If the agent represents neither party, they have the duties of a licensee generally (see my post to Steve above). There is a difference between a non-agent and a buyer’s agent but practically, it is just not that significant (except for the duty of finding the buyer a property which can be waived).

Russ

Are you saying the duties and liability are exactly the same if on line 15. we check “Selling Lincesee represents ‘neither party’ as when it says Selling Lincensee represents “buyer”? That can’t be.

Steve,

How much per hour did you have in mind. Let’s see if the minimum liability that Russ can come up with matches your hourly rate. I think a no agency option could be the ticket, if permitted by law. Let’s assume you just want an agent who opens doors and hands you comps, without advices, and you agree to “represent” yourself. I’m assuming that is fairly close to what you have in mind.

you need to read the specific duties of a buyer’s agent in tandem with the duties of a licensee genererally.

18.86.030 Duties of licensee.

(1) Regardless of whether the licensee is an agent, a licensee owes to all parties to whom the licensee renders real estate brokerage services the following duties, which may not be waived:

(a) To exercise reasonable skill and care;

(b) To deal honestly and in good faith;

(c) To present all written offers, written notices and other written communications to and from either party in a timely manner, regardless of whether the property is subject to an existing contract for sale or the buyer is already a party to an existing contract to purchase;

(d) To disclose all existing material facts known by the licensee and not apparent or readily ascertainable to a party; provided that this subsection shall not be construed to imply any duty to investigate matters that the licensee has not agreed to investigate;

(e) To account in a timely manner for all money and property received from or on behalf of either party;

(f) To provide a pamphlet on the law of real estate agency in the form prescribed in RCW 18.86.120 to all parties to whom the licensee renders real estate brokerage services, before the party signs an agency agreement with the licensee, signs an offer in a real estate transaction handled by the licensee, consents to dual agency, or waives any rights, under RCW 18.86.020(1)(e), 18.86.040(1)(e), 18.86.050(1)(e), or 18.86.060(2) (e) or (f), whichever occurs earliest; and

(g) To disclose in writing to all parties to whom the licensee renders real estate brokerage services, before the party signs an offer in a real estate transaction handled by the licensee, whether the licensee represents the buyer, the seller, both parties, or neither party. The disclosure shall be set forth in a separate paragraph entitled “Agency Disclosure” in the agreement between the buyer and seller or in a separate writing entitled “Agency Disclosure.”

(2) Unless otherwise agreed, a licensee owes no duty to conduct an independent inspection of the property or to conduct an independent investigation of either party’s financial condition, and owes no duty to independently verify the accuracy or completeness of any statement made by either party or by any source reasonably believed by the licensee to be reliable.

I just reviewed Washington State’s Agency Law on buyer’s agents (an entire half-page), and it provides little protection to the buyer, apart from gross fraud on your part. The current owner of the house could be a drug dealing child molestor who went on a shooting rampage and killed several of his neighbors, but you aren’t even obligated to tell me that little fact! You ARE required to refer me to a profesional for anything outside your area of expertise. If the home inspector (which I pay for out of my pocket) doesnt find the massive termite damage in my house, you’re off the hook. And where does it say that you’re obligated to come up with an accurate offer price? You’re just making up a bunch of straw men.

You asked:

“So Russ, if you personally were buying a home and needed me to open three doors for you, is there any reason why you, personally, would need to retain the right to be able to sue me if YOU make a wrong choice? Is there any reason why you, personally, need to retain the right to sue me if the contract has not been adequate to your needs? Why isn’t there an option that says “Russ Cofano is a Big Boy and can fend for himself and only needs to pay $50 an hour for someone who will open a few doors for him at a total cost of $500 bucks?” Are you actually saying that the State of Washington precludes you and I from coming up with an agreement on those terms?”

No, I am not. You confused my earlier post regarding disclaimers of liability or exculpatory agreements with minimum service levels. The two issues are different. Let’s revisit the law as it relates to Buyer agents. It says:

“Unless additional duties are agreed to in writing signed by a buyer’s agent, the duties of a buyer’s agent are limited to those set forth in RCW 18.86.030 and the following, which may not be waived except as expressly set forth in (e) of this subsection:

(a) To be loyal to the buyer by taking no action that is adverse or detrimental to the buyer’s interest in a transaction;

(b) To timely disclose to the buyer any conflicts of interest;

(c) To advise the buyer to seek expert advice on matters relating to the transaction that are beyond the agent’s expertise;

(d) Not to disclose any confidential information from or about the buyer, except under subpoena or court order, even after termination of the agency relationship; and

(e) Unless otherwise agreed to in writing after the buyer’s agent has complied with RCW 18.86.030(1)(f), to make a good faith and continuous effort to find a property for the buyer; except that a buyer’s agent is not obligated to: (i) Seek additional properties to purchase while the buyer is a party to an existing contract to purchase; or (ii) show properties as to which there is no written agreement to pay compensation to the buyer’s agent.” RCW 18.86.050

Underscoring all of these duties is the requirement for the agent to use “reasonable skill and care” in whatever they do.

So let’s talk about level of service. Does an agent need to drive a buyer around? No. Does an agent need to meet personally with a buyer? No. Does an agent need to draft a purchase and sale agreement on behalf of a buyer? No. Does an agent need to accompany a buyer on an inspection? No. Does an agent need to present the buyer’s offer in person? No. You get my drift? The legal requirements above are pretty measly compared with what most actually agents do.

When it comes to disclaimers or exculpatory provisions (e.g. a hold harmless), no agreement signed by the buyer will be enforced that says you (the agent or broker) is not liable if you undertake to do something for me (the buyer) and you screw up. In other words, you fail to perform the task with reasonable care and skill as that standard is defined by the industry.

To sum up, Washington state law DOES allow buyer agents to perform very minimal services for a buyer. It DOES NOT allow a buyer’s agent to disclaim liability if they fail to properly carry out any task is performed, whether mandated by state law or as an additional service that they elect to perform for the buyer.

-Russ

Steve’s desire, Redfin, MLS4Owners….the cheapest options that the consumer “wants”, do not consider the obstacles that the Agency Laws of each state impose on the agent and consumer. In fact, there are many seller consumers who simply want a sign, a keybox and mls access. There are many buyer consumers who simply want someone to open the door and write it up. Why should state laws continue to prevent the ultimate choice of the consumer under the “guise” of protecting said consumer? Should not the consumer have the option of not wanting the state to protect them, nor the cost of same?

Where is the “no frills” version of service in the Agency Law? Why does each state conveniently omit that option? Could it be NAR lobbyists who keep that option off of the 7 to 8 page pamphlet of consumer options in each state?

Where in Steve’s questions does he acknowledge the legal standard to which we are held? The secret to that high commission is in the Agency Law. The preservation of that Standard is in fact what makes the “no frills” hourly fee not an option.

So Russ, if you personally were buying a home and needed me to open three doors for you, is there any reason why you, personally, would need to retain the right to be able to sue me if YOU make a wrong choice? Is there any reason why you, personally, need to retain the right to sue me if the contract has not been adequate to your needs? Why isn’t there an option that says “Russ Cofano is a Big Boy and can fend for himself and only needs to pay $50 an hour for someone who will open a few doors for him at a total cost of $500 bucks?” Are you actually saying that the State of Washington precludes you and I from coming up with an agreement on those terms?

If so, then we have found the answer to why an hourly fee doesn’t work. If you pick a dog on the worst lot in town and I am held responsible for your choice, then it doesn’t matter if it took you ten minutes of my time to get there. I better not be walking off with $100 and still be responsibile for all of the problems YOUR CHOICE property gives you in the weeks and months ahead.

If you want to pick a property that is priced at 20% over value, and tell me what price to put on the contract, but still retain the right to sue me and blame me when you finally figure out that you bought an overpriced dog, then you can’t pay me an hourly fee for the time it took me to “follow your instructions”.

Excellent issue, Russ. Do you really think the average consumer knows what you have just revealed here? We can’t give them what they truly want because the State Laws do not “allow” us to work at that reduced level of care. Where does Freakonmics hone in on that point. That part I’d love to read.

Nice to meet you in person last night.

Not sure I get your point about the hold harmless. Since most agency duties are not waiveable by the consumer, I am not sure what your hold harmless will do. The Washington Agency Law (and the corresponding agency duties) were written (for the most part) without regard to the amount of comp that the agent receives.

Russ

There is no reason why you personally can’t do whatever you want, if you can find an agent who will meet you on your terms. I have no problem with, and have agreed to, a flat fee of $2,500 vs. a 3% commission of $15,000 for a client like you. I take no responsibility for property selection and the client “holds me harmless” for not providing “full service”. As long as a client doesn’t hold me to the same standard at the flat fee as I would be held to at full price, I have no problem with that.

So, Steve, if you agree to “represent yourself” and hold the agent harmless with regard to fully representing you, at $2,500 vs. $15,000…we can agree here. If you want all of the protections the State and Courts have to offer you at $10 an hour, then good luck finding an agent who agrees with you.

In the industry we call that “a customer” vs. “a client”. If you want to proceed on a customer basis at a reduced rate for the lower standard of care, that is your option. If you have a problem with the house after you move in or the neighbor puts on a second story blocking your view, and you take full responsiblity without calling me to “help” you or to blame me in that scenario, you’ve got a deal.

Are you willing to sign a “hold harmless” letter to the agent, in exchange for getting one willing to sit around with his thumb up his butt watching you shoot yourself in the foot and opening doors for you for X $ an hour?

I do think your tone comes from the fact that, unfortunately, there are many agents out there who perform at this level and collect 3% for their lesser efforts. I am not one of them. And when my services turn out to be worth less than 3%, I am the first to say so, and find a way to provide “fairness”. Problem is, that takes a level of trust in the Agent/Client relationship, as there is no way to determine “value” until you get closer to the closing table.

You can make fun of the Freakonmics data all you want, but the example rings true with a lot of people who’ve sold their homes.

In the first buyer’s agent example: If a house is on an MLS and the address is listed, I can go drive out myself and find out that it’s near a utility line. I don’t need to pay you for that. I can even find out from satellite data that it’s near something undesireable and save myself the trip.

If all of the listings on the MLS have lots of photos, I can narrow down the ones I’m interested in to a small set. I pay you to show me three houses and that’s that. I don’t need any more of your time, and there’s no “hidden labor” behind it (except for that of the listing agent, and those fees were negotiated between him/her and the seller).

I agree that if you’re dealing with someone from out of town who’s on a tight schedule and needs a lot of your labor, then you should be compensated more for those customers. But if I am willing and able to do a lot of the legwork myself, I don’t see why you and your agency should receive 3 percent of the sales price..

As for your “ten minute service” scenario, all I can say that the seller’s agent should be listing the property at a higher price and wait for multiple offers to maximize the selling price for his/her client (as you pointed out in a previous post). Your “ten minute service” should not be needed in an open, efficient marketplace (especially when services like Redfin can send listing announcements to my cellphone).