April 18, 2007
Who's Doing What to Whom?
When something's hard to explain in writing, one tends to hide behind word selection. My favorite words are ineffable and non-fungible. The strategy is to make the editor think you are saying something and the reader think that maybe it's his own fault that things aren't quite clear.
So, having forewarned and forearmed, I would like to discuss briefly whom brokers represent when they are out selling real estate, triggered by a recent newspaper article that claimed, despite evidence to the contrary, the broker really represents himself. Bub just wants to make the deal and collect.
In real estate by state law, no matter who is represented by a broker (buyer or seller) the relationship is special – a fiduciary kind – (there go the words). That kind is the same as lawyer/client and doctor/patient. The agent is bound not to reveal client/broker discussions and to disclose all information learned from the buyer. (At the same time telling the buyer everything he knows about the property as in Errors and Omissions actions!) We are using the broker-representing-seller model here. When representing the seller, the broker promises to get the highest price he can.
The article seemed to suggest that brokers just want to make the deal at any price. Maybe some do. Maybe others try to squeeze out any dollar available for their clients, but the nature of a real estate deal is where someone is willing to sell and someone willing to buy; without being coerced. (Hmm! Are some pitches coercion?) An agent might tell his client, "I think I can make a deal at this number for you, but if you want to push a little, we can do that, too." But it's a sensitive matter, the professional agent shouldn't destroy a makeable deal – either from ignorance or from greed. The agent makes more commission from a better price, but makes nothing if a deal falls apart.
So sure, it may be a thin line, difficult to discern (are we doing it again?) as to who is doing what to whom, but remember just because it's a win-win situation for both broker and client when the deal closes, it doesn't call for suspicion as to motives. One is allowed to profit from one's work. And profit more when that work is a sweat investment for an on-the-come reward. It's the American Way.
From Rick Hoffman, Corcoran Group East End honcho: "Things are great at The Corcoran Group! We have moved all of our operations (Accounting, Human Resources, Marketing, Public Relations, Listings, Information and Technology, and the Executive Offices) of the former Allan Schneider Associates and The Corcoran Group into one brand new office building at 57 Hampton Road in Southampton (across from La Parmigiana Restaurant). This is streamlining . . . helping to create ever-improving efficiencies and resources for our agents and the company moving forward."
Operations? Hmmm! There's a corporate tip-off.
In an e-mail from Debbie Tuma, the 200 grand was the tip-off: "The real estate market is booming, houses still available for $200,000 – not in the Hamptons." Debbie is writing from South Carolina. "I came down to Charleston to escape for the winter, and ended up on a newspaper here. The weather is hot and sunny every day, the people are friendly, and the place is really affordable."
As to last week's column – "A Good Deed Unpunished" – Chris Chapin called to say yes he and Justin do share two listings. Our nose is still good, after all. Thanks, Chris for the disclosure.
From a broker who wishes to remain nameless: "Seems that lawyers are now taking our clients and then they do a broker switch. The lawyer will suggest another broker for them if the deal does not go through. 'Try XYX, he/she are good and will find you a house.' Now you know that the lawyers have a broker in their pocket who will give them a brokers' fee from their commission."
Is that practice allowed? Seems marginal to me.
"We better watch our clients! The big bad wolf lawyer is out to get them," Chapin continued. "Lawyers stealing our customers is a very serious business. Years ago I had a few problems with some lawyers. I would refer people to them and then the lawyer would call my client direct and sell them a property. I gave them good buyers. After that I watched whom I would suggest as a lawyer. Poker's not the only game in town, Lona! There's always a story in the real estate biz."
Yes, well, I've told you all along, East End real estate is a very strange business.
Note: Correction: Corcoran Opening of EJ Campe's Images. The photography exhibition will be open to the public for viewing only on April 22, from 1 to 5 p.m.
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