty, Disclosure, Confidentiality, Accountability, Reasonable care & diligence, Advice, Opinions, and Advocacy.  How do I provide both Loyalty, and Confidentiality to one of the opposing parties without violating the trust (the same duties to) of the other?

Mariangel Wilkinson on 09/24/2015

Wow! It is obvious how long most of you have NOT been in the real estate business. YES you CAN represent both parties in a real estate transaction. (There is, however, a lot of advising you can’t do) But do not attempt to do it if you are not totally honest, above board and have a LOT of experience dealing with buyers and sellers.  You must take the part about treating all parties honestly very seriously. When in doubt, disclose and let everyone know you are disclosing whatever it is to everyone concerned. I have done many deal representing both parties, and all concerned have been grateful for my services and extremely happy with the outcome.

When I first became an agent, this was the gold standard (c.1970). We all worked with a lot of deals that we represented both parties. Working with both the buyer and seller is totally possible and in some cases can actually work excellent for both buyer and seller. But the first rule of doing this is that you cannot tell tales or give your opinion of what the other party will or will not do and you cannot advise either party what they should accept, offer, etc. Unless your seller says, “you can tell the buyer that I will take ______ for the house”, you cannot tell the buyer what you think or know the seller will accept for the price.  You cannot say to the seller, “I think the buyer will offer a little more.” Proper answer if they ask those questions, “do you remember what I told you about me not telling you things? I cannot answer that question.”  You can say, “Here are the comps in the area, I am giving a copy of this to both parties and I will never tell either of you something I am not sharing with the other party.”  I have a standard statement I use at the beginning that notifies everyone involved that I cannot and will not advise anyone on anything to do with the price and terms or negotiation unless told to do so by the other party, other than keep them above board and legal. But that I will give each all the same information regarding market, etc. so they can make an informed decision. I have even sat down with the seller and buyer, with both present, in some cases when it came to working out price and terms. I can “REPRESENT” and advise either/both parties in completing forms, obtaining financing, working with the title company, inspectors, etc.  When I take an offer to the seller, I am representing the buyer in making that offer, when I take a counter offer back to the buyer, I am representing the seller with that counter. “Here is their offer and this is what that looks like in what you will need and/or net.” Then zip it! Anyone can try to negotiate a price, but most non agent people have no clue about taking care of the deal once the price and terms are agreed.

I can care for and about each party without harming the other and if they really need to talk about the price back and forth, don’t be afraid to sit them down together. If you think that is a problem, then bring another agent into the deal if you need to. If you have ANY concerns, bring in another agent.

David Davis on 09/24/2015

The word “Client” again implies representation.  In an Intermediary situation there is no representation!  Read the IABS!  It says “Act As An Intermediary”.  It says nothing about “representing as an Intermediary”.  The two paragraphs that talk about “representation” say “IF THE BROKER REPRESENTS THE OWNER” and “IF THE BROKER REPRESENTS THE BUYER”.  When it comes to Intermediary it says: “IF THE BROKER ACTS AS AN INTERMEDIARY”  If you cannot read this very simple one page document that must be given to the consumer at the very first substantive dialog (with only two exceptions, can you name them?  I’ll give you a clue, one of them is brought up in the original post of this thread), then perhaps you may have chosen the wrong career path!

Mike McEwen on 09/24/2015

Thank you, Mr. Norfolk. You understand.

Mike McEwen on 09/24/2015

The person who said this:  “Obviously,  there’s a lot of confusion and difference of opinion out there.  I’ve done intermediary, and I felt that I did a fair job of representing
both sides—and I do mean representing.” does not know the meaning of the word represent, which should be considered synonymous w/ “acting as a fiduciary.”

Tony Romero on 09/24/2015

The Broker is the intermediary - not the agent.  If you consider the word intermediary to be nothing more than a “facilitator” it is a lot easier to understand. 

The Broker “facilitates” the process of obtaining appropriate representation of both the Buyer and the Seller making him the Intermediary or go-between.  Both agents work for the Broker but represent the best interests of their respective clients.

It really isn’t complicated, at all!

Mike McEwen on 09/24/2015

Kudos to Mr. Davis and the individual who said you cannot serve two masters.  I am seeing some very intellectually honest responses to this issue.

Mike McEwen on 09/24/2015

Attorneys may not represent opposing parties, nor can they go after people for whom they have had a prior fiduciary relationship.  I see here a complete failure to understand the shortfalls of intermediary.  If it is proper to use intermediary then the listing agreements should all be modified to eliminate any mention of a fiduciary responsibility of any kind.  Intermediary is simply a means for keeping the commission under one roof.

Ken Smith on 09/24/2015

Yes, but why would you want to? The buyer showed up unrepresented. You already represent the seller. The simple solution is to sell the property and only represent the seller. Unrepresented buyers don’t care about representation, and the IABS says that in single agency situations you still must treat the unrepresented party honestly and fairly. Many agents think that in order to double dip, you must use intermediary. Not true. Many offices have this policy, but the law does not require it. And most buyers couldn’t care less.

David Davis on 09/24/2015

You people need to pay attention, and keep your eye on the ball here.  No one may “represent” opposing sides in any transaction. 

Intermediary is not representing anyone.  It is acting as an Intermediary (with the consent of all parties, and only if the Broker of record has appointed different individuals to assist both the buyer and the seller in the same transaction).  Have you people not bothered to read or understand the “Information About Brokerage Services” that is required (by law) to be given to any consumer at the time of the very first substantive dialog.  It says:
“IF THE BROKER ACTS AS AN INTERMEDIARY:
A broker may act as an intermediary between the parties if the broker complies with The Texas Real Estate License Act. The broker must obtain the written consent of each party to the transaction to act as an intermediary. The written consent must state who will pay the broker and, in conspicuous bold or underlined print, set forth the broker’s obligations as an intermediary. The broker is required to treat each party honestly and fairly and to comply with The Texas Real Estate License Act. A broker who acts as an intermediary in a transaction:
(1) shall treat all parties honestly;
(2) may not disclose that the owner will accept a price less than the asking price unless authorized in
writing to do so by the owner;
(3) may not disclose that the buyer will pay a price greater than the price submitted in a written offer
unless authorized in writing to do so by the buyer; and
(4) may not disclose any confidential information or any information that a party specifically instructs the broker in writing not to disclose unless authorized in writing to disclose the information or required to do so by The Texas Real Estate License Act or a court order or if the information materially relates to the condition of the property.
With the parties’ consent, a broker acting as an intermediary between the parties may appoint a
person who is licensed under The Texas Real Estate License Act and associated with the broker to
communicate with and carry out instructions of one party and another person who is licensed under that Act and associated with the broker to communicate with and carry out instructions of the other party.”
Nowhere in this paragraph do you see the word “represent.”  Are you bothering to explain this document to the consumer when you give it to them?

“Representing” someone means that as the representative, you owe the Principal some degree of duty or duties.  In the case of a REALTOR® those duties are Obedience, Loyalty, Disclosure, Confidentiality, Accountability, Reasonable care & diligence, Advice, Opinions, and Advocacy.

It would be impossible to provide these nine duties to the Principals on opposing sides of the same transaction without violating at least the Loyalty and Confidentiality portions of those duties.

The reason TREC doesn’t offer more training on this subject should be obvious.  TREC (while they are the licensing authority for us) primarily serves as a consumer protection agency of the Texas Government.  It would inconsistent with protecting a consumer to teach or train some licensee (soon to be license holder) to breach the very essence of “fiduciary” or “representing” a Principal which is also a consumer.

As for those of you who say that your lawyer or attorney said….. That is fine. Ask that attorney if (s)he is going to represent you when the issue comes up before TREC, TAR, or even a Judicial tribunal.  If they say they are, then fine.  Roll the dice, and take your chances (at your own peril), by the way, an attorney that says that you can represent opposing sides in the same issue, may not be the one you want to represent you when you are ordered to appear before TREC, TAR, or the Court(s).  How do you know that (s)he is not representing TREC, TAR, or the Opposing side in a Court case?  Can (s)he really be representing your best interest?

Bill Norfolk Jr on 09/24/2015

I actually agree with Mike’s viewpoint.  I personally have been in a few positions to have represented both sides and made more money, but have declined.  I work hard to gain the trust and confidence of the seller and I want to be able to spend 100% of my efforts to help him or her through the whole process.  I believe I will actually get more referral business and will do a better job in one position of representation.

Tom Allen on 09/24/2015

Obviously,  there’s a lot of confusion and difference of opinion out there.  I’ve done intermediary, and I felt that I did a fair job of representing both sides—and I do mean representing.  You have to “wear both hats” and remember to whom you’re speaking at the moment.  When I’m speaking to the buyer, I have to be careful to put the seller’s best interest out of my mind and just state the facts.  If I’m speaking to the seller, then the role is reversed.  Some agents may be uncomfortable doing that and, if so, should not take on intermediary cases.  I don’t feel uncomfortable, and I’m careful to document everything in writing—mostly emails—so I have backup for what I’ve said to both parties.  It would be useful if TAR or TREC would provide some specific guidelines on this rather than leaving it to agents’ imagination.  Training on this is very vague and confusing.

Morris "Bill" Austin on 09/24/2015

Hello All,
If the agent holding the open house is the listing agent they can not “represent” the buyer period! If the agent is not the listing agent I believe this is the definition of a sub agent who represents the “seller” until they have discussed the IABS and then have Representation agreement signed from a prospective buyer.  The listing agent has an obligation to keep his clients private pretanent information private.
Can a deal be done with one agent, yes. It’s just not called “representing” both sides. Intermediary is a completely different situation than the one posed in the article as I recall.

Bill Price on 09/24/2015

My belief is no one can serve two masters - fairly.

Bob Dillon on 09/24/2015

Like sheryl galvan i’ve had no problems intermediating several deals per year for the last 11 years.  It results in repeat clients from both sides time after time.  I disagree with the majority of Mike McEwen positions and my attorney disagrees with Mike’s statement regarding attorney representation… Just my 2 pennies worth, don’t get

Tony Romero on 09/24/2015

It is my opinion when holding an Open House, the agent holding the open house is a proxy for the listing agent; hence, if a Buyer asks if he can represent them, the answer would be to explain Information About Brokerage Services; tell them you can assist them in preparing an offer, but that as a associate of the listing agent, the Seller believes you are representing and assisting them in the marketing of their home.  REMEMBER: The listing agent often share information about the Seller, e.g. motivation, reason for selling, what they will take, etc.. 

If the Seller became aware that agent shared that information with a prospective Buyer, the Broker would have legal exposure and possible liability in subsequent legal proceedings. 

I recommend agents sitting on-site understand they represent the Seller.  In so doing, it removes any misinterpretation from the client - whose interests we must represent honestly and keep above all others

Mike McEwen on 09/19/2015

Sending the prospect to another agent in the office does not mean the prospect will get better treatment.  The only way the prospect can get true representation is by going to another brokerage.  Read the IABS.  When explaining intermediary it never says “represent”; it says “work with”.

Doris Fuller on 09/19/2015

Reading the article and the comments has certainly clarified to me that this is a clear as mud statement on the IABS.  As a newer agent of about 8 months, I find myself keeping that conversation about the IABS down a short explanation simply because the chaos in the mind it creates for anyone reading it.  I believe pointing the buyer to another agent within my agency would be the best and most appropriate plan to insure they are taken care of as they deserve.  Thank you all for your comments—it helped me land on the right side of the fence on this very confusing topic.

Mike McEwen on 09/18/2015

Any person who uses the phrase “represent both sides” does not know the meaning of the word.  A representative is a fiduciary.  It is neither morally nor legally possible to represent both sides.  Again, attorneys are not allowed to represent both sides.  If, for example, an attorney is working w/ a couple in a divorce, one spouse or the other has to sign a document stating that he/she knows the attorney is representing only one of the spouses.

Sheryl Galvan on 09/18/2015

Have never had problems representing both sides fairly myself, but before I had my license, I bought a listing of my Realtor’s and the HUD-1 showed a $450 unknown HOA charge 2 hrs before Closing.  When I questioned it, **my** Realtor said, I told you the Seller didn’t have any money.”  Turns out it was back, unpaid HOA dues.  I think because I got screwed as a Consumer of an intermediary deal, I am hyper aware of being 100% fair with full disclosure all the way through by both parties.

Mike McEwen on 09/18/2015

The listing agent may be assigned to both parties but he may only act as a go between.  No opinions or advice may be given under this scenario.

Mike McEwen on 09/18/2015

There are two kinds of Intermediary.  Any agent in the office, including the broker, may work w/ both buyer and seller but no opinions or advice may be given; all the licensee can do is convey messages from one party to the other.  The second kind of intermediary is where the broker may assign one agent to the buyer and one agent to the seller.  Under this kind of intermediary a broker may not assign himself to work w/ either the buyer or the seller.  Under either scenario intermediary is a bad practice.

David Davis on 09/18/2015

TAR You blew it on this one. NO the listing agent cannot serve as the buyer’s agent in the same transaction.

Kristen Parker on 09/18/2015

This is the most asinine understanding of our intermediary laws. I don’t care what y’all say, but I really don’t think these laws intended for an agent to represent both sides of the transaction without advice. That is the BROKER’S job, according to the Texas Real Estate Licensing Act; the agents can only work intermediary IF the broker decides to make appointments.

Mike McEwen on 09/18/2015

Intermediary is not a tool that can be used properly.  I do not permit it in my brokerage for many of the subtle reasons you alluded to.  Having another agent deal w/ a buyer and another w/ the seller does not resolve things.  (“Legal Fiction”). both of those agents are subagents of the seller…....at least at the beginning.  If Intermediary is doable then let’s start letting attorneys do it.  If a buyer comes to my office to acquire one of my company’s listings I let him know that, if he really wants an agent to go to bat for him, as much as I do not want to share half the commission, he will have to go to another brokerage.  In my 26 years I have had a buyer go to another brokerage on about three occasions.  The ones who continued w/ me, even though I could not represent them, saw my comments as an honest breath of fresh air.  The buyer also understands that I have to be fair and honest and that I will not conceal pertinent details about the property, such as defects, use restrictions, etc.

Mark McNitt on 09/18/2015

It a word, NO.  If you already represent the Seller, you cannot “represent” the Buyer.  You can help, assist, etc…but represent, no.  Our listing agreements allow, with the Sellers permission in advance, the opportunity of an intermediary relationship.  The rules must be followed closely by the two agents under the same brokerage and everyone signs off understanding how this works.  You of course would still represent your Seller.
Sure, it would be nice to keep all of the commissions, but at what expense?  TREC allows a “dual” relationship where the agent acts almost like a mediator not giving advice to either side (I’ve been told this is done in more rural areas of the state where Realtors may be few and far between) but likely most agents cannot do this and will accidentally favor one party over the other.  This can open the “1” agent to litigation and more.
My advice, refer this Buyer to another seasoned agent within your office, explain intermediary relationships and move forward allowing both parties to get excellent service.  I think intermediary is a good tool when used properly.  The Buyers new agent can just as easily show them other homes (even those with other firms), review pricing, negotiate repairs, etc.  If the home is right, the Buyers will buy it.

Mike McEwen on 09/18/2015

Intermediary is a joke.  The use of the word “represent” is entirely inappropriate.  You cannot represent parties on opposing sides of a negotiation.  That is the equivalent of the prosecutor representing the murder defendant.  Attorneys may not represent both sides of a negotiation.  Intermediary has been described by one attorney as a “legal fiction”.  Your seller contracts w/ you to sell his property and act as your fiduciary and then a buyer comes along and you dummy down the process by using intermediary.  Intermediary exists because the real estate lobby wants to keep both sides of the transaction under one roof.  If the broker appoints two licensees to work w/ (much better than saying represent) the law says they may give opinions and advice.  How vague is that?  Does that mean the agent appointed to work w/ the buyer can say “The seller needs to get rid of it and he is desperate.”  Does it mean the agent assigned to the seller can say “This guy has deep pockets and we need to stand firm.”  Intermediary needs to be repealed in the interest of moral, intellectual and legal honesty.


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