From: Jay Reifert [true-agents@true-agent.com] Sent: Sunday, February 10, 2002 1:42 PM To: Oppose the WRA--Defeat Designated Agency Cc: Attorney General James Doyle (Re: Anti-Trust); FTC Anti-Trust Division; William A. Black; Assistant Attorney General Subject: Designated Agency Update--Debunking the WRA's Deception [Remember...what used to be the header of this message, has been shifted to the message footer.] ---------------------------------------------------------------------- List Removal Instructions: Reply to this Message With "Remove" in the Subject Line or Body of the Message. Governmental Officials and Their Respective Staffs Will Not Be Removed From This List. ---------------------------------------------------------------------- Designated Agency Update--Debunking the WRA's Deception ---------------------------------------------------------------------- This will be the last of the long emails. Unfortunately, due to the ongoing deceptions of the WRA, responding to all of the misleading points that they are making requires a considerable use of words for an adequate rebuttal. What follows, are the pertinent portions of the text of the WRA's "Designated Agency Update" released on February 4, 2002. Only the portions which are misleading will be in this message, but you can view a full version of their piece to establish greater context, by going to: http://www.true-agent.com/More_WRA_Deception_on_Designated_Agency.pdf ----------------------------------------------------------------------- > "Staff, Rick -VP Legal Services" wrote: > > MEMORANDUM > > Subject: Designated Agency Update > > Designated Agency Questions & Answers > > The Wisconsin REALTORS® Association's Designated Agency proposal was > developed at the request of WRA members... What this should have said was, "at the request of WRA large brokerage house members...", as the proposed legislation is definitely not beneficial to the WRA's small brokerage house members. > by the WRA's License Law Committee, reviewed by the WRA's Legislative > Committee Entities to which Mr. Reifert, with his consumer bias, was denied committee membership. Entities which are also controlled by the WRA's large brokerage house constituencies. > and the WRA membership at focus groups held throughout the state, Are there any small brokerages which received invitations to participate in such focus groups? What was the criteria used to determine where these focus groups would take place? Did they all occur at the offices of large brokerage houses? > approved by the WRA Board of Directors and presented to the REB for > review. That would be the WRA Board which is comprised of an overwhelming majority of large brokerage houses and mega-brokers, constituencies which are not friendly to, or concerned about, the needs of small brokerage houses...which make up a large portion of the WRA's paid membership base. Perhaps even a majority! As for, "presented to the (Real Estate Board) REB for review", at least Mr. Staff did not repeat his earlier misleading statement in another correspondence which said that the REB supports the concept of Designated Agency. > All meetings were open to all WRA members and no person has been > refused the opportunity to attend or comment at any meeting. Hard to be present to voice concerns when no invitation is offered to attend. These WRA "dog and pony" shows were put on for large brokerage houses and mega-brokerage houses via specifically arranged events for them and no meaningful effort was made to include small brokerage houses. (Any small brokerage houses wish to defend the WRA on this point?) Incidentally...the reason why small brokerage houses should be concerned about the WRA's blurring of relationships and the impact that it has on true agency is that the small brokerage house is the one most capable of providing true, agency-level services without the larger risk of having a buyer/seller conflict of interest arise. If you carry less homes, chances are good that you will be showing your clients homes that are controlled by other firms. If you are unlikely to have the listing for the buyer you are representing, then the likelihood of dual agency is greatly reduced...which means less conflicts of interest. > The concept of designated agency offers an alternative for parties > and brokers who choose to avoid the reduction of client services > that otherwise accompanies a dual agency relationship. Untrue. Layering Designated Agency over the top of Wisconsin's (hush-hush) facilitator law means that Designated Agency changes nothing. Consumer clients, who used to have the law on their side to protect their interests, were robbed in 1994 of the right to hold their agents/firms accountable and Designated Agency just furthers the deception. > Designated agency allows the broker and the broker's clients > the option of having the broker designate one or more agents to act > as the agent of the buyer and one or more other agents to act as the > agent of the seller. In reality, "designation" per se, will rarely occur. The licensee who began as a "full-agent" for a party would be the one who automatically transitioned to "designated agent" for the party who was previously represented without conflict. However, many confusing permutations could come out of the ability to designate, driving the shell game further and further into confusing murkiness. Also, remember that the FIRM benefits doubly, by having the ability to exercise influence and a certain amount of control over two parties in the same transaction. (Just as you wouldn't want to have an attorney from the same firm that is suing you representing you in the same suit...you shouldn't want a licensee from the same firm that is representing the other party representing you.) > In a designated agency relationship each agent assigned to represent > a client provides full agency services to the client throughout the > transaction. This benefits the consumer who would otherwise face > reduced services in a dual agency relationship. Not in Wisconsin. In Wisconsin licensees are all statutorily defined as facilitators...mere paper-pushers. Without changes to the underlying laws, there can be no LEGAL representation of a client's best interests. The WRA is engaging in the height of hypocrisy by even beginning to suggest that adding Designated Agency to our current Statutes changes ANYTHING. > Can I still list and sell my own listings? > > Yes, brokers can continue to list properties and sell them. As > before this may occur when one of a broker's agents has the > listing and the listing agent or another of the broker's agents > works with the buyer as a sub-agent. It may also occur when the > company lists the property and has a buyer agency agreement with > the buyer in a traditional dual agency relationship. Designated > agency simply adds a new option for brokers and their clients > without eliminating any prior practices. Or, put another way, you now have one more tool available to make it look like you aren't just a salesperson. Let's see, I can start out looking like an agent--well, at least if agency were an option in Wisconsin--and then I can transition into just about what ever I want, making the "client" think that I'm really doing something different when I'm not. Any relationship would be acceptable to me, if the consumer was given disclosures before accepting ANY level of services from a licensee...even at an open house, making it clear what the different types of "representation" available in Wisconsin were. This is called seeking INFORMED CONSENT. The problem with the WRA and many state associations is that they craft disclosures that hide the truth to protect the business practices of licensees...instead of protecting the consumer. > Do we have to use designated agency? > > No. Designated agency would be optional. Optional for the licensee. Again, as the consumer will be lacking the facts necessary to create their ability to give INFORMED CONSENT, the undisclosed, or underdisclosed implications of Designated Agency will serve to benefit only the licensees in the transaction and, of course, the firm that collects a fee from the buyer side and the seller side. > Do we have to use it in all transactions? > > No. Just like dual agency, the parties in some transactions may > decide that designated agency is a good way to proceed while in > others the parties may prefer to handle the agency relationships > in another way. See the immediately preceding reply and concentrate on the lack of INFORMED CONSENT by the consumer. > What role does the broker/owner play in a transaction with > designated agency? > > The broker/owner would be the one to appoint one agent to be > the designated agent for the seller and one agent to be the > designated agent for the buyer. The broker/owner would owe the > duties owed to a customer to each party - the broker/owner would > treat each party as if they were customers as far as fiduciary > duties. Setting aside the fact that fiduciary duties have no meaning in Wisconsin due to the Agency "Reform" Act of 1994, which turned all Wisconsin licensees into facilitators and was drafted by none other than Rick Staff, the current architect of Wisconsin's deceptive Designated Agency shell game, has anyone given any thought to the fact that the Broker...who is supposed to be supervising the two licensees that he or she designates, will not be able to give any advice to these licensees or their clients that would be contrary to the best interests of either party? (The broker remains a dual agent.) Considering that there are MANY part-time licensees in the business who do not necessarily have the same level of experience/expertise as the ten percent--or so--of licensees who are very experienced, has anyone given any thought to the need to disclose to a client that they have engaged the services of a "rookie" or "part-time" licensee...and no longer have the entire firm's resources to draw upon to watch out for them under the concept of Designated Agency? Designated Agency is a tool to benefit mega-brokerage houses and large office brokerages. It is not a tool to benefit consumers. > Do buyer and seller have to consent to designated agency? > > Absolutely. A client would consent either in the agency agreement > the client signs (listing contract or buyer agency) or in a written > consent to designated agency that can be given later on - the same > as it is now for a consent to dual agency. Consent means nothing unless it is INFORMED CONSENT based upon a full presentation of the facts of all available agency relationships. Further, from the number of clients/prospective clients who come to me, telling me that they have never seen the Wisconsin State-Mandated Disclosure of Real Estate Agency form, let alone be asked for their initials on the form...the likelihood that they will receive--and have explained to them--a copy of the confusing, misleading form that the WRA is likely to produce, is very limited. (The current form is purposely confusing and misleading and hardly ever given to customers.) > Can buyers or sellers refuse dual or designated agency? > > Absolutely. Agency relationships are not automatic. Each consumer > is always free to choose whatever agency relationship is best for > that consumer and transaction. Consumers who feel more comfortable > working with an agent from a different company always have that > option. Again, without adequate disclosure and INFORMED CONSENT...the consumer is not free to choose whatever "agency" relationship they wish...because they are not informed of every available agency option, nor are they given the full details/ramifications of their choices with regards to the incomplete options that are presented to them. What's more, due to the antiquated and EVIL Realtor-abused concept known as Procuring Cause, something else that is rarely explained to consumers, any property seen by the consumer with a licensee who then chooses to refuse designated agency, may not be able to find a buyer's agent to represent him or her, because Procuring Cause could keep the newly retained buyer's agent from being able to get paid...or remain paid. Why? Because Procuring Cause, organized real estate's second biggest dirty little secret, says that the first licensee may be entitled to keep the fee that would have ordinarily flowed to the newly hired buyer's agent in through the transaction! Thus effectively taking away from the buyer the ability to choose a real buyer's agent to watch out for him or her. And, under the vast majority of circumstances, none of this was ever disclosed to the buyer in advance of seeing property with the licensee who wanted to reserve the right to transition into a Designated Agent. Tell me...who benefits from Designated Agency? Who benefits from Procuring Cause? > What do the buyer and seller gain by using designated agency? > > The parties who choose designated agency over dual agency receive > the full services of the agent designated for them. The designated > agent owes all the duties owed to a customer and all of the duties > owed to a client. Doublespeak! In Wisconsin, this means that they gain nothing new, as our Statutes and rules make all agents facilitators...even under Designated Agency. In fact, in what is an absolutely amazing admission even farther down this page, Mr. Staff, the WRA's chief legal counsel admits that Designated Agency is a form of...DUAL AGENCY! Let's see...how can we deceive the consumers of Wisconsin today? Let's give them canned cat food and call it caviar. Then, for good measure, let's add the title of "new and improved". Designated Agency...canned cat food or caviar? > What do a buyer or seller loose by using designated agency? > > Some parties in a few situations may feel more comfortable working > with agents from different companies - an option that is always > open to them. See earlier statement about buyer losing their right to choose another agent...due to procuring cause. Further, what the WRA defines as "a few situations" would be in MOST situations, if full disclosure and informed consent were required. > What happens if the same agent is appointed as the designated agent > for both the buyer and the seller? > > That agent may work for both parties as a traditional dual agent. If > this is not acceptable to the parties, one client and the broker may > amend the consent to designated agency for that client to name a > different designated agent, perhaps a manager or the broker. What??? While there is no doubt that the first half of the sentence above is an invitation to dual agency...naming the manager or broker as the other Designated Agent violates the requirement under Designated Agency that such a party not put the interests of one party ahead of the others. (Oh, what a tangled web we weave...) > Will designated agency eliminate any existing consumer protection? > No, all parties who agree to designated agency will be entitled to > all of the rights afforded under current law. Well...a little bit of full truth. Since Wisconsin is statutorily a faciliator state, where no licensee can function as a true agent without violating the law, the statement above is true. Hypocritical, given the stated purpose of bringing Designated Agency to Wisconsin...but true, nonetheless. > Will designated agency give brokers the opportunity to act > unethically, criminally or to charge double commissions (as one > individual argues)? > No, designated agency is a form of dual agency and to the extent > dual agents would violate their fiduciary duties and take advantage > of one or more clients, the same risk exists in designated agency. That's right everyone, chant along with me: Designated agency is a form of dual agency. Designated agency is a form of dual agency. Designated agency is a form of dual agency. It is a shell game. It is intended to keep the consumer from keeping their eye on the pea. It is smoke and mirrors. At least with dual agency, the LIABILITY ALL ACCRUES TO THE PRACTITIONER AND FIRM! If they want to engage in potentially risky behavior, under dual agency they have duties to the clients that keep them liable to one/both client(s). When you give one firm the ability to purport to represent two parties in the same transaction, and they consent to such an arrangement, their ability to successfully hold the agent accountable--read that SUE--has just been drastically reduced or perhaps even eliminated. The "double-fee" that Mr. Staff refers to is a willful distortion of an earlier comment. When a property is listed, it is at a certain percentage. When placed on the Multiple Listing Service, usually half of the amount of the full fee is offered to whomever brings the buyer. So, that means there is a buyer side fee and a seller side fee. When one company can exercise influence and control over two seperate parties in one transaction, there is both motive and--due to the parties' reduced ability to sue for redress under Designated Agency--opportunity to take advantage of clients in a way that was not previously possible under the more restrictive dual agency. > However, Wisconsin has practiced dual agency and has maintained > confidentiality with customers since 1993 and there is no evidence > that Wisconsin licensees take advantage of their roles as agents > to act criminally or collect double commissions. Nothing about > designated agency will alter the fact that the real estate industry > does not put their interests ahead of the interests of clients and > customers. Dual agency has been available for practice under the common law of agency--Wisconsin's standard prior to 1994--for hundreds of years. Wisconsin did not invent the concept. As for evidence of wrongdoing, it's hard to gather evidence of wrongdoing when the machine that operates the real estate industry in Wisconsin, the WRA, controls the disclosures that make it out to the real estate consuming public. They only tell consumers what they want them to hear. I can guarantee you that the number of consumers who knew that the Agency "Reform" Act of 1994 had stolen their right to true agency level services is a very small number indeed. What's even more entertaining, is that the premise for making the changes in 1994 were to ensure fairness to all parties. Talk about a "red-herring" issue. The common law of agency, according to the Restatement of the Law, Agency (Second) already makes an agent liable to third parties...read that customers, by requiring them to be fair and honest with such parties. Wisconsin's laws were changed for one reason. The large brokerage houses saw the threat of specialization from companies that would offer exclusive buyer agency and exclusive seller agency as being threats against which they could not compete, without changing the laws to make all licensees the same. That was the reason for the Agency "Reform" Act of 1994 and that was when the WRA robbed every party who would be a client in the State of Wisconsin of the right to have true representation in a transaction. Most of the Agency "Reform" Act of 1994 needs to be repealed, returning Wisconsin to true, common law of agency status. At the same time, true reforms can be made which will spell out what the different forms of brokerage relationships are in the State of Wisconsin. The problem in all states has been one of licensees not disclosing at the first meaningful point of contact what all of the different possible agency relationships are. If this were done, then consumers could make their choices up front, and not be faced with the proposition of keeping a licensee whose status has changed later on, or trying to drop that licensee and find someone who will truly represent him or her...and that is unafraid of the potential consequences of Procuring Cause. Folks, Designated Agency is anti-competitive, anti-consumer...and will do nothing but further harm to the reputations of Realtors and their firms. Lastly, for those of you who would decry my efforts as being self-serving, keep this in mind: My practice is based upon the common law of agency, which mandates that I am to put the interests of my client ahead of all others, including my own. Any other standard is a compromise. While it is true that my business benefits from Wisconsin being a common law of agency state, the difference between my position, and that of the WRA is that what benefits me, also benefits my client...and vice versa. Any other business model is based upon sales over service and that puts the focus on the wrong thing. ------------------------------------------------------------------- Next Up: Establishing REAL-Reform (Real Estate Agency Law-Reform) as the official movement to counter the Wisconsin Realtors Association's attempt to pass their Designated Agency concept into law. On Deck: REAL-Reform exposes the offices of two State legislators for their documented refusal to watch out for the citizens of the State of Wisconsin on this issue...and then retells the heartwarming tale of how Speaker Jensen owes his first political victory to the eleventh hour campaigning of members of the Wisconsin Realtor's Association. (Speaker Jensen is reputed to be the legislator who will introduce/sponsor the Designated Agency legislation.) ------------------------------------------------------------------- Please, contact your legislators to voice your opposition to Designated Agency. You can find out how to contact your legislator to register your oppostion to Designated Agency by going to: http://www.legis.state.wi.us/wamltest/ -------------------------------------------------------------------- Also, PLEASE forward this message to everyone you can and please also print it out--and distribute--to those who you know that don't have email capabilities.] --------------------------------------------------------------------- [This message is going out to thousands of Wisconsin Realtors, almost 500 governmental officials--including all State Legislators and their respective staffs, the Governor of Wisconsin and most candidates for Governor of Wisconsin, the Attorney General of Wisconsin, over 425 Consumer Advocacy Groups and/or individual Consumer Advocates, over 285 Registered Wisconsin Lobbyists and over 190 Media Outlets.] -- Sincerely Yours, Jay Reifert, Broker/Owner*****************Excel-Exclusive Buyer Agency 100% Homebuyer Representation********5136 E. Hilltop Road 100% Of The Time****************************Madison, Wisconsin 53711 South Central Wisconsin's ONLY********(800)928-9379, Toll Free Full-Time Exclusive Buyer Agency Firm.***(608)273-8841, Office Visit http://www.true-agent.com ***********(608)273-8388, Fax Machine or mailto:true-agents@true-agent.com Check out our NEW website, at: http://www.Buy-Madison-Real-Estate.com