Written by Jim the Realtor

June 23, 2013

Enough people have sent this in that I guess it needs to be addressed, but this is what every agent does.

The rest of us call it “getting listings”, because we do what’s best for the seller:

http://www.latimes.com/business/realestate/la-fi-secret-house-listings-20130623,0,4463414.story?page=1&partner=skygrid

The writer called these ‘pocket listings’ but this activity should be called something else – and the buyer should paying the commission – because a “listing” implies a contract with a seller.  If any agent has a written listing agreement with the seller, they have a fiduciary duty to put the listing on the open market – it is what’s best for the seller.

6 Comments

  1. elbarcosr

    Easy. This is a story of a good buyers agent. Most agents are scratching their head since they are not really sure what that means. Hint: it is more than setting the auto emailer for new listings and showing a few mis-matched houses cold. To be fair, its takes a lot of work and persistence to be a good buyers agent; not a strong suit for most.

  2. Jim the Realtor

    I guess you are directing that at me?

    I agree that it is hard to be a good buyer’s agent, especially in this market.

    But I’m specifically talking about fiduciary, a concept that is supposed to be the law and the basis of our employment but is an inconvenience that is brushed aside by most agents when they smell a big commission.

    As long as this agent has a written contract to represent the buyer only, and the buyer is paying the commission, then fine, great work.

    I know it is possible for the seller to pay the commission and be unrepresented. But if you ask me, it it is only right if the agent – who has superior knowledge of market conditions – makes the effort to explain all the options before locking down the seller into an unrepresented sale. Otherwise, aren’t you taking advantage of people?

    I know that all is fair and if sellers are naive enough to jump at an offer without representation, then that is their problem for being naive.

    One comment that bugs me is when he said they “specializes in high-end San Diego properties”. He has sold one property in his life over $1,000,000.

    He did say he has a partner but their whole office has only sold 14 houses over $1,000,000 in their life. I’ve sold 47 and you don’t hear me calling myself a high-end specialist.

    It is more of the fluff that agents throw around that reporters don’t verify.

    The photographer is a legend, and is very legit. He probably asked to meet the agent and buyers at the property in question. It is 729 Barbara in Solana Beach – check it out for yourself to see if you think it’s worth $2.15 million to then remodel, as it says in the article. It zillows for $1,005,403:

    http://www.zillow.com/homedetails/729-Barbara-Ave-Solana-Beach-CA-92075/16726496_zpid/

    It reminded me of the conversation with the short-sale specialist. If you keep a narrow interpretation of your fiduciary duty and just put deals together where buyer and seller are happy in the end, then that’s all that matters.

    But there is a bigger game to play.

  3. Booty Juice

    Same as it ever was.

  4. tj & the bear

    Pocket listings to me are people that aren’t active sellers but that would move for the right price — like the Zillow “Make Me Move” crowd. There’s always going to be some of those around, and it makes sense that some local realtors with long-standing community ties would know of these without any contract in hand.

  5. elbarcosr

    First JTR, I was not casting aspersions at you in the least. Your dilligence and integrity do credit to your profession. I think you underestimate the number of agents that lurk your site. I was giving kudos to the idea that a buyers agent would beat the street for a client.

    As for fiduciary, yes if the buyer agent scout ultimately pretends to “represent” the seller’s interests, that is a problem. Personally, I do not beleive there can ever be dual representation; it is a complete fiction that you can look after the interests of both sides of a transaction. Period. But, I have no problem if an owner wants to sell unrepresented, nobody is forcing them to sell, and as long as it is made clear that the buyers agent is not representing the sellers interest, then fine.

    As for the value of the Barbara property, there aren’t many on that street on that side and 2 just sold so the likelihood of another coming along is slim. If the buyers knew that is what they wanted, then yes, it is worth what they paid. Open market as a tear down/major remodel job, I think the market has settled around 1.75 for that side of the street; so they arguably paid a little premium to secure their dream.

  6. Booty Juice

    I purchased the bluff-top lot I built my current house on under the exact scenario described by tj.

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