Episode Summary

What is dual agency? How does dual agency effect home buyers? Can a dual agent offer a buyer 100% loyalty during the home buying process?
What is a pocket listing or an off-market listing? Who decides which buyers are allowed to tour a pocket listing? Are pocket listings a good idea for home buyers? Are pocket listings a good idea for home sellers? Who benefits the most from a pocket or off-market listing?
Should I agree to dual agency when selling my home?
What happens when your agent represents both buyer and seller?
On this episode of the podcast, Listen Up Home Buyers! Andi DeFelice, the owner and broker of Exclusive Buyer’s Realty in Savannah Georgia, offers her advice and tips on dual agency.
Andi is a former president of the National Association of Exclusive Buyer Agents, naeba.org, and currently on the board of NAEBA.

Episode Notes

Transcript:

Victoria Ray Henderson (00:08)
This is Listen Up Home Buyers, the only podcast offering advice and tips from true buyer agents. My name is Victoria Ray Henderson. I am so happy to have with me today my good friend and associate in NAEBA, Andi DeFelice. Andi DeFelice is a former president of the National Association of Exclusive Buyer Agents, and she is the owner and broker of Exclusive Buyers Realty in Savannah, Georgia. Okay, Andi, I’ll let you talk now. Hi, thanks for joining me.

Andi (00:36)
It’s nice to be here. Thank you for having me this morning.

Victoria Ray Henderson (00:37)
I’m so glad you’re here. Andi and I are going to talk about one of our favorite topics and that would be dual agency. Andi, you want to give a definition of what dual agency is?

Andi (00:46)
Dual agency in a nutshell is when the agent and we’re talking about a home buying transaction of course when the agent is representing both parties in the home buying experience. For example if you’re a buyer and you call the agent whose name is on the sign in the front yard of the house that you want to see that’s the seller’s agent. Can they represent you? They say they can. They’re legally allowed to in all but eight states.

Victoria Ray Henderson (01:14)
Yeah.

Andi (01:16)
But the problem that you run into there when you’re dealing with a dual agency situation and they have to inform you that that’s what you’re doing and you have to give them permission to represent you in that way is you’ve got somebody that’s representing both sides of the transaction. And so our issue with it and a lot of people’s issues with it is how do you fairly represent both parties when they’re on opposing sides for lack of a better way to say it?

Victoria Ray Henderson (01:42)
Yeah, no, mean, it’s 100 % right. It’s probably the main reason that I sought out exclusive buyer agency and representation because, ⁓ so just to be clear, the agent can’t fully advocate for either party. So they’re not supposed to advise you as a buyer on, know, for example, a below asking price offer. They’re not supposed to advise you on any terms of the transaction.

Andi (01:51)
Yeah. Thank you. No. Mm-mm.

Victoria Ray Henderson (02:07)
I don’t know that a lot of agents actually understand that they’re not supposed to do that because I’ve overheard conversations of agents talking about how they make this work, quote unquote. But yeah, so at the bottom line, you’re dealing with a situation where you’re not fully represented as the buyer. And then talk a little bit about what designated agency is.

Andi (02:16)
needs it. Exactly. Well it’s basically the same thing. Typically what happens with a designated agency situation is an agent in the brokerage that represents the seller. And remember in real estate all clients belong to the broker. So you have the broker and then you have agents under that broker. All of the clients belong to the broker. The agent is representing and working with that client but at the end of the day

the broker has the fiduciary responsibility to the client. So in designated agency, the way that I understand it is the broker assigns an agent to that client. So it’s the same thing. You still have the umbrella of the broker that’s responsible for all things that happen to the clients. And you have buyer clients and you have seller clients. And when those two come together on the same piece of property, it’s when you run into a problem or you can run into a problem.

Victoria Ray Henderson (03:09)
Mm-hmm.

That’s right.

Andi (03:26)
So it’s like think about it when you’re buying a house and if you bought a house in the past and you’re riding around in the car with your agent and you’re in a dual agency situation. So let’s say you’re working with an agent that’s representing a seller and you’re looking at her house or their house. You’re going to have conversations with that agent. You can’t not about your qualifications to purchase the house, what you’re pre-qualified to spend.

Are there circumstances that you might make that agent aware of like I’ve got a job offer, I’ve got to be in this house within the next 30 days. All of that information because they’re actually representing the seller as well and you’ve given them permission to be a dual agent, they can share all that information with the seller which can decrease your negotiation So, yeah.

Victoria Ray Henderson (04:10)
Yeah. It makes 100 % sense, yeah.

Andi (04:15)
the way that exclusive buyer agents work, we’re more interested in getting you the best, fairest deal than we are closing the deal, So you just have to think about it in those terms. To me, you’re protecting your interest by sharing information with someone that you can trust, which

Victoria Ray Henderson (04:24)
Right.

Andi (04:33)
I don’t know how you can do in a dual agency situation.

Victoria Ray Henderson (04:37)
So, for those of you, I’ll just recap that real quick because I know representation is probably the most misunderstood part of real estate. ⁓ And the Consumer Federation of America did a study and they asked a lot of buyers and that was the understanding from the study. in a dual agency situation, one single agent can represent a buyer and a seller in a transaction.

Andi (04:45)
Absolutely.

Victoria Ray Henderson (05:00)
In designated agency, you’ve got three people involved, the broker who actually has two clients, and that would be the buyer client and the seller and they will assign an agent to a buyer typically so that they will have an agent, you know, on representing

Andi (05:05)
Thank

Victoria Ray Henderson (05:18)
And I’ve frequently seen teams that involve a husband and wife but you’ll have a buyer be with one team member and a seller be with another team member. And this is a group of people who work together on transactions. So if you’re in a part of the country that doesn’t have exclusive buyer agency, I would suggest, and Andi, jump in and add what you think. I would suggest trying to find an agent

Andi (05:30)
Absolutely. Okay.

Victoria Ray Henderson (05:42)
who is either a small brokerage and you’re not seeing their actual listings ⁓ for sale or ask an agent, are we going to see listings that belong to you today or your brokerage What else would you add ⁓

Andi (05:49)
Mm-hmm.

I think that’s very wise. Well, and you can, and I get this question because a lot of people that come to me don’t realize that I am an exclusive buyer agent, although it’s everywhere on all of my, but they still don’t, maybe they don’t get it. They don’t understand what it is. I was interviewed by a physician client last week who was shopping realtors and she found me online. And that was one of the questions she asked is how many listings do you have? And I said, I’m so glad that you asked that question because it means

Victoria Ray Henderson (06:08)
Well, yeah, of course.

Andi (06:25)
that you’re somewhat educated, you know that we need to be having this conversation. So yeah, and you’re right. These team aspects and ours in Savannah, we have numerous brokerages that have teams and they literally have buyer representatives on their team. That’s all they do. They call them buyer specialist. Don’t think for one minute when they have their team meeting every week.

Victoria Ray Henderson (06:44)
Mm-hmm.

Andi (06:49)
Stories aren’t being swapped with I have a buyer that’s willing to spend this much money on this house in this neighborhood listing agents over here. What have you got that we might could work together and the other and again, I’m not disregarding or or criticizing that business model for those particular agents. I think they’re as honest as they can be as a consumer.

You have to really understand the position that you’re putting yourself in when you are working with one of those agents we protect our clients because they’re our sole interests. That’s all we’ve got is our buyer clients. So our primary focus is protecting them from the start to the finish. If you’re dealing with a listing agent or you’re finding yourself in a dual agency situation, that agent’s responsibility is to protect.

Victoria Ray Henderson (07:24)
Mm-hmm. Right.

Andi (07:37)
both clients, the seller and the buyer client. And I don’t know how you do that. That’s why, like you said Vic, that’s why we do what we do. Because we never have that conflict of interest. We never have that divided loyalty. No one ever questions who we’re advocating for, right? Because it’s always the same answer. It’s always the buyer.

Victoria Ray Henderson (07:55)
That’s true.

I work in the greater Washington, DC area, a lot of good professionals out there and they do a great job. real estate has a kind of a leaning toward listings. Just in general, how many listings can I get this year? And buyers,

frequently treated as if you’re bringing in wood to a fire. I got this fire in my listing and I need some wood to get that fire going, right? there is an advertisement that is being used in the area that I live in. the ad says that

Andi (08:15)
Exactly. Yep.

Victoria Ray Henderson (08:27)
we can get your house sold at above the asking price this percentage of the amount of time. And we have a bank of buyers who are just standing by to buy our listings. And I’m thinking, okay, so you have a bunch of buyers who are just kind of waiting around to buy the listing that you’re representing. Who’s representing those buyers? And how are you

Andi (08:50)
Yeah, right, exactly.

Victoria Ray Henderson (08:53)
How are you helping those buyers if you’re telling the listing side, the seller side, we’re going to get you a higher price than what you’re asking for?

Andi (09:02)
that’s awful. I mean, that’s to me, that’s terrible. If you picture this corral of buyers behind a gate, all of a sudden, let’s open it up and let them all run to the listing. And then are you going to pit these buyers against each other? So then you get into a bidding war. I mean, this is is that. Yeah, that’s terrible. That’s an awful thing. I always when I do buyer consultations or I have clients that come to interview me to see if they want to work with our company.

Victoria Ray Henderson (09:04)
Thank. Yeah. Yeah.

Andi (09:27)
There’s a list of questions I give them, whether they’re working with me or they want to interview other agents, which I encourage them to do. We are the only exclusive buyer agency in Savannah. So we are the only brokerage that can say we will never represent a seller. You will never have us come to you and ask you to sign permission for dual agency. We just don’t do it. Other brokerages are going to because they have to because in the event you want to look at a listing that is listed by their broker, because remember

Clients belong to the broker. You have to allow them to do dual agency. ask that question. How many transactions have you represented both sides of the party? How many transactions have you been a dual agent in? It’s important to know because there are those realtors, and unfortunately I think there are some, hopefully the minority, not the majority, that don’t really understand their responsibility as a dual agent.

because that’s where you’ve really got to be very careful as the agent, like you said, not to give advice to this party that you’re not giving to them. I would never do it would blow my mind to try and navigate that kind of relationship. It’s just not something that’s wise. So as a consumer, that would be the first question I would ask a realtor that I was considering interviewing.

Victoria Ray Henderson (10:39)
Now it’s, yeah.

Andi (10:49)
And keep in mind, and I encourage my clients all the time to go visit open houses. We’ve already signed a buyer brokerage agreement, so they’re committed to me. And the agents sitting the open houses are, at least in Georgia, required to ask that question of any consumer that comes through an open house. Are you represented and have you signed an agreement? Realize nine times out of 10, that agent that’s sitting that open house, if they are not the listing agent,

Victoria Ray Henderson (11:10)
Mm-hmm. Mm-hmm.

Andi (11:18)
they are working with the listing agent. again, that agent sitting that open house is representing the seller and they’re primarily sitting that open house to pick up buyers. They want to find unrepresented buyers. Can’t fault them for it. It’s a good way to spend a Sunday afternoon. It’s a good way to possibly build your database for later on down the road. But remember who it is that you’re talking to. So keep your comments to a minimum. It’s just unwise not to.

Victoria Ray Henderson (11:44)
Mm-hmm.

The first week of March was National Consumer Protection Week. And Naba put out a great press release. If you haven’t seen it, go to naba.org to read that press release on an issue that I really want to hear what you have to say about. And that is, and it comes up a lot in the spring, but pretty much all year round, the pocket listing, the off-market listing, the one that is used as a marketing tool for a lot of, a couple of listing brokerages do it a lot.

Andi (11:49)
Mm-hmm. Thank you guys. Mm. ⁓

Victoria Ray Henderson (12:14)
where they say, we’ve got a property just for you, Mr. Buyer We have a whole bank of them and they’re not even gonna be put out to the general public. It’s just gonna be for people that what, they hand pick. mean, that’s why, by the way, we made this press release because it could be a fair housing violation. But Andi, you talk about that for a little bit. I wanna hear your thoughts on that.

Andi (12:24)
Yep. Mm-hmm. Could definitely.

Well, the first thing that comes to mind, even though I’m not a seller centric brokerage is how does that benefit a seller? If you’re not exposing the property to the masses, where’s the benefit to the seller to start with? So if as a seller, I would not agree to that because I want it exposed to everybody in the world. But at the same time, from a buyer’s perspective, how do you get to be the lucky one that gets picked to see that house? And how do you know?

Victoria Ray Henderson (12:53)
Yeah. Hmm.

Andi (13:05)
that the agent that’s representing that pocket listing, which is what we call them, is actually going to give you all the details. It’s not all of the information that should be available to us is not necessarily available because it’s being kept such a secret. So I just don’t see that it’s beneficial to a consumer to pursue something like that. And I get asked all the time by buyers, do you have access to off-market listings? No, I don’t, because I don’t, one, have listings. That’s why you’re talking to me.

Victoria Ray Henderson (13:10)
Mm-hmm.

Andi (13:35)
because I don’t do listings and two, I don’t trust them. I don’t trust them. There just is an uneasy, like you said, there’s a fair housing situation that I could see that really raise its ugly head because the laws of real estate and I use the term laws loosely, but properties that are on the market are to be made available to the masses, period. End of conversation.

Victoria Ray Henderson (13:58)
Everybody.

Andi (14:00)
That’s how you have a fair real estate market is every every marketable property is made available to everybody in all the different ways it can be the IDX. Well, yeah, and even those can be put on Zillow realtor.com. Those can be out there as well.

Victoria Ray Henderson (14:11)
Unless it’s for sale by owner. Yeah.

if you’re telling somebody, okay, you’re the right buyer for this property, what is that criteria? Does that mean that that buyer is not going to be able to have a home inspection? I mean, think about it. Are you telling that buyer, this off-market property is going to be available, but

you can’t have an appraisal contingency, meaning that you wouldn’t be able to get out if the price you’re paying it’s under the list price. Yeah. then, right. And then if the home inspection, if you come back with problems with the home inspection, is that seller going to negotiate with you because they’re

Andi (14:42)
Right. Yeah. Yeah. No, no. You’re right. If it does it the value doesn’t come back. Yeah.

Victoria Ray Henderson (14:56)
They’re going to probably say, I want to go with somebody who’s going to waive that home inspection. mean, it goes into some really weird areas. Then the biggest thing is the liability issue for the seller and the listing brokerage because that is where I would really be nervous if I were a listing brokerage. Am I exposing myself to a lawsuit?

Andi (15:00)
Exactly. Mm hmm. Yeah.

Victoria Ray Henderson (15:21)
Let’s say you tell somebody, only way this seller is going to take your offer is if you go 50K over the list price or waive your inspection. And then you find out when your appraisal comes back that it was actually appraised at under that list price. mean, some of these weird things could come up with that. Yeah. So just a heads up for consumers, the pocket listing or the off-market listing, it sounds like a sweet deal, but no.

Andi (15:29)
Exactly.

I think that falls into the, if it sounds too good to be true, it is. I mean, I think that’s where you really have to be thoughtful about the thing that you have to understand as a consumer and we as EBAs get it. This is one of the biggest purchases you’re ever going to make in your life. And in our business, and one of the things I say to my client, I don’t care if you’re spending $50,000 or $5 million, this is important to me.

Victoria Ray Henderson (15:50)
It’s not.

Andi (16:18)
As a consumer in the home buying process, in my opinion, it is paramount to have a well-educated, very experienced realtor that is representing your interest and your interest alone. Because as you said, home inspections, home appraisals, there are so many things that can come up during the home buying process.

that if you don’t have the right sort of guidance and the right sort of advocate on your side, you can really find yourself in a world of hurt. And why? Why would you put yourself in that position? Find somebody, interview somebody that you feel like you can trust, that truly has your interest at heart, and that you’re going to be giving this person a tremendous amount of responsibility on your behalf. You want to be sure they know what they’re doing. There’s a

We’re I’ve been in the business for almost 35 years, which means I’m really old and I’m not technologically savvy. There are several things my clients, mean spreadsheets, I hate them, but I know what I’m doing when it comes to real estate. So find yourself someone that you feel very comfortable. make sure they know what they’re doing with regard to selling real estate and talking through it. And also

Victoria Ray Henderson (17:17)
Yeah. Yeah.

Andi (17:30)
Find someone that has a good rapport and a good ability to communicate with the agent that’s on the other side of the transaction. You don’t ever go into a real estate, at least in my opinion, it is a mistake to go into a real estate transaction thinking the person on the other side is your adversary. They’re not. They’re not. But a lot, I’ve seen some of the other agents that do treat this as if we’re going to some kind of war or battle.

Victoria Ray Henderson (17:48)
yeah. Yeah.

Andi (17:57)
And I’m like, are we fighting for? We’re trying to get the best for our client. You’re trying to get the best for your client. At the end of the day, we both are successful and everybody’s happy. That’s the goal. And that should be the end goal in the real estate transaction is you walk away with everybody feeling like they got exactly what they wanted. Nobody got harmed in the transaction. Everybody got what they were looking for.

Victoria Ray Henderson (18:00)
Yeah. Yeah, yeah.

Andi (18:21)
I just I want everybody to go out and find an agent that they love that they trust that they feel good about and find the home that will bring them joy and that they can make their own and and love this real estate transaction. Real estate is one of the best investments you can make for your lifetime. Just make sure you make it with somebody who’s got your back. That’s just easy way to go.

Victoria Ray Henderson (18:41)
Yeah, 100%.

Great way to wrap it up. Andi DeFelice is the owner and broker of Exclusive Buyers Realty in Savannah, Georgia. She’s been in the business for a long time 35 years, right? Yeah, 35 years. Andi, thank you so much for joining me on this.

Andi (18:46)
Thank you. Yeah, yeah. My pleasure. Thank you for having me, Victoria. Enjoy the rest of your day.

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