Florida's "Transactional Brokerage" Is Something That You Want To Fully Understand Before Buying In Florida

Charles Hanes
January 23, 2012

If you've been reading my blog over the past decades you will know that I'm a recovering high pressure salesman.  In the old days, developers would hire me any time they got in trouble with a condo project as I have the training and ability to literally manipulate you into buying a condo even though you don't want to buy it!  For the record I must inform you that I'm not the only salesperson out there possessing these highly trained skills of psychological persuasion ("manipulation").  The trouble is that we come in all sorts of packages.  I've known and worked with little old matronly ladies that, with this training could "skin a snake"!

Then, back in 1999 I got "clean", "went straight", "changed my ways", when I realized that my ability to slam people into deals carried serious consequences to them.  I decided to become Toronto's first "Buyer's Agent".

I had attended an early morning meet at Marche, a restaurant below BCE Place at Yonge and Adelaide St., in the Financial District, and all the buzz was about this threatening new concept taking hold in America called "Buyer's Agency" and, like a light bulb going off, I knew that buyer agency was exactly the Program that I needed to turn my career back into a profession that I could be proud of.

For over a decade now I've kept clean representing only buyers.  With over 100 deals a year for the past 10 years alone, I have lots of client to swear by my services and want to List their property for sale but I have always felt that doing so would compromise my ability to protect my buyer clients by trending me back toward my old ways of "selling (slamming) people into condos".

Fortunate I came across a young administrator at a condo sales site who expressed interest in becoming a Realtor and who was actually just finishing up her required education to become licensed as a Realtor.  I remember being impressed with this self-confident girl (she was still in her 20's and realizing that I have a son who was the same age, I can get away with calling her a girl although she is every bit of woman), intelligence and aspiration.

I decided to have Linda Wheeler join my real estate team and handle all my client's Listings.  Linda immediately became top producer at the real estate company that she was licensed with.  I did not want Linda working at the same company as I had my license with or we would expose my clients to "dual agency" where, in effect I would be directly involved with the Listing and thus expose myself to reverting back to my old ways anyway.

When you list a property in Toronto you are listing it with the brokerage and not the individual representing the brokerage and under fiduciary law, you hold the legal obligation of "Full Disclosure", "Accounting", "Confidentiality" and to protect ONLY the best interests of your client.  Should you enter into a "Dual Agency" (relationship whereby one agency is representing both seller and buyer) you would owe both parties these fiduciary duties and have to try to protect ONLY the best interests of BOTH PARTIES!

I'm not the most popular Realtor in Toronto with colleagues, specifically because I take my oath to protect ONLY the best interests of my clients very, very seriously!  I'm a big hit with my clients, as the references on my Linkedin and/or web site show.  You can't serve two masters in real estate or life and I feel it important that Realtors should get this clear before they ever start representing the best interests of consumers.

In Florida I've learned that they have a rather strange approach to agency called "transactional brokerage" where the Realtor does NOT represent the best interests of either the seller or buyer!  They simply facilitate the transaction.

If you are considering buying a condo, loft, townhouse or detached house as either an investment or as a winter residence, you will want to understand fully how this works.  I personally see it as a detriment to both buyers and sellers as they have no-one representing their best interests just two Realtors trying to make a deal.

My education of this just came from trying to work with a Realtor here in Deerfield Beach in an effort to assist a client from Toronto in finding an investment condo.  We drew up an offer and registered it with the listing Realtor and from there on, all I saw was two Realtors trying to complete the transaction and get their commission.  There was no buying strategy!  There was no game being played!  It was totally "Let's make a deal"!

The associate working with my client was ready to tie up the deal on the first sign back and actually had the seller's agent draw up the mortgage that we were having the seller accept but the price was far from what my client and I had strategized!  From my associate's perspective the deal was done at a price $29,000 above what the buyer had offered!

This is NOT the type of representation that you want when you are buying real estate!  You want someone like me who is willing to fight on your behalf to get you the property at the price and on the terms and conditions that you want.  This requires sitting down before ever going out looking at properties and making sure that you (Realtor) and the client (Buyer) are on the same page and know what you are doing and what you are after.

In Florida  you can instruct the Realtor to represent you as their "Buyer's Agent" and get it in righting that you will receive full fiduciary but you will have to insist on it as, apparently, Florida Realtor's prefer "transactional agency" (why not, they don't represent anyone thus no legal responsibility).

Now I'm planning on getting my Broker's license here in south Florida as soon as my Green Card application is approved and when I do you can count on the same diligent professional services that have made me number one Buyer's Agent in Toronto.  Until that time, I'll continue to seek out local committed, licensed Realtors that meet my demanding standards to work with everyone that Registers with me in search of a Florida property.

I'm Charles Hanes