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How confidential is your offer?

How confidential is your offer?

 

I was reading a post by Margaret Rome about confidentiality and it got me thinking about that.

Firstly in Pennsylvania until you either sign a buyer agency contract or a listing contract the agent does not have to hold the information you tell them in confidence. You are unrepresented, and anything you share can be used against you in negotiations. Many buyers visit open houses and share information with the agent sitting the open house who represents the seller without thinking. Always be cautious in real estate what you share and with whom. In fact whenever you meet a real estate agent in a potential real estate transaction they should ask if you are represented andexplain agency to you and present you with a Consumer Notice which covers our duties and obligations in the different roles.

One of the questions we get asked a lot is, "How confidential is my offer?"Detective

To understand the answer we need to return a little to explain agency in Pennsylvania and along the Main Line. Any agency contract, listing or buyers' agency is between a Broker, the company the agent works for and you, the agent who is an independent contractor represents the broker.

Who represents whom? In a transaction you are either represented or not. If not as I mention above anything you say can be used against you by the agent representing the other party. Loose lips can cost you money! A broker can be a Transaction Broker where they represent neither party and are only there to help the transaction take place, they give no advice to either party.

Before buyer agency was introduced buyers often thought the agent showing them the house represented them, when in fact they represented the seller as a sub-agent of the listing broker. With the introduction of buyer agency, this ceased, because bigger brokers do not want agents from other brokers representing thier clients because of liability issues.

So if the seller is represented by the listing agent and the buyer is represented by a buyer's agent; and If both these agents are from the same firm, the broker is a Dual Agent representing both the seller and the buyer. In this situation Many Main Line real estate firms use Designated Agency, where different agents represent the seller and the buyer. Both agents work independently of each other and keep their clients information and negotiating tactics and position confidential from each other.

Sometimes you will get an agent who is a Dual agent, representing both parties, but this limits what they can do for each client. They can do nothing for either client that will injure the other party in any way. So they have to offer limited services so as not to do this. It is far better to have your own representation and the confidentiality that goes with that so there are no mistakes.

But, let's return to our original question. How confidential is my offer?

As your buyers' agent, I will only divulge the details of your offer to the listing agent. This protects your negotiating position and your tactics for achieving a purchase. However, once the offer is in the hands of the listing agent and the seller, unless the seller and the listing agent are asked to sign a confidentiality agreement there is no guarantee how confidential your offer will remain. If the seller should get multiple offers, they can instruct their listing agent to share your offer with another buyer and their agent for example. If a listing agent is careless, an offer may be seen by other agents in their office and should the deal not go to settlement, or that agent have a buyer interested in the same property the details of your offer might be known to another buyer.

What you can be asured of on my part, is that even if I have another client who wishes to make an offer on the same house, another form of dual agency arises. I will not disclose I am making an offer already on the same house, nor can I let you know I am making another offer on the same house with another client or the details of those offers, so you both have the benefit of confidentiality. So far in my career, I have come close to this happening, but it has never actually happened.

Interestingly what many don't realize, this confidentiality goes beyond settlement, other than for public record information. Anything you share that is personal or of a financial nature is confidential if you have an agency agreement, for ever. That is good to know.

If you have any questions about agency or buying or selling a house please contact us.

If you are buying or selling on or around Tredyffrin Easttown or along the Main Line we can help you,  contact us or connect

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Comments

Nick & Trudy, thanks for laying out the importance of understanding the various ways a consumer is represented by an agent. This is very important information that many people do not know. I hope many consumers will see this and have a successful transaction.

Posted by John Wiley, Lee County, FL Real Estate GRI, SRES,GREEN,PSA (Right Move Real Estate Group- EXP Realty) about 4 years ago
Thanks John, it varies from state to state, we often find people think it is done one way because that is how it is where they are moving from.
Posted by Nick & Trudy Vandekar, 610-203-4543, Tredyffrin Easttown Realtors, Philly Main Line (Long & Foster Real Estate Inc 610-225-7400) about 4 years ago

Good morning Nick and Trudy,

Great information for a old and new agents.

Make yourself a great day.

Posted by Raymond E. Camp, Licensed Real Estate Salesperson Greater Rochester (Howard Hanna Real Estate Services) about 4 years ago

Thanks Raymond, my maternal grand parents lived in Rochester, not been there for a long time, all I remember is my grandmother complaining about the amount of snow.

Posted by Nick & Trudy Vandekar, 610-203-4543, Tredyffrin Easttown Realtors, Philly Main Line (Long & Foster Real Estate Inc 610-225-7400) about 4 years ago

This is such an important topic. I rarely hold open houses any more as most sellers I encounter are opting out of them but when I DO hold one I am sure to let every person coming through that door know who I work for. We have an unrepresented document for them to sign which can drive home the point a little more.

Great post!

Posted by Shannon Milligan, Richmond VA Real Estate Agent/Associate Broker, RVA Home Team - Winning with Integrity. (RVA Home Team) about 4 years ago

Shannon it is interesting, I have found over the last couple of years with the increase in the internet more sellers opting for open houses because so many buyers are unrepresented. In PA agents at an open house should have a consumer notice to share with the public but few do I find.

Posted by Nick & Trudy Vandekar, 610-203-4543, Tredyffrin Easttown Realtors, Philly Main Line (Long & Foster Real Estate Inc 610-225-7400) about 4 years ago

Great post Nick & Trudy - not only mentioning the way things are supposed to be done, but also the way you do things, is a nice touch.  Confidentiality is extremely important, as is doing right by clients.  Folks buying & selling real estate on the Main Line are in good hands with you.

Posted by John Meussner, #MortgageMadeEasy Walnut Creek, CA 484-680-4852 (Mason-McDuffie Mortgage, Conventional Loans, Jumbo Loans, FHA, 203(k), USDA, VA,) about 4 years ago

Thanks John appreciate the compliment.

Posted by Nick & Trudy Vandekar, 610-203-4543, Tredyffrin Easttown Realtors, Philly Main Line (Long & Foster Real Estate Inc 610-225-7400) about 4 years ago

Nick & Trudy - this is such a good explanation of agency.  I don't feel this is written enough about, nor is it properly reviewed by many agents upon first serious contact with a perspective buyer or home seller.  We even have it spelled out in a brochure that we are mandated in our state to present, but few do.  I can't tell you how many buyers who are 'shopping' the listing agents and have seen 5 or more homes and are always surprised when I tell them this is mandatory - they've never seen it before, nor have they been told about agency????  Go figure!

Posted by Debe Maxwell, CRS, Charlotte Homes for Sale - Charlotte Neighborhoods (www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310) about 4 years ago

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