Agency Debate / Consulting Solution I've been down this road before on this forum with the inevitable and appreciated pro and con reactions. The two essays which I heartily recommend to all, gives me another chance to put my two cents in the pot. I agree with most of what Doug Kaplan has to say and I appreciate his passion in the matter. I especially agree with the statement that in essence says that as long as brokers/salespeople are paid as a result of completing the transaction they are an interested party and as such cannot render true fiduciary duty to either party. As this statement, left as it is, is what got me into trouble last time, let me hasten to add that I also agree with Mr. Bass who feels (again if I may paraphrase) that such a statement insults all the honest and ethical agents who can and do put their clients' interests above their own. But as I turn this over and over in my mind, I keep coming back to several, IMHO, inescapable conclusions. 1) What good do all the definitions (of agency) do if buyers and sellers don't understand any of it, and many agents ignore it. + 1 for Mr. Kaplan. 2) It IS against human nature for people to work against their own financial interests. That many agents, attorneys and other professionals do it, that is work against their own financial interests in favor of the client's interest, is a credit to the person, not the profession they represent nor the laws and codes of ethics under which they operate. + 1 each for Mr Kaplan and Mr. Bass. I would point out that all professional service relationships have a potential to be abused, i.e., recommending more services than are necessary, prolonging negotiations, making documents needlessly complicated or lenghthy, etc. In most of these relationships, which follow a consultant model, the professional at least gets paid something for the services rendered. To state the obvious, under the current real estate commission model, the agent gets nothing if the transaction doesn't happen, in spite of time spent and services rendered. The point: No model will truly eliminate unethical behavior. Minimizing temptation by creating something more rational might at least help. 3. Transactional Brokerage per se does not, in my opinion, solve the problem. It does not take the agent out of the potential conflict of getting paid when, as and if the transaction is complete and it will provide fewer services to the consumer. -1 for Mr Kaplan. + 1 for Mr. Bass. 4. Now I must report my own conflict of interest. As an instructor and a consumer I would love to see the Federal governmnent step in and do something to standardize agency definitions and models in all states. (Mr. Kaplan's suggestion for transactional brokerage). I could write one agency course and take it on the road and get to know every Holiday Inn in America. However,as a unrepentent Jeffersonian (the best governmnet is the least government) particularly, IMHO, at the Federal level, I don't want Washington involved in defining agency relationships and dictating agency models. On the other hand I must say that the Feds have not done a particularly bad job of creating and regulating appraisal licenses. Given the increasing level of interstate commerce via the internet some Federal regulation may be inevitable. Unfortunately I think it will be simply??? to require more and more disclosure on the part of agents and brokers. No points for anyone on this. 5. Finally, (there is an end folks) I strongly disagree with Mr. Kaplan that a fee for services model is not and never will be accepted by the industry. By his own admission, such a model would remove the broker from having an interest in the transaction because he/she would have already been paid for specific services. Such models already exist and are being used by some brokers. The National Association of Real Estate Consultants has been founded to promote and train brokers and agents to use this model. As buyers and sellers become more sophisticated and have access to more information, the consultant model allows them to do some of the tasks of buying or selling themselves. If we are to serve the public's interest, we should, like all professionals, find out what they want and need and sell it to them at a reasonable price. Not give those services away and hope we get paid when the deal is done. And we should not attempt to define our way out of liability. Liability should be minimized by providing competent, professional services above and beyond what is minimally necessary to earn our fee. +10 points for me (I couldn't resist). Submitted by: John Yoegel, Ph.D, C-CREC