“You might need a dog toy, but your dog just needs you.”
“What does ‘exclusive’ mean?” a buyer once asked my wife, seeing a rider on a yard sign as they were driving by. “It means they don’t want you to have representation.” That’s the perfect answer – not because she’s the perfect quill-pulling marketer but because she’s sweet and honest.
But her answer is not quite true: When I list a rental exclusively by promoting it only on Realty.bots, I’m not saying prospective tenants can’t have representation. I’m just not paying for it. As it happens, around ten percent of the applications we receive will have uncompensated agents attached to them – hoping to sell the applicants a home in a year or two.
Who goes unrepresented? Everybody else – everybody who doesn’t look like a good investment to be a homeowner very soon. Tenants are always desperate – time is never their friend – so I will get over-the-transom Realty.bot inquiries from theoretically-represented parties, anyway.
Who cares? Nobody. It’s Rental, not Residential, and there are property management companies in Metro Phoenix who pay $25 by MLS to Tenant’s Agents for a completed move-in. Show, application, qualification and follow-through, perhaps weeks later. Key In Listing Office – no joke. Redfin and REX know nothing about gouging other broker’s agents.
I think an exclusive Residential resale listing is colorably a fiduciary violation, since only a full and fair test of the marketplace can surface the highest, safest, soonest offer. But: I list Vacant or Drive-By-Only homes for resale, and I’m done in four days. And: I am not your broker. In any case, the betrayed party, if any, is the seller. No harm? No foul.
Buyers who want access to exclusive Residential listings do precisely what tenants do about exclusively-offered Rentals: They go directly to the listing agent. If they show up without obvious indicia of a pre-existing agency relationship, the listing agent is procuring cause of any ensuing transaction, not that that matters in that absence of an offer to cooperate and compensate. The jilted Buyer’s Agent can pursue the buyer for his missed commission – fat chance – but the Listing Agent promised him nothing and owes him nothing.
Should such a closing occur, which party do you suppose would be most aggrieved? Now you know whose ox is gored – and why nobody gives a damn about any MLS category except Residential.
In other news:
The New York Post: Portland residents scared to visit ‘trashed’ downtown amid riots: poll.
Mises.org: Covid Deaths Plummet as Excess Mortality Falls to Pre-Covid Levels.
The Daily Beast: Bidenomics Looks Like a Ticking Time Bomb for Democrats (and the Economy).
The New York Post: The sixth borough: Florida state records quantify defections from NY.
Brian Brady says:
Serious questions:
1- Isn’t an exclusive rental listing a dual agency transaction?
2- Does the tenant have an expectation of representation by “implied agency”?
3- How does a broker properly disclose to prospective tenants that they are not represented?
May 16, 2021 — 10:36 am
Greg Swann says:
No. Limited Dual Representation, if offered, is an election made by the buyer/tenant at the time they make a commitment to a specific property. If the Listing Agent does not offer to represent the buyer/tenant, with the prior consent of the seller/landlord, only the seller/landlord is represented by the Listing Agent. The buyer/tenant can be represented at his own expense, and I cannot imagine any sane Listing Agent forbidding such representation. To the contrary, spreading the liability load at no cost seems ideal.
It is typical in tenancy relationships for the tenant to be effectively unrepresented, even if there is a Tenant’s Agent involved. Cooperation is much more like a referral than actual agency, and there is very little even a zealous Tenant’s Agent can do to change the terms of the deal – even in slower markets. Compensation is usually the goal, or the hope of other more lucrative deals going forward. Meanwhile, the tenants know they are on their own, represented or not.
I do it verbally as any ambiguity about agency comes up, but it is made explicit in the lease, with agency declarations for both parties.
We don’t do dual representation, but most often we don’t pay me as procuring-cause, anyway. With or without an agent, successful applicants get exactly the same deal, lease after lease, with zero flexibility on our end. Tenant representation is almost always pointless beyond the home-search stage: Once you have applied, your agents are income, credit and residential history, and nothing said by anyone will shout those three down.
May 16, 2021 — 2:43 pm