By Tom Albrecht | Jan 30, 2018 | Buyers Advice
If you really want to knock step two out of the park, then the key is taking care of step 1 first.
The steps are:
We’ve been doing this for a while now, and we know that the strength of the relationship you have with your agent will be a main determinant of how successful you’ll be in step 2.
Every day I get the chance to build a life-long trusting relationship with a new client and guide them through a complex process. I get to be there for them. In a perfect world, I wouldn’t be there; they’d have a family member with the necessary skills and licence, but most people don’t. So it’s my job to establish (through total honesty) a deep level of trust so that we can go out and achieve amazing results together.
The heart of this is the fiduciary duties. These are duties that agents in a sole agency relationship owe to their clients at all times. They are what make the real estate industry special. They establish the legal foundation for the powerful relationships that I get to form. Without them, I wouldn’t have such meaning in my job:
The guide is designed to lay out the representation choices to you, the consumer. Not all real estate transactions involve a brokerage, but if they do, there are three possible types of representation relationships:
a) Sole Agency b) Representing Both Parties with Limited Duties c) Customer Status
d) One of the clients can be referred to a different agent or brokerage
A classic example of a conflict of interest in when a common law brokerage or associate at any type of brokerage represents a buyer and seller who wish to transact the same property.
The problem (or “conflict”) in this situation is that, by definition, the agent cannot represent both parties with “undivided loyalty”. So the option of sole agency is removed unless either the buyer or seller is referred to another brokerage or agent.
The agents and both clients must actively choose to enter into this type of relationship. For customer service reasons, we would almost certainly never say no to it, however, we do like to point out the downsides of this form or representation (there are a few benefits, too). It can leave inexperienced buyers/sellers vulnerable to the other party in the transaction, and we find that the general level of trust falls rapidly in this high-pressure environment. In the past, this led to the majority of the (handful of) customer service issues we had.
Our brokerage was an early adopter of a really cool thing called “designated agency”. Until 2014, when two agents had clients in the same brokerage who wanted to trade a property between them, a conflict was deemed to exist (as above). Typically, both clients retained their agents and selected solution #1. For example, neither agent was allowed to advise their client what price to offer, or counter-offer.
It was a shame because a lot of strong, trusting relationships between agents and their clients were unnecessarily weakened. If I, Tom Albrecht, had a buyer client interested in the listing of Agent B in the same brokerage, and neither I nor that agent knew any of the confidential information of the other agent’s client, then why should we not legally be permitted to give our respective clients that really important advice?
So in 2014, a new legal form of real estate brokerage was authorized by the Real Estate Act, and as a forward-thinking organization, RE/MAX® Fort McMurray was one of the first to jump on it.
In this new form of brokerage, each of our agents has the responsibility of keeping their clients' information confidential at the client level (not brokerage level). They are then afforded the right to retain a sole agency relationship with their client regardless of whether Agent B happens to be working for the same brokerage or not. This new legal form of brokerage much more accurately reflects the reality on the ground; it’s really not hard to keep your client’s information confidential from other agents in the brokerage or team.
This change has reduced the frequency of conflicts of interests at our brokerage. Considerably.
We’re also specialists, so we basically never have agents representing a buyer and a seller client on the same transaction. This reduces the regularity of conflicts significantly.
Further, our team has vast quantities of training, operating policies and systems in place so that we all perform our roles in extremely similar ways. This means that, in the worst case if a conflict of interest arises, we simply offer to refer our client to another world-class specialist on the team! Here’s an example:
Let’s say I have a buyer client who wishes to place an offer on one of Breanna’s listings. Breanna and I are treated as the same agent for most listings, so a conflict exists. It’s not practical to transfer the listing, so the buyer client is offered to work with another A-Team buyer’s agent. This is rare, but it happens. The trick is to inform the client of this possibility at the buyer consultation and reassure them that their confidential information will remain confidential forever (that’s the law). The talented buyer’s agent then advises the buyer client (even on price), and Breanna defends the seller client the way she knows how.
This stuff might seem a bit intangible, but it’s crucial because it’s the tangle of laws, philosophies and systems that underpin our team. It’s what makes of clients’ experiences different, better...
We offer a world-class team of specialists who work for an innovative brokerage called RE/MAX® Fort McMurray. The architecture means that we are able to promise our clients the ability to be in the strongest form of agency relationship (sole agency), basically in all situations.
No more double-ending, no more losing fiduciary duties and no more rushed/unfamiliar relationships. No more customer service issues and client stress.
Just deep, protected, trusting relationships that lead to success in step 2: Buying or selling a home with gusto! If you’re ready to buy or sell, and you want to leverage the power of a relationship like this, please say “Hi”!
Thanks for reading my blog. :)