Florida Real Estate and the 'F' Word
What “F” word??
OK, so I am not talking about the “F” word that is common in the Real Estate TV series. You know the show...It’s called Million Dollar Listing and it is full of hype, drama and untruths.
According to the TV show, it is common for brokers to cuss each other out and then have lunch together to negotiate an extra sweet deal.
Total baloney...that is not what really happens.
The “F” word I am talking about is the most important word in real estate…
it is called “FIDUCIARY”...
Rarely provided, seldom talked about, and mostly avoided.
What is a Fiduciary? The gold standard...
Fiduciary is a relationship of trust. In a Fiduciary relationship, the Florida Real Estate Broker puts the buyer's or seller's best interest above their own wants and needs.
Here are some of the duties of being a fiduciary:
- Full Disclosure
- Client Status
- Ultimate Care
Who offers Buyers Fiduciary duties?
- Sellers/listing agents offer NO fiduciary duties to the home buyer.
- Transaction Brokers offer NO fiduciary duties to anyone.
- Buyers Agent in a listing office: MAYBE offers fiduciary duties...depends.
Exclusive Buyer Agent ALWAYS provides fiduciary duties to the buyer.
Exclusive Buyer Agent works in a Buyer Brokerage Office (that's us!) offers 100% fiduciary duties to the home buyer.
In fact, every agent in the office also provides full fiduciary duties only to the home buyer. No bait and switch and no incentive to sell any particular house.
Most Florida Realtors avoid being a “fiduciary” in order to remove any liability. They prefer not to have the responsibility of taking care of your needs and best interests...
Why? Because it is easier!
No fiduciary duties means that there is less for the broker to do or worry about. That’s just a fact….besides, when an office lists the property and represents the seller they cannot provide fiduciary duties to the home buyer...that is a conflict of interest.
In the 1990’s, Florida Home Buyers did have “Fiduciaries”...but not for long. They also had mandatory Agency Disclosures (when agents had to tell the buyer who they really work for)...that did not last long either.
The reason for the changes is that the large brokerage offices cared more about making double commission rather than not having a conflict of interest with you, so they lobbied to remove the requirements for agency disclosures to make life easier for themselves.
Making matters worse for home buyers, and life easier for Florida Real Estate Brokers, the State of Florida has turned away from requiring “Fiduciary Duties” from Brokers.
In fact they even removed the duty to disclose to the consumers who the broker really works for or what duties they provide!!
Today, every agent in Florida begins as a “Transaction Broker” ...a middle person that only facilitates the transaction with NO FIDUCIARY DUTIES.
3. No full disclosure
Unless you have a written single agency agreement for Exclusive Buyer Representation, with a Buyer Brokerage Office, you have to watch out for yourself because you will not be represented like you think.
Since Florida “Transaction Brokers” dominate the relationships between Home Buyer and Broker, let me start with a clarification of what exactly that is.
What is a “Transaction Broker”?
Transaction Broker is a facilitator/middle person who offers:
If you think that does not matter, think again…try this:
Pretend that you are the home buyer:
The “Transaction Broker'' you are working with also has a listing that they are eager to sell. The Broker tells you what a great buy that property is...you believe them and buy the brokers listed property.
Then you find out that they just had a contract fall apart on that same property. You ask “why?” and the broker says that the buyer did not qualify for financing.
Then you find out the truth...that the property has polybutylene plumbing.
The Broker pretends that they do not know that. Actually, they did know and that is why the deal fell apart.
Insurance companies do not want to insure poly plumbing and the seller did not want to spend the money to replace it.
To add insult to the “no loyalty”, “no disclosure” part, you learn that the previous contract was for less money than you paid...and you thought that you were actually represented.
The reason you paid more is because the Broker told the seller how much you LOVED the house, and that was your favorite house...so much for the “NO confidentiality” part…
The broker repeated almost everything you said...to the seller.
So now, you decide that you do not want to buy the property…the “Transaction Broker” is not happy...after all you just cost the broker their double commission. Broker repeats how wonderful that property is and tells you to think about it over the weekend…
Broker fails to remind you that contractually, your inspection period is over in 2 days...ends on Friday After that date, you are not entitled to get a refund of your escrow deposit money... Is this the kind of “fake” representation you need?
Let me jump back in here and tell you that I have taught “agency” classes and that is exactly what happens. Also, I hear from brokers who post their opinions on various real estate forums…sometimes what they admit is shocking!
What is even worse is that we hear stories like this from home buyers...who call us for help after it's too late to hire us…we recommend they hire an attorney.
Most Brokers think that if a buyer does not read or understand the contract, that is just “too bad” for them.
I am an Exclusive Buyer Broker with 30+ years experience who knows that it is very rare that any of my buyer clients actually read the entire contract.
It is even more rare that my buyers understand the terms of what they signed.
My buyers are lucky that I work solely for them...
Which is why I read everything the buyer has to sign...even the 100+ page contracts for new construction. I then highlight all that is negative to the home buyer because as a true Exclusive Buyer Agent, that is my job.
And on occasion, I even explain the contract to the builder’s agent because most do not know what their own contract really says…
If you are truly being represented, it is also up to the broker to keep tabs on your timelines, so that you do not miss any deadlines, or accidentally breach the contract…and lose some of your hard earned money.
A True Exclusive Buyer Broker offers full 100% fiduciary duties…
- They actively promote your position
- They give you sound advice
- They evaluate the property value
- They research what others don’t do or can’t
- They avoid buyer pitfalls or money pits
- They recommend auxiliary services (without accepting a kickback)
- They never “flip out” if you decide to not buy the property.
If “FIDUCIARY’ sounds good to you, stop spinning your wheels...call us.
Buyers Broker of Florida is a straight talk, Exclusive Buyer Brokerage office that offers 100% Fiduciary Duties to all Home Buyers. We don’t play both sides of the fence. Call us 727-202-9130.