SELLERS MAY LOSE MONEY using Agents That Participate in these Online Sites
By CJ Holmes, California Real Estate Broker
Perhaps you’ve read the article “Site gives real estate agents inside scoop,” specifically mentioning Agent2AgentLink and Top Agent Network. These online networks are described as ways for agents to “post details online about listings coming to market so they can be matched to interested buyers.” This activity obviously occurs before the seller signs a listing agreement, which fact by itself raises serious issues. The article mentioned listing agents that have used this network to get pricing feedback from buyers agents prior to listing a property, and that at least one agent has sold a property this way.
Sellers, watch out. These type sites can be:
A) a “free for all” where a seller’s net proceeds will likely be subject to a buyer’s price preference,
B) a great way to enhance unapproved pocket listings for agents, and
C) a subversion of the normal listing process that exposes the seller’s property to the entire buyer market.
Let’s address these issues one by one.
A. Any listing agent that wants or needs buyers’ agents to suggest a property price is either:
1) is too new to the industry to know better,
2) not trained well enough to do a good CMA (comparable market analysis), or
3) too desperate for the income from a quick sale so “gives-it-away” to the first interested buyer.
Quick sales leave (seller) money on the table, and really quick sales are usually (seller) cheats. By definition, the ‘quick sale’ focus is not about maximizing seller net proceeds.
B. Unapproved pocket listings are a violation of the Realtor Standards of Practice. A pocket listing is when an agent lists a property, but puts the property details “in his pocket” rather than on a true Multiple Listing Service (MLS). This “pocket listing” gives complete control over all property exposure to the listing agent, making it easy to sell to a favored buyer at the buyer’s favored price or for the agent to focus on double-ending the commissions. The seller has been tricked into thinking the property is actually listed on a true MLS with lots of buyer exposure, so has little reason to doubt his agent’s advice. This trick greatly reduces seller net proceeds.
These type “sharing” sites are, by definition and usage, promoting collusion between agents generally against the vested interest of sellers. And there is simply no way to ensure a listing agent would not be swayed by the temptation inherent in these arrangements.
C. A true MLS, like BAREIS in Sonoma County, has over the years, developed broad exposure to the buyer market and now includes every agent in five counties. This is the exposure that sellers want and expect for their listings. Giving the seller anything less than this could be considered a breach of the agent’s fiduciary responsibility to the client.
In my opinion, any service described as ‘giving the agents an advantage’ should immediately be suspect by all parties. Let’s remember that it’s the CLIENTS, the sellers and buyers, whose interests are paramount. Agents are hired representatives, legally obligated to “protect and promote the interests of their client.”
Fortunately, sellers can decide whom to hire and should use due diligence in doing so.
CJ Holmes, real estate investor since 1977, broker since 2005, and market research analyst since 2007