Hi folks. I know it’s Sunday and all BUT I’m hoping to make you think a little today. Here’s a scenario for you.
You have a beautiful house on the market that you listed for Mrs. Needersell and you are working as a single agent.
A couple of months into the listing period you get a call off of your sign from Mr. Wantabuy who is very interested in seeing Mrs. Needersell’s house. You make arrangements to meet him over there. Mr. Wantabuy seems like a nice guy and is very interested in your listing so you take him back to your office to have a chat. Mr. Wantabuy has done his homework and already has a pre-approval letter. He wants to make an offer and you decide to work with him as a dual agent. Cha-Ching!!!
You disclose your dual agency to your Seller and end up negotiating a deal that works for both of your “clients”.
Everything is going great. The inspection contingency has been removed and the appraisal came back fine. You are now about 10 days away from closing. Mr. Wantabuy has a full blown loan approval and Mrs. Needersell has decided to pack up and move.
It’s just a matter of days before this transaction closes and everyone is happy. Mrs. Needersell got a fair price for her house and is happy. Mr. Wantabuy is getting the property he wants and is happy. You are close to getting paid and are also happy. You haven’t had a closing in two months and this $15,000 commission will come in real handy.
A few days before closing Mr. Wantabuy calls you. He is upset because his interest rate has gone up slightly and his payment has increased by about $50 a month. It’s not a big deal but he is concerned that if his payment goes any higher he won’t be able to afford the house. So being the good little “dual agent” that you are you call his mortgage broker and ask him to send you over Mr. Wantabuy’s Good Faith Estimate(GFE) for your review.
While reviewing the GFE you notice that the property taxes are off by $100 per month and the insurance is off by $75 per month!!! Holy Crap Batman!!! Mr. Wantabuy’s payment is actually going to be $200 higher than he is expecting NOT $50!
Now having spoken to Mr. Wantabuy, on numerous occasions, you know that he CAN afford the house and has all good intentions of closing on the property. If he is surprised by this higher payment at closing you are very confident that he will close anyway and just figure out how to come up with the extra $200 a month. He really likes the house and the reality is he has been taking care of his own financing. He brought the mortgage broker to the deal and has been dealing with him directly. Mr. Wantabuy has not asked for your advice on financing even though he did just express his concerns about the payment increase.
To complicate matters even further you noticed, while doing your morning MLS research, that a new listing just hit the market that is very similar to Mrs. Needersell’s house but is priced $20,000 less.
So my question to you is……what do you do? Remember, the Seller has already moved out of the house and both parties are ready to close.
Now put your thinking caps on and give me your opinions. I’ll then come back and give you mine. What do you do? And…..think about how your answer would be different if you weren’t a dual agent. Or would it?
OK…while you guys are thinking I’m going back to my picnic with TLW!! Thanks for the image Sarah Cooper!!
EDIT: Dual Agency is illegal in Florida. However, you could certainly apply this scenario to a transaction brokerage relationship where you are representing both parties as a transaction broker. In my opinion, the answer is the same.