Designated Agency -- Magic Mirrors Everywhere
As the Cartoons Above Show, Designated Agency is Where One Firm Exercises Influence, and/or Control, Over Two Opposing Parties in the SAME Transaction...All While Reaping a Doubled-Up Payday. Along with the Procuring Cause Trap , Designated Agency Allows for the Undisclosed Taking of a Home Buyer’s Right to Unconflicted Representation.
On December 28, 2005, Wisconsin became the latest state to fall to the secretive, conflict-ridden, sham law known as Designated Agency, as Governor James Doyle signed the deceptively named "American Dream Consumer Act" into law. The real name should have been, "Let Big Real Estate Companies Write Their Dream Law & We'll Approve it Act".Designated Agency, simply put, is where two licensees from within the SAME FIRM "fully" represent opposing parties with conflicting interests--buyer and seller--in the same transaction.
What Realtors® Don’t Tell CAN Hurt You
Even though the seller wants the highest price at the best possible terms...and the buyer wants the lowest price at the best possible terms...and the firm "representing" them stands to receive a doubled up payday for bringing an, in-house, Designated Agency transaction together, the legislature and the Governor saw this Realtor® created, conflict-ridden, underdisclosing law as being good public policy.
While there are many things about Designated Agency that Realtors® don’t ever want you to know, the biggest secret has to do with your (in)ability to get free of a Designated Agency relationship, once you’ve found out that you weren’t getting all for which you bargained...if you were even lucky enough to be told of the concept, before you inadvertently obligated yourself by looking at property with a licensee.
In short, as the Eagles sang in their classic hit song Hotel California, "You can check out anytime you like, but you can never leave."
Even though the law says you can leave the Designated Agency relationship--at will--you have likely been secretly shackled by an undisclosed Realtor® to Realtor® concept known as Procuring Cause...making it so you still have to use the services of that first licensee, because most other licensees won't help you.
Under Procuring Cause, the party--in this case your former Designated Agent--that caused you to wish to purchase the home, is most likely going to be due the compensation that would have flowed to the buyer’s agent of YOUR choosing, had you not been scammed, through underdisclosure, into accepting Designated Agency in the first place.
You see, while the law says you can transition out of Designated Agency, you won’t likely find any unconflicted buyer’s agent who will step in to represent you, as they can’t get, and stay, paid.
The funds that were available in the transaction--funds that come out of the monies you are paying to buy the home--are already reserved, if you will, for the licensee who sold you on Designated Agency. There is nothing you can do to change that...and nothing the law can do either, as Realtors® have preagreed--in order to become Realtors®--to arbitrate commission disputes.
You see, if another agent would agree to represent you, they would do all of the important work...take on all of the liability...get paid at closing, only to receive notification--after closing--that your former Designated Agent is forcing them to arbitrate, in an effort to take away their fee. An effort in which your former Designated Agent will most likely win.
And, as most licensees will refuse to take a chance on losing a Procuring Cause case, you have, as a result, lost your right to unconflicted representation.
All of this, though, merely scratches the surface of the issues that come with Procuring Cause and Designated Agency.
To learn more about the theft of buyer rights that comes with Procuring Cause, [Click Here] .
To learn more, in general, about the deficiencies of Designated Agency, [Click Here] . (Note: The deficiencies of Designated Agency are very similar, if not identical, from state to state.)
For a live-action, easily understood, diagram of how Designated Agency works, [Click Here] .
And...finally, if your computer has working speakers, you can listen to some of the more problematic aspects of Designated Agency by [Clicking Here] . Keep in mind that this is a large enough file that it may take some time to load/play. (You may find it to quicker to open your media player to directly input the web address of: http://www.madison-real-estate-house.com/audio/buyer_advocate.mp3.)
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