Recently, Edina Realty made national news by pulling their sellers’ listings from two of the most popular websites frequented by home buyers, Realtor.com (the number 1 real estate website in the country) and www.Trulia.com (in the top 4). Both of these sites are free and provide valuable information to consumers. Industry critics and real estate consumer advocates like CAARE believe Edina Realty did this to capture more double-sided commissions (called “hoggers” or “double dipping”). Although that may be great for Edina Realty, the inherent conflict of interest is very bad for real estate consumers – both homebuyers and sellers.
What would you do? If you were interviewing Realtors to sell your home, which agent would you pick: One from a firm that has a marketing plan that includes placing your home in the most popular (and free) real estate portals in the nation or one from a firm that excludes those sites?
Ironically, if Edina’s plan works, they could get paid about twice as much while hiding their listings from potentially millions of potential site visitors per month. If buyers find Edina Realty listings on Edina’s website they will be directed to an Edina agent. If they use that agent to buy an Edina home, Edina will pocket a whopping double commission and expose both clients to dual agency. Dual agency is the worst conflict of interest an agent can impose upon their clients. It means that both the buyer and seller would forfeit their right to an advocate and representation, at the exact time when they need them most – when they are ready to negotiate. When the buyer selects an Edina agent, he does not just forfeit his right to representation, he neutralizes and forfeits the seller’s as well. Dual agents are prohibited from negotiating price or terms (negotiating advice is one of the top reasons consumers hire Realtors). That means less work for the firm and a lot more money. It also means less service from Edina’s agents; and potentially less PROFIT for sellers and less potential SAVINGS for home buyers.
By forgoing potentially millions of eyeballs on two leading real estate portals, one could argue that Edina is betting the “double dip” they will get from dual agency transactions will more than make up for the loss in visibility — a loss that could increase market time of listings and loss of clients who DO want wider distribution of their home. Still, if they play their cards right, consumers will never notice the change and Edina will see a lot more hoggers. Even worse is if the speculation pans out that HomeServices of America, Inc. (Edina’s parent company) is using Minnesota as a testing ground for the rest of the country. If other brokers see that Edina is profiting from double dipping, their conflict of interest (and self-dealing?) could spread across America as other brokers follow suit.
www.Trulia.com, www.Zillow.com, and www.Realtor.com do not just provide great market exposure for sellers, their business models help reduce the risks of encountering dual agency (zero representation). Through links, banner ads, and agent directories including buyer agents, consumers using Trulia, Zillow and even Realtor.com are given a choice of agents to work with, rather than simply being directed to the listing agent. The result, hopefully, is that fewer buyers are trapped in a dual agency situation without their consent or knowledge.
BOTTOM LINE: Home buyers should ALWAYS select an agent from a brokerage firm unrelated to the listing so their advocate can negotiate tangible financial benefits. That is possible when buyers use real estate portals which allow them to choose a real buyer agent without a conflict of interest. By pulling their listings from Realtor.com and Trulia.com, and funneling them through their own website, that is not an option with Edina.
Edina Realty should be concentrating on giving sellers the best possible representation, rather than how to reduce their seller’s properties’ market visibility. In this day of monumental real estate mistakes, do we really want to have consumers unrepresented? And then charge them twice as much to do it? Does Edina really think buyers and sellers will miss the obvious conflict of interest in the cartoon above?
Home buyers and sellers, if you are confused by broker babble and fine print about dual agency, designated agency, and other forms of counterfeit buyer agency, ask your buyer agent to sign this Pledge of Allegiance to reveal if he is really on your side!
Note: If you have a home listed with Edina Realty and are not pleased with this situation, you may want to have your listing agreement reviewed by an attorney.
CAARE says: Sellers should ALWAYS review marketing plans of prospective listing agents and make sure that plan includes listing their property in all the free websites that buyers frequent (www.Trulia.com, www.Zillow.com, www.Yahoo.com, www.Realtor.com etc…). In addition, review CAARE’s consumer-friendly LISTING CONTRACT for ideas in terms to include in your contract. Buyers should avoid websites that are affiliated with brokerage firms and choose independent websites so that they are not automatically directed to an agent that will cause them to forfeit their right to representation. Finally, if you are an Edina Realty agent, please address this matter with management.
This story was submitted to CAARE by Bill Wendel. Bill is an exclusive buyer agent (EBA) from Boston. In order to avoid conflicts of interest that come with dual agency, his firm only represents buyers and will not accept listings.Bill also is a strong advocate for the negotiation of buyer brokerage fees and is included in our LIST of brokers who discount.
His website: www.realestatecafe.com and can be reached at RealEstateCafe@gmail.com