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Avoid becoming a faux principal
How many principals are involved in this transaction anyway?
by Chris Heagerty A typical real estate sale has a buyer, seller, and one or two agents. Too often we are confronted by the dysfunctional phenomenon of the agent-principal, aka the faux principal. This agent has taken a larger-than-life control of the transaction. He deludes himself into believing that he too is a principal in the deal. The agent who acts as a faux principal can be spotted easily because he:
- Makes decisions of what is a fair counter without his principal’s input;
- Relays what the counter will be to the other agent when the counter or contract comes in;
- Oozes "attitude" about the merits of terms; and
- Presents the offer or the counter to his principal colored by his own bias.
When the agent reacts with attitude about potential outcomes without first consulting with the true principal, the other agent wonders how much chance the terms have of being honestly considered by the principal. Will this agent (faux principal) color his presentation of the offer terms in how he would respond? Often it is hard enough to convince your party to offer reasonable terms. The likelihood of acceptance is diminished when the terms also bear the weight of agent attitude.
The argument, though, can be made that the agent who conveys the terms to his principal also bears the responsibility of buyer or seller representation. Thus, he must put the interests of his principal above all others in the transaction. If an offer or counter is low or the terms unorthodox, is the agent not bound to tell the principal how to react? It is obvious that the line of distinction is thin, but there clearly is a line.
While some terms can stand on their own merit, the true weight can only be assessed contextually by the affected parties. How then could an agent know the relative values in the principal’s eyes of accepting a lower offer versus not making a deal at all, or a desirable closing date versus occupancy before or after closing? Even the most-seasoned agent has presented terms expecting one outcome only to be completely surprised by his principal’s reaction.
So how does an agent keep his own personal bias in check and still champion the interests of his client? Focus on the following do’s and don’ts to avoid becoming a faux principal yourself:
Do:
- Present only the facts of a contract or an offer to your buyer or seller first.
- Allow the buyer or the seller to voice his reaction to the terms without your own bias
- Encourage the principal to prioritize and articulate his desired outcomes.
- Present the pros and the cons of the original offer or counter.
- Review with the principal the implications of counters within the context of his priorities.
Don’t:
- Carry attitude with you when you present.
- Make the decision of the seller’s or buyer’s best counter before you present the terms
- Betray your attitude to the other agent.
- Allow yourself to become emotional about the contract or terms.
We represent our clients’ best when we refuse to allow personal bias to color the facts. If you become emotionally involved in offers and counters, then you sacrifice objectivity. Once objectivity is compromised, you handicap the effectiveness of your representation, and you are giving your client less than your best.
Chris Heagerty, CRB, CRP, GRI, is market director for eRealty.com in Austin. E-mail her at cheagerty@eRealty.com.
Photo © Digital Vision.
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