Life & Real Estate in Eugene, Springfield & Lane County, Oregon

 

Several open house attendees overheard the remark.  One was the brother of the seller.  The brother naturally told the seller.  The seller was furious, believing that "the sitting agent should at all times, represent the property to it's best".

But the house-sitting agent initially believed he'd done nothing wrong, thinking that everyone should have known he was "just doing the open house to obtain buyer leads".

At last count, Alan had received 175 comments on his post.  The response was nearly unanimous:  The agent holding the open house was way out of line to be suggesting a price lower than the listed price, especially in such an off-handed manner.  He surely was. 

Many who commented believed that an agent holding an open house should never act as anything other than a sub-agent of the listing broker and therefore of the seller.  Many others believed he might have offered to do a CMA for an interested buyer but should have refrained from making a personal suggestion about price.  Some believed the sitter could act as a buyers' agent.  Many did not. 

The responses very much reflected the wide variety of state agency laws in place around the country.

 

My response was one of the last comments and went something like this.

Part of what is at issue here is lack of clarity about:   What is the sitter's assigned role?

If a sitter is only able to represent the seller, why would ANY AGENT ever consent to be a sitter.

Is the lister going to pay the sitter by the hour?  Is the lister going to split the listing side commission if the open house results in a sale?  Why is the sitter there?  Gaining Brownie points with the Principal Broker?  Just plain old Experience 101?  Does the sitter know?  Does the lister know? 

  Does the seller know?

 

 

 

For that matter:  Why does any agent do an open house on their own listing? 

Is their only goal to sell that house - acting solely as the sellers agent? 

In some states and with some brokerages, the answer is "Yes".

But in many (perhaps most) instances, the sitter (or lister) is there not only to simply "promote" the listing but also to act as a selling agent hoping to

(1) help get the house sold or (2) obtain a buyer lead.

If the prospect likes the house, the lister or sitter will often want to act as the selling agent

(if state agency and company rules permit).

That desire should never come as a shock to the seller.   If that is going to be happening, the seller surely ought to know about it in advance.

 

If the prospect does not like the house and is going to leave the premises without acting on it, the lister or sitter is going to attempt to turn that prospect into a buyer lead.

  They are going to sell them another house if they can.

Where this is not possible, conducting an open houses (by a lister or a sitter) makes little sense.

 

That gets us to the question:  What is proper conduct for the lister or sitter at an open house?

My answer is:   To sell the house until it is clear that isn't working, then attempt to convert the lead.

 

Oregon law helps this process along in one important way.  State law requires that an agent give a copy of an  Agency Disclosure Pamphlet to a prospect at the first substantial contact.

Typically, those are made available in an open house.

If someone comes through the open house and says they already have an agent they would normally not be handed a copy of the disclosure pamphlet. The lister or sitter is going to simply attempt to sell the benefits and features of the house (as an agent of the seller).


However, if the open house prospect has no agent and does show interest in the house (by for example, asking about price, terms, etc.) they must receive the disclosure pamphlet.  Then the lister or sitter is going to ascertain if "disclosed limited agency" is acceptable to them on the purchase of the open home.

If it is, the buyer should be asked to sign a standard one-page form entitled

"Disclosed Limited Agency Agreement for Buyers". 

This is not an exclusive employment contract.  This is just simple agency disclosure demanded by prudence.

 

Prospects who are obviously not interested in the house, might well leave without being handed a pamphlet. 

However, if the lister or sitter want to recruit that party as a buyer by offering (for example) information on other properties, they must first hand over the state pamphlet.

 

That brings me to the essential question really most related to Alan's original post:

What did the seller know about what really happens in an Open House and when did he know it?

In the story in ALAN'S post, the seller found out only when his brother (understandably) informed him.

The seller should have been shocked by the sitter's price comment. 

But he should not have been surprised by the fact that the sitter was acting as a buyer's agent. 

He should not be shocked if the lister also acted as a selling agent at an open house.


The lister should have been up-front about what really happens at their open house long before it was scheduled.

Oregon law also helps out that process.  A listing agent - or any other agent working under the supervision of the same Principal Broker (e.g. , a sitter) - cannot represent a buyer without the seller's written permission.

That permission is sometimes not granted until the opening lines of the sale agreement are executed as part of preparing and presenting an offer.

But the seller's permission is best granted at the time the listing is taken.

We have a standard form, an addendum to the listing agreement, by which that permission is granted - in a business-like fashion - with appropriate discussion.

It is called the "Disclosed Limited Agency Agreement for Sellers".

 

That is the time to let the sellers know that, if the home is actually going to be sold at the open house (which they personally expect and for which they often work hard to prepare), it will be because the lister (or a sitter) is there, prepared to act as a buyers' agent, the moment sufficient interest is shown.

Without that prior approval, my brokerage will not hold an open house.  There is simply too little to be gained for either the seller or the agent.

 

 

************

Jim Hale

Principal Broker

Graduate, REALTOR Institute                e-PRO
actionagents.net
1715 Linnea Avenue
Eugene, OR 97401-1962

Office:  541-484-0219
Direct:  541-543-9991
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