Love the one you’re with

Agency-representation law can’t be that simple … can it?

by Louise Hull   Is our agency law dumb? Or is it the real estate agents? I’ve been asking myself this question for years. A quick look back may provide an answer.

I remember when I was introduced to the concept of agency in real estate. As a consumer, I was looking for my first home and had the naiveté to ask the agent we were working with—a person who had spent days with us and acted like my best friend—what she thought would be a fair price to offer for a home. Her answer? "Oh, I represent the seller—I couldn’t tell you that!" I thought: How dumb! And I also felt a little betrayed.

My first exposure to agency concepts from the agent perspective came shortly after the instructor for my first real estate class began with "Under all is the land … ." He soon moved on to discuss fiduciary duties. "You represent the seller," we were told. "This is a sacred duty. Even if you are showing homes to your mother, and the seller is a corporation you have never heard of, you represent the seller!" How dumb was that?

I remember the first time I heard an agent talk about buyer representation. What heresy! Off with her head! Or at least off with her license! It took a few months of retraining and deprogramming for me to see the logic of buyer agency. I finally came to see that the seller hires the listing agent to sell the property and really doesn’t care if that agent splits the money with Mickey Mouse as long as the property is sold at a good price and they are treated fairly. What a breakthrough!

A lot of smart REALTORS® got together in 1994 to change agency law in Texas. After many meetings talking about fiduciary duties, buyer versus seller representation, facilitators, and intermediaries, our current law was drafted. I hope it is still working.

But, I sometimes wake in the night and ask myself that question: Is our agency law dumb? We have followed practices in the past that, in retrospect, appear unreasonable, unworkable and, yes, dumb.

I believe our current law was exactly what we needed to take us from a period of seller agency (subagency) to the place we are today (most agents who work with buyers representing those buyers). Perhaps it is time for yet another change.

A few years ago, I attended a CRB class that included a discussion of agency concepts. The instructor asked that each student tell what kind of agency law was practiced in their state. One lady in the class really got my attention. She said, "I’m from Louisiana and we practice presumed agency. If an agent is working with the seller, they are presumed to represent the seller. If an agent is working with the buyer, they are presumed to represent the buyer. You just love the one you’re with!"

Now that’s an agency law even I can understand! Certainly you would still have written disclosure to the consumers represented. Certainly you would still have written listing agreements and written buyer-representation agreements setting forth the terms of the representation. However, the thought of removing some of the hoops we are currently required to jump through (that are being ignored in many cases anyway) was an epiphany for me.

When was the last time you called to show a property and disclosed that you were working for the buyer? When was the last time you considered yourself a subagent? Oh … that’s what I thought. I don’t think it’s the real estate agents that are dumb.

Go sell something … and love the one you’re with. But follow our current agency law … until we get a better one.

Louise Hull, CRB, CRS, GRI, is broker/owner of Cornerstone Properties in Victoria. She is a TREC commissioner and served as TAR chairman of the board in 2000. You can e-mail her at louise@louisehull.com.

Photo © Artville.

home   current issue    top 10    resources 

discussions   contact us   search

Buyers & sellers, visit www.texasrealestate.com.
REALTORS®, visit www.texasrealtors.com.