ALL PHOENIX REAL ESTATE

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This is what happens when you find yourself parsing sentences at well past 11 p.m. in the evening …

Continuing the line of thought from Tuesday’s post, here is the basic premise on which the argument against dual agency - the act of one real estate agent representing both buyer and seller in the same sale - is built:

“My job as the listing agent is to get the highest dollar amount possible for the home. My job as the buyers agent is to get the house for the lowest possible cost. Since these conflict, I can’t do both successfully.”

Except … if you’re job as a buyers’ agent is to help your buyers purchase a home for the lowest amount possible, you’re going to fail 99 times out of 100. And the flip side goes for the listing agent.

Follow my logic if you will:

A home is listed for $200,000. Your agent writes an offer for $180,000 and submits it to the listing agent. The seller counters back at $190,000. You gleefully move to the middle ground, accept the counter offer and everyone’s happy.

Did the agent who says her job is to help you purchase for the lowest possible amount do their job? Perhaps. Perhaps not. Let’s say this seller would have gone as low as $187,500 had then been pushed. Whether it was because your agent didn’t suggest countering back or because you decided $190,000 was fair, you didn’t purchase the home for the lowest possible price.

In short, your agent failed - at least if she positions her role as helping you purchase for the lowest possible price.

The truth is as a buyer you’re rarely going to purchase for the lowest possible price. And as a seller, you’re rarely going to sell for the most the market will bear. At some stage of the negotiations, the level just shy of the “highest/lowest” will become “good enough.”

Relating this back to dual agency, there is nothing in the process of one agent representing both buyer and seller that inhibits both buyer and seller from arriving at a price that’s “good enough.” In fact, it’s possible that by limiting the variables by having only one agent in the mix, the process goes more smoothly - both buyer and seller are staring at the same set of data, the same comps, the same interpretation of market condition.

How important can this be? Check recent answers on Trulia Voices and you’ll still see some agents proclaiming that the Phoenix real estate market is a buyers’ market when that hasn’t been the case for months. Not everyone has the same read on the market.

Of course, if an agent is out of touch with market reality, that theoretically disadvantages  both buyer and seller equally so at least both sides are equally blind as they negotiate.

Is there opportunity for unscrupulous behavior on a dual agency transaction? Absolutely. Does that reality doom everyone who dares practice dual agency to an eternity trapped in the charred walls of the damned? Absolutely not.

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Providing these market statistics is much like being a meteorologist here in Phoenix during the summer months.

Today - hot, sunny, chance of evening thunderstroms. Tomorrow - hit, sunny, chance of evening thunderstorms. The next 52 days - hot, sunny, chance of evening thunderstorms.

So goes this week’s inventory update for the Phoenix market - single-family detached homes down, absorption rate down, sales continued high.

As of this morning there are 20,150 single-family detached homes for sale in the Phoenix real estate market. Of these, there are 3,225 bank owned listings, 5,253 short sales and 11,672 traditionsl sales.

There were 6,638 closed sales over the past 30 days - 3,655 bank owned, 1,008 short sales and 1,975 traditional sales.

Overall, we’re looking at 3.04 months of inventory remaining on the market. Bank owned are at .88 months, short sales at 5.21 and traditional sales at a not-bad 5.91 months.

As always, all of the details from the various cities and towns in the Phoenix real estate market are below. And also as always, all data is provided by the Arizona Regional MLS and is deemed reliable but not guaranteed.

Phoenix Real Estate Inventory: July 29

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The research had been impeccable. The conclusions had been slightly off.

“We understand there’s a lot more paperwork involved with purchasing a short sale and how important it is to have an expert in buying short sales …”

Yes, there’s a lot more paperwork involved with processing a short sale - if you are the seller and the listing agent.

As a buyers’ agent, the only piece of paperwork that gets added to the normal set (unless you’re foolish enough to blindly submit a Multiple Counter Offer form and allow others to submit offers on top of yours) is the Short Sale Addendum which, among other things, has a fairly wide-ranging free pass to cancel.

We’ll take up the topic of the Multiple Counter Offer form at another date.

Over and over again buyers have asked how they find an expert on the buyers’ side of the short sale process. This species of agent exists only in as much as an agent may have written offers on multiple short sales, may have closed multiple short sales or may have run away from these like they’re a swine flu-infected Rangers pitcher. (Sorry, Vicente.)

There is nothing - NOTHING - a buyers’ agent can do to speed the short sale process or otherwise improve a buyers’ odds on what amounts to a five- to six-figure crapshoot. All a buyers’ agent can do is be diligent in the follow-up with the listing agents and the buyers; beyond that, everything rests in the abilities of the listing agent and the flexibility of the bank in question, whichever lender (or lenders) that may be.

That hasn’t stopped some agents from positioning themselves as short sale buyers’ side experts, though such “expertise” is much like being a grand champion in roullette - just because you put the chips in the right spot didn’t make it that much more likely that the ball was going to hit your number.

Speaking of short sales, Ardell DellaLoggia wrote a solid post summing up the position buyers are in when trying to purchase such a property.

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Just when I thought I was out, they pull me back in …

Here is a little known fact about the great big world of real estate blogs - there only are 14 topics to discuss, 15 if you live in an area with that odd atmospheric phenomenon known as humidity. As such, real estate agents tend to gravitate toward the same topics on regular cycles because there only are 14 (or 15) topics total.

These flareups are about as predictable as the Santa Ana-blown wildfires of Southern California if not quite as easy to schedule as Halley’s Comet. (Brief aside … we’re only 53 years away from Halley’s Comet’s next pass … does this still get mentioned in books after the 1986 pass was as thrilling as Ishtar?)

In any event, there has been a spate of articles about something called dual agency - the scenario where a single agent or single brokerage represents both buyer and seller (since in Arizona representation is by the brokerage, not your friendly beagle-toleraring agent, it’s possible to have dual agency involving more than one agent.)

My remarks on the topic will be brief and will start with a confession. I am unclean, at least in the eyes of those who feel I’m headed for the charred walls of the damned. Earlier this year, I represented the buyer and the seller on the same transaction.

How did I find myself in this clearly horrifying position? I had been hired by a homeowner to market and sell his home. In the process of marketing, I sent information on this home to buyers who had hired me to help them find their home. And then I promptly locked them in the garage until they made a decision.

Okay, so I made the last part up. What I did, to recap, is perform the job asked of me by both my buyers and my seller. Clearly, I am the antichrist.

When it came time for my buyers to make an offer I showed them the comps but could not advise them as to what to offer, since dual agency prevents me from saying something that would disadvantage the other party. I didn’t even give hints like Nipsy Russell on the $100,000 Pyramid.

As the ink dried I drove the offer to my seller and showed him the same comps. Again, I couldn’t advise him what to do - all I could do was present the numbers and talk to him about his own personal motivation after trying for two years to sell this place. He called his daughter and promptly accepted.

So, to review …

Seller hires me to market and sell his home. Which I do.

Buyer hires me to help them find a home they love. Which I do.

Theoretically, I could have passed the buyer to another agent for the contract but if it’s in the same brokerage then it’s still a dual agency situation. Where it benefits the buyer to be shunted onto an agent they don’t know versus someone they have trusted for more than a year is beyond me.

It’s not that I don’t understand the academic aspect of the debate. I do. But I also know that when the transaction ended and the seller was able to move closer to family and the buyers collected their keys, both sides were happy.

And shouldn’t that be what this is about? It’s not about the commission - how much I did or did not receive (though I did receive less than I would have had I sold the home to a different buyer and found a different property for my buyers.) It’s about what met the clients’ needs and the clients’ perception of the transaction.

The argument that they didn’t know any better gives them no credit, nor I. Because at the end of the day, dual agency isn’t a particularly complicated concept. If you’re effective at marketing a home, the situation is going to arise. Sending buyers away as a matter of course doesn’t benefit the seller, who then is left to wonder whether the new agent will try to sell this house or something more expensive around the corner for more commission.

Now, if one side of the other isn’t comfortable with the entire situation then by all means I’ll get another agent involved. So far, I can count the number of times that request has been made of me on one hand.

As I said, this isn’t a really a complicated topic. And, mercifully, it’s one that hopefully will remain smoldering until the return of Halley’s Comet … or at least until the spring.

In the interim, what say you?

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