Designated Agency Legislation Terribly Flawed – Part Three

I just came upon some awesome historical presentations about how flawed the designated agency legislation was when it was proposed and passed in the late 1990’s.  These come from a not-for-profit consumer organization that is no longer in existence but shows just how convoluted this legislation was then and still is today.  The organization was known as Real Estate Agents for Real Agency.  It consisted of both buyer and seller agents who were concerned about how large real estate companies in Massachusetts were able to dominate the actions of their association and legislators to do their bidding to their benefit.  The legislation that passed still benefits only large real estate companies in Massachusetts and continues to harm small real estate companies as well as real estate consumers.  I will continue to post numerous articles and postings from their original website as these issues brought up nearly twenty years ago are still at the heart of the problems consumers are facing today.  This is part Three of Nine.  Tom Wemett


“Designated Agency” is Particularly Dangerous for Consumers according to Ralph Nader:

“‘Designated agency’ is particularly dangerous for consumers because licensees largely learn their profession through on-the-job training provided by the broker, rather than through classroom education. Although real estate licensees are dealing with houses, which are the largest financial investment for most American consumers, the classroom education requirements are much lower for a real estate licensee than for a hairdresser (30 hours versus 1,500 hours).” – Ralph Nader

Designated Dual Agency Reduces Advocacy for the Real Estate Consumer

“The proposed law would further erode any allegiance that real estate agents must pledge to either the buyer or the seller of a home. NAR’s legislative cronies have systematically weakened real estate consumer protections throughout the country to minimize the industry’s liability to the consumer.” – Ralph Nader

Designated Dual Agency Permits Undisclosed Conflicts of Interest

Designated dual agency”would effectively permit licensed real estate agents to enter into relationships with buyers and sellers during the same transaction – a conflict of interest.” – Ralph Nader

Designated Dual Agency Limits Consumers’ Access to Fair Representation Ensuring Megabrokers’ Profits

“The bill would limit consumers’ access to fair representation in real estate transactions while ensuring that megabrokers maintain their profits. “Designated agency” enables one real estate firm to simultaneously “represent” both sides of a real estate transaction – ensuring the largest possible commission for the firm.” – Ralph Nader

Designated Dual Agency Is Analogous to One Law Firm “Representing” Both the Defendant and the Plaintiff

“It’s analogous to one law firm “representing” both the defendant and the plaintiff. Under “designated agency,” both the buyer and the seller may be “represented” by a different licensed person, within the same firm, although that “representation” will be significantly reduced.” – Ralph Nader

“Neither licensee would be adequately overseen by his or her supervisor (the broker and often the owner of the firm), as occurs in the majority of transactions where different firms are used. Licensees are required to be supervised by the broker, who must pass more stringent requirements to practice.” – Ralph Nader

Ralph Nader made these comments on June 23, 1999 after the passage of Designated Dual Agency in Connecticut (H.B. 6981) at the 11th hour hidden in another Bill (H.B. 6954). Nader also made note of the opposition in MA on H#2465 in 1997. “The opposition of numerous consumer groups and others supporting the rights of property buyers defeated the real estate industry’s effort to push a similar bill through the Massachusetts legislature.’ See the full text at


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