MaryP24 (Pennsylvania)
Posts: 68
Posts: 68
Posted:
What are your experiences by designating a Preferred Real Estate Agent? What are the pro and cons?
Thank you!
Thank you!
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Preferred Real Estate Agent
Started by MaryP24 • 25 replies • 502 views
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MelissaP1 (Alabama)
Posts: 13,836
Posts: 13,836
Posted:
Why? That isn't the purpose of a Realtor. There are different types of Realtors. There are also what is called "Buyer's agents". Which work for the buyer not the seller. They can be BOTH. Some states did or may have rules about if they are allowed in your state.
Not a good idea to have an exclusive source. It makes it look like the old "buddy" system.
Not a good idea to have an exclusive source. It makes it look like the old "buddy" system.
Former HOA President
HenryS7 (Pennsylvania)
Posts: 336
Posts: 336
Posted:
In my community, we had a "designated" real estate agent in our community. This agent used to be on the Board, and used Board resources to advertise herself as a the designated real estate agent of the community. She featured herself in the ads on the association website, she prominently placed her signs on association owned property, and she had her team talk at annual meetings on the state of the real estate industry.
While I am sure that this person did a lot of good for the community, she spent a lot of Board resources in advertising her business.
I have made as one of my platforms a desire to remove her as the designated real estate agent for our community. I would like to see a variety of real estate agents sell homes in our neighborhood, not just this one person. Based on latest sales trends, my mission is a success.
While I am sure that this person did a lot of good for the community, she spent a lot of Board resources in advertising her business.
I have made as one of my platforms a desire to remove her as the designated real estate agent for our community. I would like to see a variety of real estate agents sell homes in our neighborhood, not just this one person. Based on latest sales trends, my mission is a success.
CathyA3 (Ohio)
Posts: 6,299
Posts: 6,299
Posted:
Personal opinion: it's none of the association's business which realtor a buyer uses or doesn't use.
A realtor's client is the buyer, not the association. This can create conflict of interest issues.
By designating a realtor as "preferred", the association is essentially vouching for the person and is taking on liability if the realtor fails to perform as the client expects. The association's insurer may be interested to hear about this.
This is a Bad Idea.
A realtor's client is the buyer, not the association. This can create conflict of interest issues.
By designating a realtor as "preferred", the association is essentially vouching for the person and is taking on liability if the realtor fails to perform as the client expects. The association's insurer may be interested to hear about this.
This is a Bad Idea.
HenryS7 (Pennsylvania)
Posts: 336
Posts: 336
Posted:
Quote:
Posted By CathyA3 on 02/08/2022 7:42 AM
Personal opinion: it's none of the association's business which realtor a buyer uses or doesn't use.
A realtor's client is the buyer, not the association. This can create conflict of interest issues.
By designating a realtor as "preferred", the association is essentially vouching for the person and is taking on liability if the realtor fails to perform as the client expects. The association's insurer may be interested to hear about this.
This is a Bad Idea.
Personal opinion: it's none of the association's business which realtor a buyer uses or doesn't use.
A realtor's client is the buyer, not the association. This can create conflict of interest issues.
By designating a realtor as "preferred", the association is essentially vouching for the person and is taking on liability if the realtor fails to perform as the client expects. The association's insurer may be interested to hear about this.
This is a Bad Idea.
I don't disagree, but I honestly don't think that HOA Boards really want to designate real estate agents. Likely, the OP is a real estate agent who wants to become the designated real estate agent by an HOA to get more business.
Being on a Board, I really see no need to point homeowners in the direction of a particular agent, because we have a ton of agents in our neighborhood that want the listings and are hunting down potential clients. Even if our purpose was to advertise services to homeowners, which it is not, I wouldn't bother with real estate agents because we have like 5 or 10 that constantly advertise in our neighborhood and there is no shortage of agents that serve our community.
AugustinD
Posts: 3,698
Posts: 3,698
Posted:
Quote:
Posted By CathyA3 on 02/08/2022 7:42 AM
Personal opinion: it's none of the association's business which realtor a buyer uses or doesn't use.
A realtor's client is the buyer, not the association. This can create conflict of interest issues.
By designating a realtor as "preferred", the association is essentially vouching for the person and is taking on liability if the realtor fails to perform as the client expects. The association's insurer may be interested to hear about this.
Personal opinion: it's none of the association's business which realtor a buyer uses or doesn't use.
A realtor's client is the buyer, not the association. This can create conflict of interest issues.
By designating a realtor as "preferred", the association is essentially vouching for the person and is taking on liability if the realtor fails to perform as the client expects. The association's insurer may be interested to hear about this.
I'd add: To advocate for any vendor, including a realtor, is not a part of the mission of a HOA/COA.
JohnC46 (South Carolina)
Posts: 14,265
Posts: 14,265
Posted:
Quote:
Posted By CathyA3 on 02/08/2022 7:42 AM
Personal opinion: it's none of the association's business which realtor a buyer uses or doesn't use.
A realtor's client is the buyer, not the association. This can create conflict of interest issues.
By designating a realtor as "preferred", the association is essentially vouching for the person and is taking on liability if the realtor fails to perform as the client expects. The association's insurer may be interested to hear about this.
This is a Bad Idea.
Personal opinion: it's none of the association's business which realtor a buyer uses or doesn't use.
A realtor's client is the buyer, not the association. This can create conflict of interest issues.
By designating a realtor as "preferred", the association is essentially vouching for the person and is taking on liability if the realtor fails to perform as the client expects. The association's insurer may be interested to hear about this.
This is a Bad Idea.
I agree.
KerryL1 (California)
Posts: 14,550
Posts: 14,550
Posted:
Agree with all. Terrible idea.
BobD4 (up north)
Posts: 1,002
Posts: 1,002
Posted:
Quote:
Posted By MaryP24 What are your experiences by designating a Preferred Real Estate Agent? What are the pro and cons ?
1 - Respectfully, where did this idea originate ?
2 - Aside from triggering "restraints of trade" complaints by other realtors / brokers, how could it have been lawfully enforced at all against prospective sellers ?
3 - How against prospective buyers with Buyer Agency agreements in place ?
TimB4 (Tennessee)
Posts: 21,061
Posts: 21,061
Posted:
The Association shouldn't recommend any company or contractor.
That is not their function and any enforcement comes with perceived issues.
Note: We had a friend recommend a realtor. We met with them, and 4 others, and chose that realtor based on the recommendation. They were adequate. However, I really wanted a good realtor when I sold. That realtor would likely be a good buyers realtor. As a listing agent, they were only adequate. Had the HOA recommend them, I think I would have looked for ways to stick it to the HOA.
That is not their function and any enforcement comes with perceived issues.
Note: We had a friend recommend a realtor. We met with them, and 4 others, and chose that realtor based on the recommendation. They were adequate. However, I really wanted a good realtor when I sold. That realtor would likely be a good buyers realtor. As a listing agent, they were only adequate. Had the HOA recommend them, I think I would have looked for ways to stick it to the HOA.
MaryP24 (Pennsylvania)
Posts: 68
Posts: 68
Posted:
MelissaP1,
Very good points! Thank you!
Very good points! Thank you!
MaryP24 (Pennsylvania)
Posts: 68
Posts: 68
Posted:
CathyA3,
Interesting comments! Could you please elaborate when you mention:?
1) conflict of interest
2) liability issue with the insurer
Interesting comments! Could you please elaborate when you mention:?
1) conflict of interest
2) liability issue with the insurer
MaryP24 (Pennsylvania)
Posts: 68
Posts: 68
Posted:
AugustineD,
Thank you for your input!
Thank you for your input!
MaryP24 (Pennsylvania)
Posts: 68
Posts: 68
Posted:
TimB4,
Insightful information! Thank you!
Insightful information! Thank you!
MaryP24 (Pennsylvania)
Posts: 68
Posts: 68
Posted:
BobD4,
Thank you for asking these questions and your input!
1) The idea of a Preferred Real Estate Agent put forward by a Board member as an additional income for the HOA. Whoever this Agent may be would be inclined to share the commission at 3% to 2%. Let's say the agent chooses the 2%, 0.5% would go to the seller as a rebate for choosing the Preferred Agent and 0.5% would go to the Association.
.
Thank you for asking these questions and your input!
1) The idea of a Preferred Real Estate Agent put forward by a Board member as an additional income for the HOA. Whoever this Agent may be would be inclined to share the commission at 3% to 2%. Let's say the agent chooses the 2%, 0.5% would go to the seller as a rebate for choosing the Preferred Agent and 0.5% would go to the Association.
.
JohnT38 (South Carolina)
Posts: 1,631
Posts: 1,631
Posted:
Quote:
Posted By MaryP24 on 02/08/2022 2:48 PM
BobD4,
Thank you for asking these questions and your input!
1) The idea of a Preferred Real Estate Agent put forward by a Board member as an additional income for the HOA. Whoever this Agent may be would be inclined to share the commission at 3% to 2%. Let's say the agent chooses the 2%, 0.5% would go to the seller as a rebate for choosing the Preferred Agent and 0.5% would go to the Association.
.
BobD4,
Thank you for asking these questions and your input!
1) The idea of a Preferred Real Estate Agent put forward by a Board member as an additional income for the HOA. Whoever this Agent may be would be inclined to share the commission at 3% to 2%. Let's say the agent chooses the 2%, 0.5% would go to the seller as a rebate for choosing the Preferred Agent and 0.5% would go to the Association.
.
Sounds like a kick-back to me.
KerryL1 (California)
Posts: 14,550
Posts: 14,550
Posted:
Sounds even worse now!
MaryP24 (Pennsylvania)
Posts: 68
Posts: 68
Posted:
I would like to thank you each of you for your insightful comments coming from your many years of experience!
You reinforced my reservations on the subject! I have recently been involved in the Finance committee of our HOA. My prior years as volunteer in various positions at non-profit organizations came handy to me at this position to some extent.
I agree with all of you that the Board by designating an exclusive realtor:
1) violates the rights of the owners to select who will market their property for their best interest, 2) our Bylaws do not make any reference to such power,
3) it could get us in lawsuit by other Real Estate Agents,
4) who knows what other ramifications this action may bring.
I am very happy that I have joyed this community group of people with knowledge, and good judgment!
You reinforced my reservations on the subject! I have recently been involved in the Finance committee of our HOA. My prior years as volunteer in various positions at non-profit organizations came handy to me at this position to some extent.
I agree with all of you that the Board by designating an exclusive realtor:
1) violates the rights of the owners to select who will market their property for their best interest, 2) our Bylaws do not make any reference to such power,
3) it could get us in lawsuit by other Real Estate Agents,
4) who knows what other ramifications this action may bring.
I am very happy that I have joyed this community group of people with knowledge, and good judgment!
MaryP24 (Pennsylvania)
Posts: 68
Posts: 68
Posted:
JohnT38,
Yes, it does!
Thank you!
Yes, it does!
Thank you!
MaryP24 (Pennsylvania)
Posts: 68
Posts: 68
Posted:
KerryL1,
I fully agree with you that it is not a feasible idea to generate income for the Association!
Thank you!
I fully agree with you that it is not a feasible idea to generate income for the Association!
Thank you!
MelissaP1 (Alabama)
Posts: 13,836
Posts: 13,836
Posted:
A HOA is only funded by its dues. Any other ways is subjected to taxation. Even a "Garage sale" to raise money is a no-no.
Have to be careful of some Realtors who may want to propose this idea. It sounds like a lazy approach on doing their job. Developers will have exclusive realtors onsite that work for them. That is because for them to do real estate business to sell the property they have to have someone with a real estate license. A HOA owner owned does not. It doesn't sell real estate. That part is already done when someone buys a property within.
Have to be careful of some Realtors who may want to propose this idea. It sounds like a lazy approach on doing their job. Developers will have exclusive realtors onsite that work for them. That is because for them to do real estate business to sell the property they have to have someone with a real estate license. A HOA owner owned does not. It doesn't sell real estate. That part is already done when someone buys a property within.
Former HOA President
CathyA3 (Ohio)
Posts: 6,299
Posts: 6,299
Posted:
Quote:
Posted By MaryP24 on 02/08/2022 3:14 PM
I would like to thank you each of you for your insightful comments coming from your many years of experience!
You reinforced my reservations on the subject! I have recently been involved in the Finance committee of our HOA. My prior years as volunteer in various positions at non-profit organizations came handy to me at this position to some extent.
I agree with all of you that the Board by designating an exclusive realtor:
1) violates the rights of the owners to select who will market their property for their best interest, 2) our Bylaws do not make any reference to such power,
3) it could get us in lawsuit by other Real Estate Agents,
4) who knows what other ramifications this action may bring.
I am very happy that I have joyed this community group of people with knowledge, and good judgment!
I would like to thank you each of you for your insightful comments coming from your many years of experience!
You reinforced my reservations on the subject! I have recently been involved in the Finance committee of our HOA. My prior years as volunteer in various positions at non-profit organizations came handy to me at this position to some extent.
I agree with all of you that the Board by designating an exclusive realtor:
1) violates the rights of the owners to select who will market their property for their best interest, 2) our Bylaws do not make any reference to such power,
3) it could get us in lawsuit by other Real Estate Agents,
4) who knows what other ramifications this action may bring.
I am very happy that I have joyed this community group of people with knowledge, and good judgment!
I think you summed it up very well. Also include the possibility of lawsuits from buyers/sellers if the realtor did not perform according to their expectations. The HOA would appear to be vetting the realtor but without any ability to control the realtor's actions.
In a situation like this, the realtor enjoys all of the benefits while the association takes on the risks. Boards have to act in the best interests of their associations, and it's hard to make a case that this is "best interests". Associations are not in the business of buying and selling homes.
The only time I've encountered something like this was when a realtor was employed as *the seller's agent* by a builder/developer who was acting on his own behalf (not as a fiduciary of the association). It's doubtful whether the buyers benefited at all from this arrangement - presumably the realtor's commission as well as the developer's carrying costs would have been factored into the homes' list prices, among other things.
HenryS7 (Pennsylvania)
Posts: 336
Posts: 336
Posted:
Outside of the technicalities and legalities of the situation, I think that whomever pitched this was dreaming to think that 0.5% commission would be refunded to the HOA. I doubt that any real estate agent would refund that amount in exchange for advertising.
More than likely, they might pay a flat fee of $10,000 or something to the association and consider it part of their advertising budget, but no way would they share commission like that with the HOA.
Dreaming!
More than likely, they might pay a flat fee of $10,000 or something to the association and consider it part of their advertising budget, but no way would they share commission like that with the HOA.
Dreaming!
MaryP24 (Pennsylvania)
Posts: 68
Posts: 68
Posted:
MelissaP1,
Thank you!!
Thank you!!
MaryP24 (Pennsylvania)
Posts: 68
Posts: 68
Posted:
CathyA3,
I appreciate for taking the time to follow up with my request!
I appreciate for taking the time to follow up with my request!
MaryP24 (Pennsylvania)
Posts: 68
Posts: 68
Posted:
HenryS7,
Thank you!
Thank you!
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