(post by BT) I have a client who purchased a property to rehab and sell. Some agents are in this business for so long, that they not only don’t remember the proper rules of engagement, but they even create their own rules. I had an agent give an offer on one of my clients’ properties.

[Now, some definitions, so you can enjoy this. In this scenario, there is an agent "representing" the buyer and another one (me), representing the seller. When an agent brings a buyer, in all cases (except when the agent has a buyer-broker agreement), even though the broker works WITH the buyer, that agent has fiduciary duty to the seller; therefore he/she works FOR the seller, who, by the way, is paying their commission. Naturally, it's the agent's job to get the highest sales price possible for the seller.]

OK, back to the story. Agent, a nasty prune, tells me she has an offer. Asking price is $665,000, the offer is $575,000. “Do you think the seller will go for that?” I ask her. “I know he won’t take anything below $650,000.” “That’s Impossible”, she says. “He only paid $490,000″. $575K is a good offer.” At first I explain to her that the place was a wreck at $490K. Seller took out construction loan, had closing costs, carrying costs, etc. Then it hits me? So I ask: “Did you get an exclusive buyer-broker agreement signed Is the buyer paying your commission? Whom are you representing here?” “No, why?” She sounds surprised. “You’re misrepresenting, disclosing to the buyers information about the seller he did not authorize. You are not looking out for the seller’s best interest.” “What? I have been in this business for 10 years. You don’t need that. What are you talking about?” Like I said, so many years and working with her own rules. She researched the property data and told her buyers how much the seller had paid originally, and assisted them in the low-ball offer. Remember she is NOT representing the buyers. She is a sub-agent of the seller. The seller?s attorney could fight against paying her half of the commission, and at the closing table they would announce to her that if she works on her own rules, she is working for free!