Time to Wake Up on Agency Issues

January 1, 1997

Sadly, fewer and fewer of our members grasp the definition of agency, and the responsibility lies squarely on the shoulders of a decade of ill-advised NATIONAL ASSOCIATION OF REALTORS® leaders.

It's time for a wake-up call at NAR headquarters. When will our leadership stop pandering to the industry heavyweights and admit that non-agency (transaction brokerage in Colorado, for example) is self-serving and self-destructive?

Today's sellers and buyers are increasingly more enlightened and desperately seeking service and representation, something they can't get from a ''non-agent agent.'' (If non-agent agent doesn't sound peculiar to you, you can probably stop reading now.)

If there seem to be more FSBOs these days, there are two major reasons--one obvious and one not so obvious. The obvious reason is technology. John Q. Public has access to information we previously controlled.

The not-so-obvious reason is the endorsement by NAR of the non-agency monster. Non-agency fuels the fire of self-representation. Reasonably intelligent sellers can do a better job for themselves than can a so-called professional acting as a transaction broker or facilitator.

I challenge the NAR leaders to reread the preface to our Code of Ethics. I hope they'll conclude that the philosophical premise of the Code has been vilified by the enactment of bad law that allows non-agency relationships. NAR exists because of REALTORS®. REALTORS® exist because of consumers. The days of the tail (NAR) wagging the dog (the consumer) are over. Wake up!

Here's a better way: Promote single agency, exclusive buyer agency, and exclusive seller agency. Consumers would be better served, and we'd enter the 21st century as legitimate agents. A side benefit is that we could cease droning on about agency and focus our energies on how to better serve the public.

Editor's note:NAR doesn't endorse any particular agency concept but instead leaves it to members to decide the type of relationship they want to set up with buyers and sellers.

In 1993, NAR's Presidential Advisory Group on the Facilitator/Non-Agency Concept recommended that NAR not further develop or promote the non-agency facilitator concept, advising instead that the association promote a legislative framework that states could use to clarify the law of agency as it applies to real estate brokerage.

However, several states have included, in their agency law, provisions that specifically authorize non-agency relationships. For that reason, a Non-Agency Working Group, part of the Professional Standards Committee, was charged last year with ensuring that the NAR Code of Ethics, while promoting ethical conduct, doesn't improperly hamper members in their legal relationships with customers and clients. At the annual convention in November, the working group made its report, and the committee elected not to recommend Code changes.

Andrew F. Donlon is the president of Buyer's Resource Real Estate of Pagosa in Pagosa Springs, Colo.

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