I just came upon some awesome historical presentations about how flawed the designated agency legislation was when it was proposed and passed in the late 1990’s.  These come from a not-for-profit consumer organization that is no longer in existence but shows just how convoluted this legislation was then and still is today.  The organization was known as Real Estate Agents for Real Agency.  It consisted of both buyer and seller agents who were concerned about how large real estate companies in Massachusetts were able to dominate the actions of their association and legislators to do their bidding to their benefit.  The legislation that passed still benefits only large real estate companies in Massachusetts and continues to harm small real estate companies as well as real estate consumers.  I will continue to post numerous articles and postings from their original website as these issues brought up nearly twenty years ago are still at the heart of the problems consumers are facing today.  This is part Four of Nine.  Tom Wemett


In response to similar legislative attempts in 1997, Deirdre Cummings, Consumer Program Director of MASSPIRG, testified before a Massachusetts Joint Legislative Committee as follows:

TO: Chairman Michael Morrissey, Chairman Daniel Bosley
Members of the Joint Committee on Government Regulations
FROM: Deirdre Cummings, Consumer Program Director
DATE: April 2, 1997

Testimony in Opposition to “An Act Clarifying the Duties of Real Estate Brokers” H.2465

Good Morning. My name is Deirdre Cummings and I am MASSPIRG’s Consumer Program Director. MASSPIRG is a non-profit, non-partisan consumer watchdog organization with over 50,000 members across the state.

I would like to thank the Chairmen and members of the Committee for the opportunity to testify before you today. I am here to testify in opposition to H. 2465, An Act Clarifying the Duties of Real Estate Brokers.

For most consumers, buying a home is their single largest purchase in a lifetime. Buying a home not only means a 30 year financial commitment to many, but consumers rely on their homes to keep themselves and their families sheltered.

Because so many consumers rely on the soundness of their financial purchase, and because of the large sums of money involved in the purchase and sale of a home, every step should be taken to protect both the sellers and buyers of homes.

The bill being heard today, H. 2465, does the exact opposite for consumers in the state. The bill would weaken current consumer protections afforded to consumers in both the sale and purchase of a home. In addition, the bill would make an already complicated real estate transaction even more confusing.

The major thrust of H. 2465 is to allow for “designated dual agency” in the sale and purchase of a home. Designated dual agency would allow for a buyer’s agent and a seller’s agent to work for the same firm, even in the same office. However, the term buyer’s agent or seller’s agent would be misleading and imply that you are getting an agent to advocate for your best interest. Unfortunately, if this bill passes, the consumer would no longer have a true exclusive advocate, (as the name suggests), to negotiate on their behalf.

For the same reason we would not want law firms representing clients on both sides of a case, consumers do not want real estate firms doing the same. There is a clear conflict of interest and great potential for confidentiality breaches for a firm to represent both the seller and a buyer. For example, the buyers and sellers bargaining power would be compromised if personal information was shared between the two “competing” brokers. The type of information could include the buyer’s agent learning that the seller had to move in 3 weeks, or that they had a large loan payment due at the end of the month which could only be met upon the sale of the house, or that the seller had already turned down 15 offers. On the buyer’s side, information about how much money s/he has the potential to spend and how much he wants to spend could weaken his bargaining power if shared with the seller’s agent.

This bill is simply designed to allow large real estate firms to cash in on-consumers increasing demand for “buyer” agents. Under the designated dual agency scenario both the buyers and sellers will get compromised advocates and the real estate firm will get the full commission!

I urge you to give this bill an unfavorable report.

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