Ray Wilson

Ray Wilson, author of Bought, Not Sold, brings academic discipline and field experience to expose consumers to the reality of the realty industry.



Reality in
Realty (1999)

1. "When An 'Agent' is not an Agent"
2. "Is You Is, Or Is You ain't, My Agent?"
3. "The Dating Game"
4. "States of Confusion"

Reality in
Realty 2001
1. Career Advice
1.1 "Don't Quit Your Day Job"

2. Seller Advice
2.1 "Appraiser, Yes! CMA, No!"
2.2 "Listing Purpose & Pitfalls #1, 2, & 3"
2.3 "Listing Pitfalls #4 & 5"

3. Buyer Advice
3.1 "EBA, EBA, EBA"
3.2 "Promises, Promises, Promises..."
3.3 "You! You! You!"

4. NAR
3.1 "The 'Big Grab' versus the Big Dope"
3.2 "If not revolution, then evolution""

Reality in
Realty 2006
1. "Making Magic in Chicago"
2. "No Sign of Reform in NAR Leaders"
3. "The Wrong in the Percentage Commission"


© 2001, Ray Wilson

Personally, I'm glad certain environmentalists did not themselves evolve in time to prevent the extinction of the dinosaur. Call me regressive.... Extinction is a natural part or the process of evolution.

HYPOTHETICALLY, it is possible to construct both organization and procedures to provide both buyer agency and seller agency in the same real estate firm.

PRACTICALLY, human imperfection makes the actual provision next to impossible in one or two agent shops, and fully impossible in moderate to large firms. However, firms "giving it a go" may be a link in the evolutionary process...

In "Bought, Not Sold", I do acknowledge that "single agency" on both sides can take place in a one or two person agency with a very small number of listings and an equally small number of buyers in a huge market providing all clients with many alternatives. It requires full and upfront disclosure to all consumers, literal and informed permission from all clients to operate that way, and the self-discipline of a saint. The problem for a client -- buyer or seller -- is that is very difficult to tell the difference between those who do it right and those who don't. Still, my research for the book revealed that, rare as they are, good single agents do exist and have earned the respect even of Exclusive Buyer Agents (EBAs). In fact, at one of its early conventions, the National Association of Exclusive Buyer Agents (NAEBA) honored the single agent who actually coined the phrase "single agent" -- Bill Broadbent of California.

What's important here is that "single agency" is legal -- even under the Common Law! If the agent's first contact with a potential buyer is as agent of his sellers, and the sellers allow him to contract with the buyer after the buyer indicates no interest in their properties, there is no violation of the sellers' agency contracts. Likewise, if the agent's first contact with a property owner is clearly as an agent of his buyers, but turns up that the property is not suited to those buyers, and the buyers agree -- then listing the home is not a violation of the buyers' contracts. Under the Common Law, people can agree to such things, provided there is full disclosure and no deception. Again -- it is legal.

Now, any reader here can immediately come up with, "Yeah... but...." It is not as simple as it sounds, and good single agents must develop procedures for contingencies and inevitable problems. It is at least workable in the one or two person firm for highly conscientious, highly disciplined, experienced professionals. These tiny firms are flexible enough to avoid any situation of promising agency to opposing sides in any market interest. In my estimation, it is not workable in a bigger firm where the consciences, motives, schemes, stresses, competencies, perspectives and simple knowledge of several persons all come together in one corporate entity. But it is still legal for the well-intended moderate-to-large firm operator to try to make it happen -- provided it is done honestly and openly, with full disclosure to all clients.

The hitch is that it would require incredible management competency, scrupulous agent selection, high-powered training, and superhuman case monitoring. If it were my agency, I'd place the firm next to my Catholic Church, and try to arrange for a drive-through confessional for me and any of my agents who happen to be RC. The catch-22 in that is that the priest would tell us to stop messing around with the "occasion of sin" -- the situation causing our transgressions. That "occasion" is trying to be an agent of both opposing sides. In wartime, we shoot people for that.

But, again, it is hypothetically -- if not practically -- possible to provide both buyer agency and seller agency in the same firm, and was always legal under the Common Law. So, why then, have traditional firms and their national trade association lobbied legislation to circumvent or abrogate the Common Law? Why concoct "designated agency" laws that legalize the designation a "buyers agent" in a listing firm at the time of transaction (too late to avoid the conflict of interest in the earlier property search and marketing activity)? The answer is largely in the effort and/or competency needed to do it right from the beginning. For some it is just too much work. Others are clueless about what it takes to keep agency promises to both buyers and sellers. Still others remember the truth the industry has known for a century -- that being the agent of both sides is impossible -- but they simply want to collect agency level fees from both sides.

In Michigan, the leaders of the state association of Realtors openly admitted that there were legal avenues under the Common Law, but that they couldn't get the membership to understand them or attempt them. The association president herself went on the record as saying that the only way to put an end to illegal practices by that state's Realtors was to change the law to make those practices legal! Believe it or not, Michigan's "astute" legislators actually bought that argument (or were they sold it?). In any case, Michigan now has law-abiding Realtors.

In supporting such legislation, competent traditional firms who might have legally marketed credible (if inefficient) buyer agency along with seller agency, shot themselves in the foot. They now face legalized competition from any firm which can spell d-e-s-i-g-n-a-t-e-d! In evolutionary terms, the legislation made a "protected species" of these less competent firms who could not have survived in the new environment of expanding consumer awareness.

The fact is that no firm with more than a very few members can meet all the promises of agency to both buyers and sellers. And those broken promises can be enforced or lead to restitution in any state, independent of the real estate statutes. EBAs are professionals who have faced up to that simple truth, and the failure of the National Association of Realtors (NAR) to do that lead to the formation of NAEBA. It is also true that well-motivated and competent listing firms can at least construct an organization and procedures which are honestly intended to serve both buyers and sellers with agency. They can make full disclosure. Internal "firewalls" can be attempted to protect confidentiality, with procedures for enforcement and discipline. New agency agreements forms for both buyers and sellers can be adopted. It could all be legal under Common Law.

And, in the end, it wouldn't work. The unmanageable complexity would become evident and most firms would find their niche in either Exclusive Buyer Agency or Exclusive Seller Agency. In the meantime, firms trying both with honest intent could evolve along with the market quite profitably. Unfortunately, the rules of smooth evolution have been undermined in those states that have abrogated the evolution-friendly Common Law and adopted rules aimed at insuring the survival of the unfit.

As I said at the beginning, we are fortunate that "certain environmentalists did not themselves evolve in time to prevent the extinction of the dinosaur". The Common Law is itself a reflection of natural evolution in what is natural to the human animal -- the human brain . Evolving first in all social animals is a common awareness of the reality of how other like creatures behave -- and every herd, flock, pride, or colony enforces conformance as a matter of survival. We humans evolved language and called that awareness, "common sense" -- and the most critical parts of that evolved into "Common Law" . Times change, circumstances change. That is why (as I said) "extinction is a natural part or the process of evolution."

Unfortunately, dysfunctional environmentalists who would block natural extinction have indeed now evolved. They discovered tools, especially legislative tools (but with as much sophistication as children discovering their parents' gun closet). They've used those tools to insure the perpetuation of a single economic subspecies, wreaking environmental havoc on the natural market functions upon which the rest of the homo sapiens species depends.