This is the third time in eighteen years that I have needed to step aside to avoid a conflict of interest, as I define it in my business model. Most brokers don’t even consider this a conflict of interest, but I do. Do you?
The sellers: The owners of this house were clients of mine who traded up. The house for sale is one that they bought on my advice nearly a decade ago. He was a second-time client of mine, trading up from a condo that I helped him buy, when he was single. I know personal and financial matters involving the owners, since they are have been my clients. I went to a home inspection at this house ten years ago. I have discussed improvements and repairs there over the years. I did a market study of the house when they were making their trade-up decision. I just know too much. The sellers of this house were no longer my clients. However, I do not feel willing or able to “forget” what I know about this house and these people.
The house had been on and off the market during the spring. It was listed with a Realtor. I kept an eye on it, since I think it’s a nice house.
The buyers: I had clients at this time who were looking in the same town. They weren’t in the asking price range of this house when it first came on the market. When the price approached their range, I suggested this house. I knew I could be asking for trouble, but my job is to show them all relevant property.
The policy and why: My policy is that I will show any home, but if one of my clients wants to make an Offer on a property owned by one of my clients (or former clients), I will bow out of the transaction and refer my clients to another agent I trust. This time it was to Sam (We don’t work in the same company.) Once the buyers decided to buy, Sam took over and I did not discuss the transaction with either buyer, seller, or agent.
Few agents would have referred out instead of working with a buyer who is purchasing a former client’s home. Some would even sell the familiarity as a benefit: “I know this house!” to the buyer and “I brought you a buyer!” to the seller. The vast majority of agents work as both buyer’s and seller’s agents. Some are comfortable working as dual agents (for both parties) in the same transaction. Many agents work as designated agents, which allows for a seller to be represented by one agent while the buyer is represented by another agent in the same company.
I know that my buyers hated being referred out at the point of Offer. But Sam did the job and they closed happily. I didn’t get to finish working with these buyers, which I regret. Maintaining my business model and my client’s trust has cost me a total of three sales in eighteen years, but I believe that it has also maintained my client’s trust.
Did you buy or sell with agents who were too close for comfort? Is my model way overboard?
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