I just re-read the below post and I don’t want to come off as an apologist for cheesy agents. I really am trying to explain some of the ethical considerations that go into doing business as an agent. I will start with this: In a market where buyers’ agents are only paid upon closing, it is necessary to work with multiple buyers at any given time. Many leads just turn out to be tire-kickers with lots of time on their hands.
The primary cognitive referent regarding “good” or “bad” practices in this business is ethical behavior. That means the question an agent will ask (of himself or whomever) is “Is this practice or deed ethical?”
I don’t want to give you a semantic lecture but that basically means a question of how widespread the practice is, how clearly it was described, and whether or not it is considered “fair” by those who encounter it most. Ethics are shared morals.
Personal or non-shared idiosyncratic morals do not get much consideration in the grand scheme.
If you used the standard California Association of Realtors Residential Purchase Agreement and Joint Escrow Instructions (hereinafter referred to as the “CAR RPA” or “RPA” or “offer”) there is a section (paragraph 27B) that states that there may be offers from other buyers and that the agent you are working with may bring those offers.
The fact that this is disclosed to you (whether or not you actually read the form you signed) and that it is a standard of practice is what makes it not unethical.
It would be arguably unethical for your agent to start going over the specifics of somebody else’s offer with you. While it is considered legal, most agents will not do it. That means that he probably acted more ethically by not discussing the other offer with you.
Here is an example. If a good deal comes active in my market, I will show it to several of my buyers. If 2 buyers asked to write offers, I would be required to represent them enthusiastically and ethically. It would be unethical for me to discuss one client’s business with another client. I would ethically disclose to each of them that, in theory, there could be competing offers. Also, please remember that the agent is not the one that decides how much the buyer offers.
It is also arguably unethical for the listing agent to be discussing the property issues with you and without your agent. While certainly different, there are some similarities to the relationship an attorney has with his client. This listing agent is a professional with more expertise than you and he really could have taken advantage of you.
Here is an example. Recently, I had an open house. The property was listed by an agent in another city (Encinitas). I do this a lot to meet prospective buyers and gain name recognition. Another agent in my office with whom I am friends sent her clients by themselves to the open house (she was busy). She knew that I would respect the agency relationship between her and them. Because the clients have seen her and I together and because we have desks next to each other and because we have the same logo on our card, they assumed we are really part of a team (which would generally mean we share income and clients). This was understandable and innocent. They started to talk about purchasing strategies. I stopped them right there. I advised that I am not their agent and that I was, in fact working with buyers on that particular property. The implication was (correctly) that I would use what they said in my presence to the advantage of my clients. That bothered them but I would rather have irritated attendees than act unethically.
