The Email:
My name is Werner Heidbuechel, and I am a licensed real estate broker in the state of Florida.

With a settlement in place and changes still being worked on, I was very disappointed, not seeing any adjustment or correction yet regarding the representation of buyers and sellers. Therefore, I am asking you if you would support a bill changing Florida Statutes 475.278. Authorized brokerage relationships; presumption of transaction brokerage; required disclosures. 

from: 475.278: (1b) Presumption of transaction brokerage: It shall be presumed that all licensees are operating as transaction brokers unless a single agent or no brokerage relationship is established, in writing, with a customer.

to: Presumption of single agent: It shall be presumed that all licensees are operating as single agents unless a transaction brokerage or no brokerage relationship is established, in writing, with a customer. https://m.flsenate.gov/Statutes/475.278. 

Of course I am also asking for the same adjustments in any other state that is setup like or similar to Florida. They may not call it a transaction broker. 

Florida: Very important! Keep in mind that the law that required a transaction broker notice to be provided expired on July 1, 2008.

In Florida, I guess it is expected that buyers and sellers are not only familiar with the type of representation available under Stat. 475.278 but also know what the differences are. 

Do you truly believe they do? Do you truly believe that buyers and sellers are familiar with Florida Statutes 475.278, paragraph 2(f)?

(2) TRANSACTION BROKER RELATIONSHIP.— A transaction broker provides a limited form of representation to a buyer, a seller, or both in a real estate transaction but does not represent either in a fiduciary capacity or as a single agent. The duties of the real estate licensee in this limited form of representation include the following:

(f) Limited confidentiality, unless waived in writing by a party. This limited confidentiality will prevent disclosure that the seller will accept a price less than the asking or listed price, that the buyer will pay a price greater than the price submitted in a written offer, of the motivation of any party for selling or buying property, that a seller or buyer will agree to financing terms other than those offered, or of any other information requested by a party to remain confidential;

What it doesn’t say under 475.278 is that the transaction broker relationship allows the brokerages to have both sides of the deal by providing a limited service. The following unconditional duties are being waived: Loyalty, Confidentiality and Obedience.

If the compensation wasn’t the reason why it was set up the way it is right now, what was it? Why isn’t the presumption of representation Singe Agent? If there is a situation where a transaction broker would be a better fit, then just transition, of course, only with the written consent of all parties to a transaction broker relationship.

So why wasn’t a single agent relationship set up in the first place? They, buyers and sellers, are paying the brokerages a lot of money, yet the system is set up, from my point of view, to benefit the brokerage by providing limited service so they can get both sides of the deal. It just doesn’t make sense, does it? How about ethics?

Just allow me to provide you with a quick example. As a listing agent, I offer the seller the following deal: Total commission: 4%, with two percent going to the selling broker. In the event I bring a buyer, the total commission will be reduced to 2.5% instead of the 4%. A buyer walks into the office and would like to see my listing. Knowing about the deal I provided the seller, do you think that there is a chance that the broker will instruct the front desk to give any buyer interested in my listing to agent x, y, or z? Why? Because the brokerage would get its cut from 4% instead of 2.5%. Just one of the benefits when it comes to transaction brokers. How about sharing information related to the price a seller will accept or a buyer is willing to pay? 

Sure, now you can counter and say that is how the lawmaker put it into the law. And you would be right, but I am wondering if the Florida lawmakers, who, at the time, put the bill into law, knew that the bill would benefit the brokers financially. Was it disclosed to the lawmakers that the transaction broker relationship would allow the brokerages to get both sides of the deal by providing just limited service? What do you think? I am eager to find out.

In Florida, it is called transaction broker, and in other states, a similar representation is called dual agency or designated agency. They all have one thing in common. Allowing the brokerages to get both sides of the deal. 

For more information on the definition, how it works, and what it is called in different states, please visit the following website: https://casaplorer.com/dual-agency-legality. 

Wouldn’t it make it so much easier to have nationwide the same representation? 

• Single Agent in the form of a seller or buyer agent as a presumption in all states
• Designated Agency or Transaction Broker or whatever you want to call it as an alternative. 
• No-brokerage relationship.

Now add a mandatory relationship disclosure. Actually, it could be added to the listing agreement and buyer broker agreement(s).

Something that benefits the brokerage, like the way it is set up as of right now with the Florida Transaction Broker Relationship, is, in my opinion, just wrong and should never be a set representation in any state, especially without written disclosure. 

How can we fix or adjust the current system?

• The buyer(s) and seller(s) need to be represented in a fiduciary capacity, meaning by a single agent in the form of a buyer’s agent or seller’s agent. A mandatory relationship disclosure should be required in all states. The presumption of representation in every state needs to be a single agent. Again, setting it up so the brokerages can make the most money is, from my point of view, just wrong, no matter where you live in the US and no matter what you call it to make it possible.
• The best solution, as we all know, would be to allow adding the commission paid to the buyers loan as part of the purchase price. It was part of the mortgage before, just as part of the agreed purchase price. Once the seller and buyer know that they are represented in a fiduciary capacity, like a single agent, they can just focus on the service they require and negotiate the compensation they are willing to pay for such service. A seller should not have to worry if a buyer can pay his or her agent. But at this time they have to, or there is a chance that their home may not be shown. And here we are back by inflating the list price by adding compensation for the buyer’s agent, even not knowing if the buyer actually needs the financial assistant from the selling party. And take a guess who actually most likely will get the compensation added for the buyer if the buyer’s side doesn’t ask for it. Please take a very, very close look at how the listing agreement is written. In a separate email, I will go over it in detail. The minute a listing agent mentions to a seller that their house may not be shown because a buyer may not have the additional funds to compensate their agent, the majority of sellers will just inflate the price by adding buyer’s agent compensation. Being able to list the commission paid to the buyer’s agent on the broker’s website and on their own website gives the agent even more power. The higher the commission, the higher the chances are that their home will be shown first. Like in the past, the brokerages are still in control of the commission. Allowing agents and brokerages to post compensation paid to the selling broker actually makes it even easier using the so-called scare tactics because agents will just show the seller the different website referring to compensation paid.

In a separate email, going out tomorrow, I will address my concern on the new forms as well as the modified existing forms listed below. In my opinion, the forms are written to benefit the brokerages by getting both sides of the deal pretty easy by just providing limited service. Is there actually the opportunity for the brokerage to kind of triple the commission? Take a very close look at Exclusive Right of Sale Listing Agreement Transaction Broker_ERS-20tb (Rev. 08_2024) Paragraph 8 (a), 9 (a, b, c) especially 9 c. Here again, the presumption of transaction broker is a big part of it. I will provide an example in my next email.  

• Exclusive Right of Sale Listing Agreement Transaction Broker_ERS-20tb (Rev. 08_2024)
• Exclusive Buyer Brokerage Agreement, Transaction Broker (EBBA_7tb)
• Exclusive Buyer Brokerage Agreement, Single Agent (EBBA_7sa)
• Exclusive Buyer Brokerage Agreement, No Brokerage Relationship (EBBA_7nr)
• Credit Related to Buyer’s Broker Compensation (CR-6 FF)
• Seller’s Agreement with Respect to Buyer’s Broker Compensation (CR-6 GG)

Maybe because it is a law, there will not be an additional lawsuit in this matter. But how about our reputation as agents, associations, etc. ? This will probably destroy whatever is left if it does not change. Yet you, as the NAR, state associations, and local associations, can make a change. So what is it going to be? Providing buyers and sellers with the best representation (a single agent) by law or protecting the opportunity of getting both sides of the deal by providing limited service.

And don’t forget: Florida: The law that required a transaction broker notice to be provided expired on July 1, 2008.

Please reply with  – received –  so I know you got this message. 

Together we can make a change. What is it going to be?