Re: "Duel
agency: Proposal to allow ‘designated agency’
under fire in Wisconsin" (Feb. 11)
Dear Editor:
As the leader of REAL-Reform,
Real Estate Agency Law-Reform, the opposition to
the Wisconsin Realtors Association's bizarre
variation on designated agency—which I believe is
a flawed anti-consumer concept with enough
loopholes for criminals and the
ethically-challenged to abuse Wisconsin home
buyers and sellers--I have to respond to WRA
Attorney Rick Staff's interesting spin.
Staff is the architect of Wisconsin's
designated agency legislation and author of
legislation that I believe turned Wisconsin into a
secret state of facilitators in 1994. He appears
to have claimed that designated agency would apply
only to in-house sale situations which represent a
small percentage of sales.
That may be true in less populated areas, but
in areas like Madison, Milwaukee and larger parts
of the state--places where most of the WRA
directors who are pushing this concept hail
from--the in-house transaction is not a small
percentage of transactions or total revenues.
Yet even if it were, allowing one firm--which
has a doubled interest in a successful transaction
where it controls/influences two parties in that
same transaction--to purport to act against itself
is not right, even if it happens only rarely.
To make matters even more transparent, the
draft of the WRA's proposal, which is about to be
released to the legislative committee, not only
allows the broker to designate licensees to
represent clients with opposing interests, but it
also allows the broker to designate himself or
herself to be one of the designated agents.
While it may be hard for some to see the harm
in letting a broker create the charade of
designated agency in a transaction and remain
neutral, essentially letting the licensees battle
it out without the broker intervening, how can
anyone not see the conflict in letting the broker
be one of the actively designated agents in the
transaction?
Staff said Wisconsin has the strongest duties
to all parties in a transaction of all states. But
whatever rights accrued to non-client parties were
at the expense of clients who were robbed of the
right to true agency and yet continued to pay for
true agency.
Staff said designated agency is backed by some
state regulators and the chairman of the state's
real estate commission. But the chairman is none
other than mega-broker Realtor James Imhoff Jr.,
the person who I believe used Staff to orchestrate
Wisconsin's Agency Reform Act of 1994 and who I
assert has pushed the WRA board to foist
designated agency upon the citizens of
Wisconsin.
The state's real estate commission has seven
members. Three from the general public and four
who happen to be Realtors. How can consumers get
an even break when the real estate commission has
a controlling majority seated from the industry it
supposedly regulates?
Imhoff is wrong in his assertion that most real
estate firms now are large companies.
Take my board, the Realtors Association of
South Central Wisconsin. RASCW has about 560
offices, of which 466 have five or fewer
associates and 367 appear to be sole practitioner
offices. That leaves about 100 offices that could
be considered large, some of which would be
mega-brokerages.
How does that stack up against Imhoff's claim
that most real estate firms are now large
companies? By the way, Imhoff and all twenty-five
of his offices are members of RASCW.
Designated agency would be a boon to large
offices and mega-brokerages that cannot compete
with common law agents, who primarily come from
small firms. Imhoff's chief desire is to institute
a plan that makes all licensees the same, so his
advertising dollars can go farther. That was also
the intent of the Agency Reform Act of 1994.
That's right, this is all about limiting
competition!
The evil of designated agency is that it allows
firms to give lip service to agency while
providing them with loopholes to abuse consumers
and limit competition by taking away from small
firms the ability to differentiate themselves as
common law agents--a practice best suited to the
small firm.
When we no longer can differentiate ourselves
under laws that have existed for hundreds of
years, then we small offices will begin to be
marginalized by the advertising dollars of the
larger firms--just as Imhoff hopes.
Finally, in response to Tom Meyer, managing
broker of another mega-brokerage firm in Madison:
Agency is not about lawyering. Lawyers are but one
kind of agent. Just about anyone who is employed
by another can be an agent and owe agency-level
duties under the common law to his or her
employer. Thus has it ever been and thus it should
continue to be.
While I would wholeheartedly support anyone’s
right to practice as a facilitator, if that's what
he or she wants to do, but I will not allow anyone
to take away my right to practice as an agent,
offering a higher level of service and
responsibility to those for whom I choose to
work.
Only in the world of real estate has the
bastardization of the common law of agency been
allowed. Why do you suppose that is?
Jay Reifert
Organizer/Director
of
Operations
REAL-Reform
Broker/Owner
Excel-Exclusive
Buyer
Agency
Madison, Wisc.
Copyright 2002 Inman News Features