Dual Agency - Listing Agents Representing the Bride and the Mistress?
A buyer posed the question today as to what the drawbacks were when using the seller's agent to save on commission costs when buying. The answer almost always draws opposing views. Mostly depending on which state the representing agent is from.
Dual agency is when a listing agent represents both the buyer and seller in the same real estate transaction. It is legal in CA and must be agreed upon in writing by both parties. In spite of this, it always surprises me that even the most saavy of buyers will not seek out their own buyer representation from someone who has limited to no interest in the seller's side of the transaction. The buyers are enticed into believing they will save so much more more money if the seller will consider their offer above others due to the "lowered commission." Well let's look at this a little deeper.
WHO BENEFITS THE MOST FROM DUAL AGENCY? In my opinion, two parties benefit the most - the seller and the listing agent that will have double-ended the deal, getting paid an additional % than he/she would've otherwise received. Also, a buyer needs to factor in that if the seller needs to buy another house after their sell, who are they most likely to have a continuing relationship with? You guessed it, their agent. Who will then get paid an additional buying side commission from that transaction as well? It would behoove the listing agent to be as cooperative with the sellers as possible throughout the first transaction. The buyer at that point can never be sure as to whether or not they were represented by someone who had their best interests at heart. Not to categorically state that a listing agent can't back pedal and with all sincerity do their best to take an unbias and neutral role post-listing contract, but it can be very tricky as each party pushes the agent to make demands on their behalf. The liability is so great, that many states have discontinued the practice of dual agency altogether.
"Do You Listing Agent, Hereby Swear to Get The Seller As Much Money on the Asking Price of Their Home? I DO.
WHY A BUYER NEEDS EXCLUSIVE REPRESENTATION
Buyers often do not know or fail to remember that the listing agent worked for the seller FIRST. He/she had a contracted pre-established relationship with the seller. They probably know the names and birthdays of their kids. The listing agent has already by deed and action impressed upon the seller how they will get them the most money possible for their home - as they should.
Then here comes you the home buyer. You are now being wooed by the listing agent if you didn't somewhat initiate the "flirtation" to begin with. In this case, the listing agent is someone that is already considered "taken."
I liken the buyer in that particular situation to a mistress. The listing agent is already married to the seller. Someone gets the first fruits, someone gets what's left. Oh it can be very exciting at first when you appear to be getting all of the attention, but once everyone gets what they want, then what? The doubt increases even more, if and when after the close of escrow, the listing agent then becomes the seller's buyer representation.
“Dual agency is a totally inappropriate agency relationship for real estate brokers to create as a matter of general business practice…The disclosures and consents necessary to make a dual agency lawful are so comprehensive and specific that a typical real estate broker cannot undertake them as a matter of routine.” Pg 10 of NAR's "Who Is My Client" A Realtor's Guide To Compliance with the Law of Agency circa 1986
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Bride and Groom photo courtesy of marketing Deluxe for Creative Commons and 3rd wheel photo courtesy of istock
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Andi - What a great analogy! I've heard dual representation called a lot of things but never the bride and the mistress but it's perfect! The listing agent is married to the seller and cheating with the mistress. Classic.
Great analogy. Dual agency is tough, but few sellers really want their agent to be able to sell their house.
Andi - If I were working as an agent I would do quadruple agency if I could. I would be so neutral they'd call me Mr. Switzerland. Of course I would represent each party 25% evenly and equally. My decision making would not be clouded, whatsoever.
Hey- since it is quadruple agency can I bill the seller twice?
Most consumers don't have a clue as to the meaning of the word "representation" in real estate brokerage.
Here in NY, Dual Agency happens when the listing agents sells the home to their buyer client. That agent then can't provide the full range of fiduciary duties to either party. I'm not a fan of that and give my sellers the choice because I feel when a homeowner has full representation from the beginning that is the way it should stay unless my sellers do not care.
Andi, hang on for the ride! This is a hot topic here, I have posted about it before and never ever will again, LOL. And that is all I will say on the subject!
I love how buyers usually think they are "saving" commission charges by using the listing agent. While that can sometimes happen, it is not the norm by any means. In most cases the seller still pays the full commission to the listing agent, who then gets to keep it all rather than offering 50% to the buyer agent.
Good analogy, Andi. Walking that dual agency line can be tough, but it can be done. Everybody needs to know what your responsibility is, and it can work out very nicely. Touchy though. Good stuff!!
Luckily for us in Florida dual agency is illegal. We can however represent both parties in a transaction. We just don't do it in an agency capacity. We are transaction brokers by default. Limitted representation to buyers, sellers or both. It's the best thing since sliced bread.
My opinion is that even working as single agents, real estate agents still work too hard to get the deal closed so they can get paid. I see no place for agency in real estate unless buyers and sellers pay us up front for our representation. Why do you think attorneys ask for retainers?
Lots of good comments. I dont think its always bad to have dual agency. I have done this several times with no problems and often less stress.
Andie I am currently working as a limited consensual dual agent (as it is called in Alabama). The seller has had the listing with me for a while. The buyer signed a buyers agency agreement with me a couple of months ago, knowing that his search would not start until now. He knew of my seller's listing in the beginning but was never interested in the house partly because it wasn't what he was looking for and partly because of the price.
My seller lowered the price. The buyer saw the price reduction on my Facebook page (I never brought it to his attention) and inquired about it. In this case they were both already my clients and a meeting of the minds was able to be achieved. Not once did the discussion of commission ever enter the picture with the buyer. There was never any need and the matter of commission was not a concern of the buyer and had no bearing on his offer or any perceived savings.
Both parties trusted me to be fair in my dealings as the law requires and that's exactly what they got. In the end, is the deal that everyone can live with.
End of story.
Andi, Dual Agency is legal in my State as long as it is disclosed and agreed by all parties. Usually not a problem, if handled correctly.
Andie: Great analogy - the title definitely got my attention.. I have had it work out well - years ago.. but I find the more I go into detail about agency... they want their own representation and why wouldn't they? I step aside when they request their own agent.. it is their right and at the end of the day I amtr ying to sell my client's home... Love the post.
Don't get me started on dual agency. if consumers truly understood the intriciacies, they would never allow us to practice "dual" (or transactional, or whatever it's called in your state). period.
Interesting post.
Dual agency is legal in my state. I stay as neutral as possible in these deals.
It really comes down to just how important is the advice and counsel of most practicing Realtors(do they have anything to offer other than posessing a Lock Box Key?)? And if you believe the Realtors are a valuable part of each transaction, then how isn't a buyer(or seller) getting slighted as they are forced to accept a WATERED DOWN agent who isn't supposed to be giving anyone advice !
Is a neutral agent or one who keeps expounding that they're trying to be "FAIR" to everyone, worth the same Brokerage fee as a assertive ADVOCATE ? Many self-serving agents seem to believe so !
Every state should outlaw DELIBERATE Dual Agency !!!
Great Analogy. I've worked with agents in the past that represented the buyer and the seller, it was not good at all. Why woould an agent engage in a dual agency, I don't know but as the closing coordinator, I initially felt like the person put in the middle to communicate to both sides so the agent didn't have to do it. That quickly stopped and when the agents are now in a dual agency, I only work the for seller.
When I have clients try to read and then sign any dual agency paperwork, they go into seizures. When they ask me to explain it, they see Deer dancing in front of lights. Fair and honest dealing is what it is all about and with that understanding, we all move forward. Good discussion post and thank you
Ha ! Love the analogy Andi ! I have closed a number of deals where I was able to successfully work as a Dual Agent, but I have worked very hard in those cases to stay in neutral but helpful contact with both partioes who both ended up happy with the arrangement. BUT , I knpw for sure it can become extremely dicey when that poor buyer feels like the mistress !!
Ha - neutral. For neither side. So who wants a neutered representative?
As for transactional fairness, well if the bride and and the mistress agree that the relationship is fair, then great. Consenting adults and all. But look out if one suspects the other is getting more out of the relationship. Then there'll be some real representation, the legal kind.
I like to keep it uncomplicated. With undivided loyalty, I represent one side of a transaction at a time.
I give my potential buyer clients on my own listings the option of using an agent they find themselves, an agent I refer them to, a designated agent on my 3-person team other than me, or me.
Of course, if they use me or a member of my team then I can offer the buyer a sweet rebate, which is less likely available from the referral agent or stranger agent.
I don't focus on dual agency or designated agency.
My motto is: When I work with a Seller my job is to get their house the best buyer. When I work with a buyer my job is to get that buyer the best house. Sometimes they happen to coincide. It is not my job to press for that.
The big win is the post-transaction referral because you did such a good job for them. And you don't get that if they think you were more interested in your own pocket than theirs!
Any buyer who contacts me regarding wanting to deal with the lister directly to save commission gets a rapid explanation that the selling agent commission is already going to be collected and paid no matter who the buyer uses (including no one).
Listing for a lower commission if the selling agent is the listing agent is variable rate commission in our MLS. It is a checkbox that shows up in the contract info, and will discourage other selling agents from writing because they know the seller has a built-in incentive to prefer offers from the lister.
The ultimate way to do this is doing an exclusive listing. Just put the "NO MLS" or "NO BROKER CO-OP" rider on your sign and see how many showings you get. You'll learn swiftly the power of the multiple listing service and why your seller is a fool not to put their home there.
Andi, this was the best analogy for dual agency that I've read yet.
Lenn says most consumers don't understand the concept of representation. I would go even further by saying that most agents don't understand it, either. Because, if they did, they would be very loath to even try to practice dual agency, even if disclosed. Well, at least the honest/ethical ones would be. Those who only care about the money would still do it without a shred of remorse.
Dual Agency isn't a problem unless the agent is an idiot. Back in the day when all the agents represented the seller that was a problem. Leading buyers to slaughter was the national pastime when it came to real estate agents.
When we were finally able to offset the board policies and have buyer agency and dual agency did buyers start to get a chance at a fair shake, even though the law and NAR declared we were supposed to treat both parties fairly.
I have no problems with dual agency, my sellers have no problem with dual agency, and my buyers have no problems with dual agency, only ivory tower agents have trouble with dual agency. There was a hot young lawyer in the S.F. Bay Area that thought he would make a killing going after cases where only one broker was involved in the transaction. He soon found out there were really very few problems and his big payday didn't exist so he gave it up, no money there for him because sellers and buyers were not upset with the situation.
States that gave up dual agency and legalized transaction broker status just gave dual agency a new name and removed legal liability hassles from the picture.
And I for one am not going to pass a qualified buyer to another brokerage because he is interested in one of my listings, and I am not going to work with a buyer past day one if they won't sign a BBA, that is like working with a seller without a listing in the real world. My sellers prefer qualified and committed buyers viewing their homes, and understand what dual agency is when it shows up and don't have a problem with it, they just want a real buyer to work with, and many of my clients are lawyers and kind of laugh at the idea that either side is being taken advantage of when the rules are followed, thus endorsing transaction broker status, which we don't have in California..
Dual agency is like being an attorney for the prosecution and the defense. In the end, the clients don't get the best service or representation possible. Certainly not as good as if they had sole representation. The only "winner" is the agent who gets paid more, if you consider that a "win".
I have performed in a dual capacity, but not for the negotiation part of the deal. In other words, I might show a listing of mine, if they show interest, I ask my broker to handle the negotiation of the price, repairs and anything else which might make it hard to be objective. It doesn't happen often, but it does happen...and that works well for all of us.
You cannot "represent" two parties fairly. Dual agency in most cases is going to benefit the realtor first, and seller second but rarely the buyer. There is no way I am going to risk my reputation and career over money and a bigger commission check. If a buyer comes back and complains when you have acted in the role of a dual agent, I don't see how you could possibly defend yourself. The buyer truly doesn't understand what they are agreeing to in a dual agency situation and in a court of law I think a Realtor would lose. That is all I need to know to stay away from this scenario.
Before I start individual responses I wanted to say this.
1) I am a agent who works with both buyers and sellers, but have recently started marketing to first-time homebuyers after my last 6 transactions were with them and I saw a growing need and pool that was missing specialty, so it's not like I do not understand the intricacies of representing both.
2) I have agents in my office who double end all the time who I GREATLY respect and admire and LOVE who ARE ethical. My post was not a blanket statement that it was all all sinister which is why I also stated the caveat "Not to categorically state that a listing agent can't back pedal and with all sincerity do their best to take an unbias and neutral role post listing contracts..." Just because I respect them and love them as friends doesn't make them or the situation any less vulnerable to liability in my opinion when playing the role of dual agent in terms of a single agent representing both buyer and seller in one real estate transaction.
3) It would be one thing if it were simply buyer's agents whining and crying foul but there has obviously been enough of a problem for listing agents and their brokerages as well for laws to have been changed or created in some states and to be on the books of others. The laws weren't made because of this lone blog post or others before it. They were created as bills and laws because there was enough litigation and liability that warranted it.
Donne - glad you liked the analogy and thanks for turning my comments from 0 to 1. :).
Jim - there are some situations where both parties know that their agent is taking a neutral stand and is ok with that. But in my experience, the seller wants an agent to aggressively pursue getting them top dollar while buyers want their agent to aggressivley pursue them getting as much as possible at the least amount of expense. Do I see that consistently happening without a lot of Tums for the dual agent ...not so much.
Nevin - you are too much!!
Lenn - I wonder sometimes...
Jackie at least you are explaining and offering options. Some clients only get what tickles their ears.
Andrea - I knew it would be hot for some when I hit the submit button. I may even lose a friend or too as some sound a little miffed at my OPINION. Yikes!
Doug - in terms of saving, someone mentioned a buyers rebate. As long as in additon to that rebate the buyer has aggressive negotiations made on their behalf when it comes to purchase price, repairs, etc then it's all good. How often that really happens, we truly can't call it...
Mike - yes it can be done as it is done quite often even in my own office by very good agents. "Touchy though" comes into play when one ends up feeling spurned.
Bryant - I wish we in CA could get a slice! I can think of more than a few situations where retainers would've been great! I think the laws are changing to accomodate the dual agency issue all across the board. You have already noticed it with short sales although actually in some instances I can see where it would be VERY desirable to represent and manage the buyers in order to keep them on board.
Chuck - it works out quite well for the listing agent. I can't argue if your buyers are happy. But according to some states, not all were.
Charita - your "end of story" worked out quite well and I'm sure that after having developed some type of relationship on both sides they both felt some type of loyalty to you. As my scenario mentioned above stated, it may not always be the case, hence the law changes that happened in a number of states, and the ones dealing with dual agency currently on the books of others. It works for some agents, others it hasn't (those who've been in litigation - some with very sincere agents who did the best they could in that type of neutral situation), and yet others who chose not to take the risk at all. End of Comment. :)
Michael - there are MANY agents who were very sincere in their dual agency representation who were or are in litigation. Sure we all risk frivilous lawsuits happening even when it's single agency, but if laws are being made and currently discussed against dual agency, there is obviously enough litigious liability behind it.
Gay - you said it "end the end you re trying to sell your clients home." Enough said - thanks for your candor.
Ok Alan I won't get you started. I have never seen you "get started" and frankly it sounds frightening...in a David Banner - Incredible Hulk kind of way. :)
HI ANDI! I just linked this to a friend - she is in this exact situation and called the other day saying, "I am not sure the listing agent is telling us everything or representing our best interests." Thanks for the help explaining it to her!
Keith - if you are successful in aggressively pursing top dollar for a seller while at the same time aggressively pursuing the best deal for buyers - then congrats for pulling it off time after time.
Michael - my you ARE passionate about this subject! Watered down as in Black Coffee Representation = Stronger and Diluted Coffee Representation = weaker. Hm..I'll leave that blog post to you! Oh and I do not feel that all agents who practice dual agency are self-serving. There are cases where a buyer can really like the personality of an agent so much that they are willing to take the chance and trust them to represent them. It is the buyer's choice. I don't think it's in their best interest for them not to have their own representation, but hey that's me.
Carolyn - you truly offer a non-bias and experienced view on the subject as a closing coordinator. From what you posted it sounded like you were used as the scapegoat buffer when relaying less desirable information to each side. I'm sure almost all good news came from the agent, hm?
Richie thank you for your diplomatic answer and comment as always.
Sheldon - yes especially if one feels spurned or feel they were cheated in the divorce or breakup!
Larry - even with consenting adults there can be a lot of "pillow talk" to both parties. To the seller: Don't worry, I'll still get you top dollar and because you will save on commission, it leaves room for repairs if asked. To the buyer - I can get you a better deal because the seller will pay less commission.
GOLD team - The best house at no matter the cost is not usually what a buyer will agree to unless they have "by any means necessary" money to throw around when purchasing. But the key is for them to feel and believe they truly were represented fairly. Which sounds like was your case.
I've got to chime in Andi . . . good post and analogy. In Oregon "dual agency" is masked as "disclosed limited agency" Why would anyone want a "limited" anything, let alone representation on their home purchase? Lenn is correct about the oxymoronic use of the word "representation" of both buyer and seller. There is NO "representation" of a buyer or a seller in a dual agent (disclosed limited) transaction. NONE! Karen #28 I don't get that a buyer being turned over to her broker for negotiation would make ANY difference. It would still be dual agency, and since the broker had the listing, there can't be any "negotiation" or "representation" on behalf of that buyer or seller -- if so that's a huge liability. I just don't get why some agents aren't getting it. I'd be very careful in that office under those scenarios. And Alan #16 sums it all up, doesn't he!!
And dang . . . I had been thinking of dual agency posts for over two weeks now. If I write them, don't think I'm a copy cat . . . LOL
Nevin would do anything for a buck . . . HA HA HA Quadruple agency . . . LOL. Kidding aside, there is NO "representation" in a dual, triple, quadruple agency relationship. The ENTIRE POINT of "dual agency" is to NOT represent one side's interests over the others. So, yeah, you'd have to be just like Switzerland . . . remain NEUTRAL and take everyone's money, not get involved . . . and not be OBLIGATED to do a damn thing. How SWEET is the double-dip!! You get both transaction sides, and DON'T have to go up to bat for anyone -- legally!! (Again, as Alan #16 states . . . if consumers truly knew . . .)
Thank you for the excellent read here. I'm in California where dual agency is legal. I can see pros and cons. The "pro" is that you know what both are thinking so you can make the deal happen without giving anything away to either side. Yeh, it's a fine line.
Many good points in your post regarding the value of representation. However, when properly explained, understood and executed, dual agency can certainly work. The bride/mistress comparison is a good attention-getter, but a little too emotionally-charged to be appropriate. One just needs to hope that the transaction is fairly uncomplicated, otherwise it might become extremely difficult to remain completely neutral and to service both sides effectively. Sometimes we just need those Chinese walls!
Many well-written replies already on this post. Dual agency is a hard line to walk - maybe would be best to involve your broker and team member, if available. GREAT TOPIC!
Hi Andi, O.K., I'll bite. First, take out the emotionally charged terms: wife and mistress as they presume something intentionally deceitful and unsavory. Perhaps replace them with mother and kids where the mother has a parental role in deeciding the daily activities of the family to no ones disadvantage. " Mother " makes sure all things happen in an orderly fashion, settles issues among the kids and gets everyone to school on time !
Dual agency isn't for everyone and not everyone is comfortable with it. I don't have a problem with that. My position is this: if the state of Alabama permits dual agency then that is what matters. My integrity does not go down the drain at the thought of getting a larger commission. I could very easily say that those who don't do or condone dual agency simply don't trust themselves, but I won't say it. Fact of the matter is, that it's there choice and it's mine to do the opposite. Boy you know how to get a discussion going. Of course dual agency and part time agents always do the trick.
Hi Andi,
Great analogy! I'd never thought of dual agency that way. Dual agency is also legal in my state of Louisiana as long as both parties agree in writing. The only person who has an advantage is the agent. Of course, if I'm said agent, it's not a problem for me! Seriously though, I have no problem with dual agency or a co op, as long as the listing sells for a fair price and good terms, both parties are happy, and I get paid.
William - some would disagree with being the best analogy as you may have already read. Oh and I wouldn't go so far as to say that all agents that do dual agency are unethical or are only in it for the money as I've detailed in earlier comments re coworkers.
Brian - to say "only ivory tower agents have trouble with dual agency" is as troublesome as the blanket statement as believing that only unethical agents perform dual agency. It is more "ivory tower" to believe that any opinion outside of your own is wrong and/or beneath you. Also it would be those same lawyers that would be presenting to a judge a case for monetary gain as motive whether it were to be true or not.
John - in terms of getting the bEST representation, I too believe the chances are greater with sole representation.
Karen - now that in my opinion is a more viable limited dual agency option simply because when a listing is announced in an office, and it meets the criteria of one of the other agent's buyers, an independently contracted agent in the office can then represent their buyer or seller much more aggressively when negotiating the offer, repairs, closing the deal pressing for as little out of pocket costs to the buyer or top dollar for the seller with fewer concessions without alarming the other client or stepping on any toes because of the perceived neutrality factor. Not everyone will agree with that.
Sherri - I would like to know the hard statistics on defense wins with the dual agency complaints.
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Gabrielle #33 - I wanted to give you a separate response simply because you have just proven yet again, the fine line there is when representing both buyers and sellers in a dual agency transaction. For all we know, the listing agent could very well be as neutral and as fair as they know how to be in that situation. But once the pendelum is believed to have swung too far one way it can become very precarious for the agent. She shouldn't accuse the agent but discuss her concerns with them, weigh her options and then go from there.
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Hey Carla - I miss you! Well I know this is a hot button for you so it would've been impossible for you to sit on your hands in front of the keyboard on this one. :) I actually am comfortable with Karen's scenario using another agent in the office because they are independent contractors representing separate clients, neither having inside knowledge of the other's situation. Both agents will have the green light (not flashing yellow) to go beyond neutrality and aggressively negotiate either top dollar or best purchase price, repairs, etc without the eggshells. I personally think it is more difficult to do so in dual agency. Apparently some respectfually disagree - others not so much respect.
Hella - there is NO doubt that it is great for the listing agent/buyer's agent in terms of convenience. If it's easier having an agent in the office on the other side of the deal where you can walk directly into their office and look them in the eye when it comes to negotiations, even moreso when you are both pairs of eyes.
Olga - the topic is a hot topic no matter the title of the blog. If both parties are easy breezy and are cool with it, fine that's on them. But just as #33 mentioned, it can beome very tricky. Again it can't all have been butterflies and apple pie if laws have been changed to prevent the liability.
Stephen - I too think the best case scenario would be to involve another agent/independent contractor.
Mike - yes it is great to get both sides, know in detail both sides positions, but like your office I agree that it avoids the major potential for liability.
Bill - it is an emotionally charged title, just as for some clients an emotionally charged perception of not being fairly represented in those cases. Again see #33. Of course your mother and kids analogy would be ideal and much more desirable. Thanks for biting. :)
Charita - :) Yes you could've easily said that those who do not do or condone dual agency simply do not trust themselves. I wouldn't agree with that...if it were "said." Just as I don't believe that every agent who practices dual agency is unethical. For me it has less to do with whether or not I trust myself and more to do with trusting that there hasn't been too much room left for liability as so many agents have had the misfortune of finding out no matter how sincere they were in their dual agency efforts.
Scotti - Hey fair price and good terms works for me! :)
Thank you for the time to post this today. I enjoyed the read and have bookmarked it for future buyers.
Patricia Aulson/ Seacoast NH & ME
In PA it is legal if it is disclosed. If done properly there should be no problems. I have done dual agency both as an agent and as a broker. It takes extra care but is possible.
Hi Andi,
I really like the analogy. I have been in dual agency numerous times without any problems. In each transaction, I feel like I represented both sides well and everyone was happy and satisfied in the end. Relationships, specifically, the dual agency kind, can be good for both the bride and the mistress when handled with honesty and professionalism. Great post!
Patricia - you're welcome and I'm glad you enjoyed it!
Erica - you are absolutely correct in that it is possible. I never said it wasn't. Just very tricky and in a lot of cases, potentially opening oneself up to more liability. Thanks!
Hi Dinah - Hey if they are all consenting adults as someone else mentioned, then more power to them! Thank you for diplomatically responding and sharing your successful dual agency experiences.
Everyone keeps believing that being fair and honest is the key ? They are completely missing the point !
Just what is representation ? Is it important or not ? What does it mean to represent someone ? Honestly if consumers have got it all figured out and don't need representation, a mere facilator who knows how to fill out the forms will suffice ! And that service is not worth what most of you are charging for commission !!!
If an agent hasn't interjected their skillset and obtained knowledge into the transaction(whether asked to or not) on behalf of their consumer client they haven't been much of an advocate ! We should be viewed as crucial to every transaction for the knowledge we posess(AND AM ABLE TO SHARE), ability to strategize the transaction with our client and having a constant ability to speak up(advice & consel) to at all times PROTECT our clients interest(without concern for ANYONE else in the transaction. Like an attorney)
Our presence should be felt and our fingerprints(on behalf of our clients) should be all over each transaction ! Convincing trusting consumers that you're honest and fair isn't really what any consumer should agree to when signing an exclusive employment agreement that locks them into just one agent.
Dual Agency not a problem?
Why have many states eliminated it, or changed the name? Because it IS a problem.
Florida stopped "double agent" opps I mean dual agency, and changed the name to "transaction broker"...sounds better and easier to dupe the buyer with....and how the heck do you "partially" represent someone??
Transaction Broker replaced Dual Agency because the mega brokers in south florida wanted to release themselves of the liablility of truely representing someone,(with representation comes that darn responsibility) so they lobbied extra-hard until the Florida Real Estate Commission turned to mush with their eyes crossed, and gave in...and that is a fact!
If "dual agency" or "partial representation" were even remotely possible, all the attorneys would be doing it.
Fact is that statistics show that most of the state complaints are over dual agency. Look at the lawsuits..."dual agency" is the leader...
Eve in Orlando
Andi, this is an excellent post, oddly I had drafted something to post on dual agency a couple of days ago! We have dual agency here in Louisiana and I hate it! I have only been a dual agent once in 6 years of real estate and I didn't like the position I was in. Its a straight and narrow line for sure and you make an excellent point of who benefits. The buyer needs to have their own agent representing them not the seller's agent in my opinion
I have always felt very uncomfortable with a sale where one agent represents both sides. I even once saw a broker avoid a particular agent when he had an offer on the broker's listing. The broker was waiting for a possible offer himself, so wanted to get both sides of the commission. The broker did get the offer, it was accepted and it was for significantly less than the offer the other agent had. Not only did the broker cheat his seller of a higher price for his property, but he cheated the other agent out of selling commission that should have been his.
Gretchen
This is so awesome I might just have to reblog it! Thanks so much for the great blog! I would totally agree that most people think this is a great idea to save money BUT it never works out that way!
Andi - my previous broker did not allow dual agency. If we represented both sides of the transaction, one party was the client (to whom we had our fiduciary responsibility to) and the other party signed a Customer Agreement. I have not had any dual agency problems thus far. Thanks for a very riveting post and best of suucess to you!
Great analogy! My state allows dual agency as long as it is disclosed and both parties agree. It is a tricky business and can open you up to more liability.
Michael and Buyers Broker - see my Addendum to the original post. Interesting read. I wonder how much money has been paid out in lawsuits since NAR started ommitting their original statement.
Marilyn it sounds like you've been there, done that, and your over it.
Gretchen that's sickening to hear.
Rosalie - reblog away!
Karen - there are many who do well with it and it is their norm. But it's one of those things that I wouldn't touch because working in legal arena for over 20 years, this has liability written all over it.
Jordan - thank you and much success to you as well!
Delores - MUCH-MUCH more!
Oklahoma is very similar to Florida.... ditto to what BB wrote. :)
Dual Agency (fiduciary responsibility to both buyer and seller) is illegal in FL. Most of the comments have mentioned why this would be impossible to perform. I like the analogy above about a mother and children, but that still implies emotion and possible favortism.
As already mentioned, Transaction Broker is the norm in FL and is assumed unless a different agreement is made. There is no fiduciary responsibility for any of the parties and the buyers and sellers must be called "customer" not "client", lest they get the wrong impression about the kind of relationship they have.
In this role, the agent acts as a project manager, facilitating the transaction without disclosing confidential information about motivations, price either side will accept, etc. The Transaction Broker still serves a useful purpose to both sides, giving them expert opinions on market value, required disclosures, names of reputable inspectors, bankers, repairmen, etc., helping to solve problems that arise, and giving information and guidance throughout the process to both sides until (and sometimes after) closing. Very few transactions today are simple and straightforward and a good agent earns their money.
Andi....I love all the discussion! I live in Texas and we are a dual agency state. I have done a few. They were done correctly and everyone had a great understanding of the phrase "intermediary status" before doing the transaction. Each transaction is so different and the circumstances vary therefore I like to have the possibility of doing a dual representation deal even though I may decline to excercise that choice. I like having options and I like being treated as the professional I am. I think by having dual representation available to me and my clients it's a validation that I know my business, my clients, and myself. Wow! That sounds like a "driver" personality....lol! I don't like to be put in a box. I ultimately will do what is best for my client.
Thanks for the post...it was most interesting to read the cocmments!
Dual Agency is legal in my state and, of course, it must be disclosed and agreed by all parties. I have not had a dual agency in WV, but had a few in Virginia.
I dont reblog much maybe a handful 6-8 total of my blog posts are reblog so I make sure that when I do its due to great content and worthy of the added exposure. This post is excellent and how buyers dont see this is amazing. Spot on and congrats, you've been re-blogged!
Great blog and analogy! Wow - you really told it like it is - too many home buyers just do not realize this!
Andi:
Your title got me from the first word. I clicked over here so fast it made my head swim!!! Great post and so very true. Congratulations on the feature.
LOVE the analogy and so true in my opinion. Dual agency can be tricky to say the least. Many buyers are indifferent though because they do not believe that they really need representation in the first place. It amazes me how often I have to explain why they need an agent to represent them.
I came here after Donne's recommendation and really like the way you put this. I may re-blog it, but will for sure use this when trying to explain to a buyer why he needs his own agent. Great post!
Andi,
I think you and I are singing off the same page.
Realtors have the right to decide what they want to do regarding dual agency, but I myself have made a decision not to do it. The extra side is not worth the glimmer of doubt that any one of my clients may have, wondering whether I was truly fair. I'll refer it out, and happily take the referral fee!
Andi, I am here because Donne's highlighting your post....Now that disclosure is out of the way:))I am glad she highlighted this post. I enjoyed your analogy of Bride & Mistress I will incorporate that into my vocabulary. I have found that when buyers go to Listing Agents on a House or Condominium they are either doing it because they think they can get a" better financial deal" hence the motivation is Greed....
Now in all fairness I have seldom done a double-ended deal on my Home & Condominium Listings. Now on the other hand I specialize in Land Listings, here it is more prevalent and I have been often on both sides of the transaction. Partly I find that most buyers recognize the special skill I bring to the table being a Land Specialist hence it happens that more often I am in a dual agency situation.
Keep in mind I always let the buyer know I have no problems if they bring their own agent. I have had it happen to me where disloyal buyers I worked with in the low end price point betrayed me and went to the listing agent directly and that always annoyed me, hence I make it my business to make sure that if the buyer has his/her own agent that I do not discourage them from using that Realtor.