[quote=SD Realtor]Okay I shouldn’t say ALOT of unscrupulous activity but there are 2 back to back transactions that simultaneously had very suspicious behavior of listing agents with short sales and low and behold they have buyers who either are represented by them or someone in thier office. [/quote]
First, I would like to preface that I don’t know as I write this what the sketchiness in your situation was. My purpose here is not to justify the actions of agents with poor integrity. My only point is to enumerate some of the differences in the ethical calculus as it relates to short sales, short pays, and distressed markets in general.
Short sales are weird. They put the listing agent into a position that does not conform to the usual incentive structures. For example, I have 2 short listings right now. Since my only goal with these is to help my seller avoid foreclosure, I have zero interest in securing the highest possible sale price. I am only interested in the contract price insofar as it is something that can be supported by comps. If there is comp support for 500, then I will show anything within 15% of that amount. I might even show less if I felt there was a case to be made for approval by the lender. The implication (which is generally born out in practice) is that current offers are not secret. I want as many offers as possible (since the lender delays may mean lots of buyers will drop out) and if telling prospective bueyrs that I have 4 offers below asking and 2 at asking will incent them to offer, then I am acting in my buyers best interest (and ethically) by disclosing the antecedent offers to those potential buyers.
Regarding dual agency, the usual factors are still not at play. In a non-distress situation, there is an inherent conflict (in dual agency) because the buyer wants to pay as little as possible and the seller wants as much as possible. This conflict is why I (to my colleagues’ dismay) advocate referring out double-ends to another agent to protect a buyer’s interest. Since, in a short the seller is indifferent to the buyer’s wants and has only one non-secret want himself, this conflict model does not hold. I feel much more comfortable double-ending on these because buyer and seller desires are generally harmonious and often have no conflict.
