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Guest real estate column: No longer taking commission from both sides of a transaction

Original post made on May 10, 2017

Recently, DeLeon Realty announced a new policy that sent shock waves through the traditional real estate world.

Read the full guest column here Web Link posted Thursday, May 4, 2017, 2:37 PM

Comments (7)

Posted by Logique Curieuse
a resident of Crescent Park
on May 10, 2017 at 12:23 am

It's interesting that this same author wrote the following about representing both the buyer and seller in a previous opinion piece:

"Although the practice is completely legal and widely accepted in California, it seems impossible for one real estate agent to zealously represent both the buyer and the seller in the same transaction, even when the situation is properly disclosed."

His assertion could also apply to the managing broker of a real estate company with only one office.

Again, from his earlier opinion piece ... "A good attorney would cringe at the notion of representing both the plaintiff and the defendant on the same case, yet many real estate agents represent both sides without even blinking an eye."

The author is also an attorney. Apparently, his previous logic no longer applies.

I wonder if the author can truly have it both ways: saying something is bad, and then turn around and say the same thing is good. It's interesting the he didn't reference his previously articulated rationale in his current opinion piece. C'est la vie.

Posted by resident
a resident of Charleston Meadows
on May 10, 2017 at 12:00 pm

I am starting to count up the type of adjectives used in these articles.
Shock Waves - seems like a business decision - save shock waves for earth quakes.
Zealously - Cringe.
Is this what they are teaching in journalism school? Every piece in the news has adjectives which are extreme - there must be some reason that a news piece cannot we written in plane language.
Then we have residents who follow up with the world is falling apart comments.
My comment about this particular agency is that the person on TV is like a funeral director who is assisting the family in an end to life transaction.

Posted by Weekly reader
a resident of Charleston Gardens
on May 10, 2017 at 12:26 pm

Is this an ad?

Posted by Oldster
a resident of Old Palo Alto
on May 10, 2017 at 1:58 pm

Any difference in fiduciary service quality from the "1%" minimal service listing agencies? Dual agency with DeLeon now effectively means they'll be paying 1.5% to each side's agent. With those commission rates they'll need more volume to cover their advertising and malpractice insurance costs around here plus the DeLeon free inspections, staging, and lattes. But then, it won't really be paying commissions in it's dual agency deals since it's agents work on salary so maybe this new strategy will work well for them.

But, would anyone want brain surgery or tax accounting advice from the lowest bidder service provider? With housing prices so high here why would any buyers or sellers not want their own agent to put themselves first instead of having dual agency fiduciary duties to both sides of a transaction? (Coldwell Banker got stung in a recent court case for a dual agency fiduciary duty goof.) You get what you pay for especially when there are unexpected complications.

Show of hands: anyone out there list with one of those 1% listing services and have a happy experience with no regrets?

Posted by Sure it's biased
a resident of Community Center
on May 22, 2017 at 3:06 pm

Is this an ad?
It is written by the company's lawyer, to look like news.
Doesn't get more biased than that.

I observe that this company specializes in recruiting and serving Asian cash buyers [portion removed.]

Posted by resident
a resident of Downtown North
on May 22, 2017 at 3:16 pm

@Sure it's biased - Of course this is an ad. The fine print at the bottom says it was written by the "CEO of DeLeon", presumably with zero editorial oversight from the newspaper. If you read the print version of the newspaper, you will see that most of the ads in the newspaper are from real estate companies.

Is it really true that most of their business comes from "Asian cash buyers"? [Portion removed.]

Posted by Saves the sellers $$
a resident of Duveneck/St. Francis
on May 23, 2017 at 11:07 am

Sure this is an "ad" for Deleon Realty, but it saves sellers $$. If you sell a house thru them and the buyer is also represented by them, you pay half the commission that you would pay through most other companies (2.5% vs. 5%). We recently sold our home. The buyer did not have an agent representing them, so another agent from the listing agent's company represented the buyer. So we paid 5% to the two agents (2.5 each, not sure how much of that goes to their corporate umbrella.) Under DeLeon rules, we would have made $60K more on the sale. Of course this gives sellers an incentive to sell to a DeLeon client. In addition, I think that if you buy a house from DeLeon and later sell it through them, they only charge you commission on the amount your house has appreciated (in that scenario, we would have made $100K more). DeLeon also takes care of the upfront costs associated with getting your house ready to sell (staging, etc.)

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