2 responses to “Fourth Parties are agents. Third Parties aren’t necessarily.”

  1. Tom Wilson

    Joe’s correct about the transformational or symmetrical nature of 1st and 2nd parties – in other words, which is which is a matter of perspective. Third parties are defined as independent entities, but should be assumed to be aligned more closely – though not exclusively – with either the 1st or 2nd party. A good example is real estate transactions.

    The Seller and Buyer are interchangeably 1st and/or 2nd parties. The Listing Agent is a 3rd party, and is clearly aligned with the Seller. The Showing Agent, who is incented by actually selling a property and receiving a commission share, is also a 3rd party – but is actually more aligned with the Seller than the Buyer, even though they are ostensibly representing the Buyer’s interests. Hence the recent development of the strict Buyer’s Agent – someone who is compensated on retainer solely by the Buyer, and has no vested interest in the outcome of a sale or purchase other than the Buyer’s satisfaction. Does that make them a 4th party? A 5th party? It seems like unnecessary distinctions which fall prey to situational alignments.

    In contract law, 1st and 2nd parties – regardless of which side of the equation they sit on – are clearly delineated at the top of the agreement. By definition and fiat, any other interested party is a “3rd party”, with the understanding that they may align on either side of the agreement or transaction. The notion of “disinterested 3rd party” is naive and seldom true, and one should always expect that any 3rd party is, however slight it may be, aligned more closely with either 1st or 2nd parties. Understanding the leanings of any given 3rd party is important. Distinguishing them as “4th party” or “nth party” only serves to complicate and set expectations which may prove later to be incorrect.

  2. RealEstateCafe

    Tom, if you’re able to access my email from this post, I’d like to talk about your comment and my understanding of buyer agency.
    Bill Wendel

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