Disclosed Dual Agency... Why you should avoid it.

There are many ways you can be represented by a Real Estate Agent in Kansas & Missouri.  One of the most nefarious is known as Disclosed Dual Agency (only legal in Missouri).  This is where the agent represents both parties and owes a fiduciary responsibility to both parties.  To realize how this is simply impossible one must understand the definition of "Fiduciary".

To operate in a fiduciary capacity one must provide the following services to their client; Obedience, Loyalty, Disclosure, Confidentiality, Accounting and Reasonable Care.  Just looking at the list you can probably already tell that it would be impossible to provide all these services to both sides in a transaction, such as disclosure & loyalty. 

It's simply not possible to hear from the buyer that they are willing to pay "x "& not tell the seller.  Or put the shoe on the other foot and know that the seller is willing to take "y", but don't tell the buyer that. This one little sticking point is what makes it hardest for me to understand why so many states still allow Dual Agency.

If I'm representing you as a buyer or seller, anything I can find out about the opposing party I'm supposed to share with you as my client.  If I can get their agent to blab about how much the clients are willing to deal so they can dump the property, we just found out that they are motivated and I need to disclose that to you.  Or if I'm working with you as my seller client and I know the buyers love the house and are willing to pay full price, then I should disclose that to you and advise you not take anything less than full price.

When you operate as a Dual Agent you know all this information on both parties.  It is impossible to remain loyal and still disclose.  This practice simply should be illegal in all states and no one buying or selling a home should allow for Dual Agency to be any part of it.  In the Kansas City metro there are over 8,000 Realtors.  Surely one of 8,000 would be willing to assist you buy or sell a home and remain loyal to you through the process.

If  a single Realtor wants to put a transaction together between two parties they can do so as a Transaction Broker.  This is where they are neutral and loyal to no one.  This is a suitable alternative if all parties agree and the Relator can still double dip on the commission, which is the only reason some Realtors love Dual Agency in the first place.

In closing I can find no place where Dual Agency is ever acceptable, I suggest to all people who ask me that they stay far away from it.  I'd be interested in your thoughts or comments... am I being a stickler on defining what our agency relationship and fiduciary responsibilities are?  Is it so hard when you find two willing parties to just operate as a transaction broker?  Let me know what your point of view is...

Attitudes in Real Estate

I've noticed an amazing trend in the Real Estate Industry. While talking to other agents out there I am finding that the ones who think the market is bad aren't doing very good and the ones that think the market is good are doing great.

Some of you may be quick to say something like; well if I was doing a lot business I'd think the market was good too. However you've got it backwards. Those of us with a positive attitude are able to succeed. The power of positive thinking isn't just some catchphrase heard at motivational seminars; it's really a deciding factor on your success in any given industry.

I can tell you people are selling homes (I should bring four new homes to market in the next three weeks) and there are buyers out in the market right now like crazy. I've seen my traffic skyrocket in the last week. Unfortunately I sold most of my inventory last month and I'm only seeing the traffic increase on my three current listings.

I suggest that if you are thinking of listing your home you should probably interview several agents and if you find some with a positive attitude and proof of sales then you're going to have success getting your home sold. If the only agents you interview have a long face and talk about how bad the market is right now, keep searching. Those agents most likely aren't going to do a great job marketing your home because they are predisposed to think there is no point in their efforts.

Every time I hear an agent griping about the market I get a smile on my face. That's because I know I have one less agent to compete with :) The buyers are thinking things are turning for the better, sellers seem to notice the fact we are getting better, and I would like to know when the lion share of agents will realize the market is actually better than it's been in two years!!

Let me know your thoughts... are you seeing positive things in our Real Estate market?

Home Buyer Tax Credit Ending

Here we are with just over a week to go until the home buyer tax credit expires. I would have assumed with the way all the experts were talking there would be an absolute frenzy of activity with people trying to get under contract by the April 30th deadline.

While the market surely has improved and I've noticed substantial gains in my business over the last month, I haven't seen a crazy frenzy of buyers trying to get in under the wire. Talking to some of my colleagues they seem to be in the same boat. A lot of business, but nothing to far above the normal spring jump.

I've mentioned in the past that a lot of industry "experts" were thinking the best plan of action would be to wait until after the tax credit expires to purchase a home. The rationale being that all the buyers will be under contract by April 30th and the prices will drop substantially (anywhere from 5% - 10% depending on which expert was speaking) in the first week of May.

I have to wonder if a lot of buyers are taking this advice. I've told several buyers I have been working with that I thought rushing out and buying a home before April 30th just to get a tax credit was foolish. There are a lot of factors that go into buying a home and taking the time to find the right home, in the right location at the right price isn't something that should be done hastily.

It will be interesting to see if my remaining three listings go under contract in the next week. I've put four under contract this month but I truly think that has more to do with spring time rebound than the tax credit. Perhaps I'm being stubborn thinking that the government really shouldn't be in the market in the first place. I'm excited for the tax credit to end because I'm pretty sure the Market is on the upswing and seeing it happen without government kickbacks will convince many people who are still unsure of the market conditions.

Just wanted to throw my opinion out there as a Realtor who's in the trenches daily. I look forward to your opinions and feedback, perhaps I'm way off base... what do you think?

Sellers Market?

It appears that at least for certain price ranges and neighborhoods in Kansas City there are the signs of a sellers market emerging. Homes going under contract for full or above full price in less than a week is becoming more frequent in the last couple of weeks. This could be because of the tax credit expiring April 30th, or possibly pent up buyer demand, or a combination of both. The real question is how long will it last?

I'm no recognized industry expert by any means, but I do work successfully in this industry. I feel that while the expiring tax credit plays a role I really feel that pent up buyer demand is a bigger issue at play. Home sales have been down for almost 18 months. The home buyers out there who have been putting decisions off for a while are finally getting back in the market.

The biggest factor that drives home prices is demand. If multiple buyers are interested in a property and multiple offers come in a bidding war ensues. This bidding war will inevitably push the price over asking price because no one knows what others are bidding. This is encouraging to see and I've seen it first hand working with buyers and sellers.

In my opinion the buyer demand will keep the market strong for at least through the summer. There have been experts advising buyers to wait until after the tax credit when prices tumble. Of course this philosophy will only work if no one listens to the advice. If droves of buyers are waiting patiently for May 1st to come around then the prices will remain high and the market will remain strong.

I started in this business in April of 2008. I've never seen a crazy market where homes sell before the agent even gets them posted on MLS. I can tell you however, that I've had much success getting homes sold quickly. This market we find ourselves in currently is great, and I think it is pretty close to a normal market. A normal market is better considered a flat market. It is important to note that flat markets don't last long in any industry. Normal economic rules will dictate that we will be swinging to a sellers market slowly but surely.

When you are choosing an agent to represent you buying or selling, make sure they've had success in this current market. You want to be sure they are there to fight for your best price when you're selling, and ensure your offer gets considered when you're buying. If you have someone representing you that thinks the market is still a buyers market and suggest you submit offers 10 or 20% below market value you will be loosing many opportunities to buy.

I hope this was helpful, anyone thinking of buying or selling a home needs to know this a great time. Low prices and low rates won't last forever.