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We started a residential brokerage company about 5 years ago. To that point, my hands-on experience with residential real estate was simply that of working with a Realtor as a homebuyer or seller. Coming from a law and commercial real estate investment background, however, I noted a number of critical shortcomings in residential brokerage with respect to the “consumer experience.” My entering this business (and later forming Sage with Jeff in 2007) was inspired by an opportunity to offer homebuyers and sellers greater professional competence and a higher standard of representation than is typically encountered in residential real estate.
Below are five residential real estate brokerage “insider” observations that you may not expect to get from a real estate agent.
It’s By the Industry for the Industry. The laws, the regulations and even the form contracts used in real estate transactions protect the interests of brokerages and their agents first and those of homebuyers and sellers second.
Conflicts of Interest are Prevalent. The business glosses over the serious conflicts interest that brokerages and their agents profitably (and legally) engage in with respect to the clients they “represent.”
Brokerage is Regarded as Commodity Service. Despite there being a very wide range of professional competence, experience, work ethic and integrity among real estate agents, consumers (to their detriment) often perceive real estate brokerage as a commodity service.
Agent Self-Promotion is the Focus. The business has increasingly become one of agent self-promotion; many agents focus primarily on selling themselves rather than on providing quality real estate service.
You Don’t Know What You Don’t Know. Many consumers believe they understand more about real estate, the market and “how things work” than they actually do. More importantly, even the best-educated consumers don’t know what they don’t know. Misinformation/ lack of information lead to incorrect assumptions that often result in costly mistakes.
Awareness concerning these five points is a great first step in making good real estate (and real estate services) decisions. Future blog posts will directly and indirectly expound upon these observations.
Buyer Clients Benefit From True Agency
we Will Never Represent Both You and the Seller in the Transaction
Real estate brokerages, through different agents in the office, often “represent” both the buyer and the seller in the same transaction. This practice, known as designated agency, is a serious conflict of interest. True Agency precludes designated agency. By conducting a conflict check before accepting a new seller client, Sage avoids representing opposing sides in a tra