Don’t Believe Everything You See on TV; A Defense of the Real Estate Agent

I turned on the television the other day, and there it was again. Two perky, young women advising their listeners about the pitfalls of working with predatory and avaricious real estate agents. This happens frequently on talk shows in particular, but can also take place on actual news programs as well. It makes one stop and wonder why that is so. 

Is it because of the universal interest in real estate? The need for a tried and true subject to inject into a slow news day? Or is it that although we consider ourselves to be good judges of character, we are still hopelessly inept when it comes to judging agents? Let’s examine a couple of the consistant comments. 

First Comment: “Agents are not working for the buyer,  they are working for the seller.”

All parties in a transaction read and sign what is called a Disclosure Regarding Real Estate Agency Relations. The front of this one-page disclosure clearly sets out the duties and obligations of the sellers, buyers and agents, while the back outlines the civil code sections 2079.13 through 2079.24 (2079.16 appears on the front).

Seller’s Agent: A seller’s agent, under a listing agreement with the seller, has the following affirmative obligations:

To the seller: a fiduciary duty of utmost care, intergrity, honesty and loyalty in dealings with the seller.

To the buyer and seller:

• Diligent exercise of reasonable skill and care in performance of the agent’s duties.
• A duty of honest and fair dealings, and good faith.
• A duty to disclose all facts known to the agent that would affect the value or desirability of the property materially, and that are not known to, or within, the dilligent attention and observation of the parties. An agent is not obligated to reveal to either party any confidential information obtained that does not involve the affirmative duties set forth above.

Buyer’s Agent: A selling agent can, with the buyer’s consent, agree to act only as agent for the buyer. In these situations, the agent is no longer the seller’s agent, even if by agreement the agent may receive compensation for services rendered, either in full or in part from the seller. An agent acting only for a buyer has the following affirmative obligations:

•  Diligent exercise of reasonable skill and care in performance of the agent’s duties.
•  A duty of honest and fair dealings, and good faith.
•  A duty to disclose all facts known to the agent, which would affect the value or desirability of the property materially, and that are not known to, or within, the dilligent attention and observation of the parties. An agent is not obligated to reveal to either party any confidential information obtained that does not involve the affirmative duties set forth above.

Second Comment:  “The agent will try to get you to pay a higher price than you need to because he or she will get a bigger commission.”

Prices are set by the seller at the signing of the listing agreement. This price is based on hours of research by the listing agent of “like” properties that have come on the market, been sold or those that have gone into escrow within the last three months.

Even if the asking price is higher than reasonable, and a buyer is willing to pay this higher price, there will still be an appraisal completed by the lending institution. If the appraisal is less than the agreed-upon price, the buyer can then made a decision to either go ahead with the purchase, renegotiate the price or cancel the agreement altogether.

Are there some agents who do not belong in the real estate industry? Certainly. Like all professions, there will be a few, though they seldom last for very long. The reality is that the real estate community is close-knit, and any action by any agent that does not meet their standards will be known quickly. 

Before taking California’s required real estate test, the prospective agent is subject to a thorough background check and fingerprinting. Each office must have a broker in charge, and the broker, agent and files are all overseen by the California State Department of Real Estate. 

Any conduct that is not considered to be in the best interest of the public is investigated. If found to be true, punishment can range from a warning to having the license revoked, to actual prision time if found guilty in a court of law. 

Locally, there are various realtor boards and association, which also oversee the daily conduct of all brokers and agents, as well as conduct inquiries into all complaints made by the public and other agents. 

So, take these TV and radio talk personalities for what they are: entertainment. And relax, you will find an agent you like and the home of your dreams.

Real Estate Activity this week in La Mesa (April 1 - 8)

20 single-family homes came on the market.

3 condos came on the market.

1 single-family home went into escrow.

0 closed escrow.