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Dual
Agency is the process by
which one real estate
broker represents both
the
seller and the buyer
in a transaction. It is
legal in Georgia,
provided it is fully
disclosed and consented
to by all parties. It is
also of questionable
ethics – at
best! – and
impossible to effect
fairly in practice.
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Just Say "No" to Dual Agency When a Realtor refuses to show a particular listing this would be consider STEERING. |
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Buyers and sellers of real
estate are often confused about
the role of real estate agents,
whom the agents represent and
real estate agency
relationships. Many states
require that agents give buyers
and sellers an agency disclosure
form to sign.
Buying agents who represent buyers are working in a single agency capacity as a buyer's agent. Seller's agents who represent sellers are working in a single agency capacity as a listing agent. Agents who represent clients under single agency owe a fiduciary responsibility to the client. They cannot share confidential information with the other party or the other party's agent. Single agency agents must use care and due diligence to perform duties, disclose all material facts and be honest. Buyer's agents and the buyer generally sign a buyer's broker agreement, which lays out the duties and obligations of the agent. In some states, if buyers do not sign a buyer's broker agreement with the agent, that agent does not represent the buyer but instead becomes a sub-agent of the seller. Sub-agents owe the same duties to the seller as the listing agent. Seller's agents and the seller sign a listing agreement, which also lays out the duties and obligations of the agent. Listing agents and buyer's agents each owes the client loyalty, confidentiality and accountability. Many agents work as buyer's agent with buyers and as a seller's agent with sellers. However, some agents work solely as exclusive buyer's agents and never, ever take a listing. Dual Agency With Two Agents Because all real estate agents are licensed under a real estate broker, it is possible to work with one agent who is licensed by the same broker as the listing agent. This situation creates a dual agency. The agents could work at separate offices and be strangers to each other, but since they are licensed by the broker, they are still operating under dual agency if one agent represents the buyer and the other represents the seller. Starting out, an agent may have created an single agency relationship with the buyer, but when the buyer chooses a home listed by that agent's broker, the agent's relationship with the buyer changes. Not all single agents note the distinction. In the real world, most of these dual agents talk the talk of dual agency but continue to walk the walk of single-agency representation. Dual agency must be agreed to in writing between the parties. Laws vary from state to state. In California, for example, exclusive buyer's broker agreements contain verbiage that allows dual agency, so most buyers don't realize their buyer's broker could be subject to dual agency. Only exclusive buyer's agents are never dual agents. Dual Agency With Same Agent A listing agent who also represents the buyer is a dual agent. Dual agents cannot operate in a fiduciary relationship with either party and must treat both sellers and buyers equally. They cannot share confidential information but they cannot give confidential advice. A dual agent in California was sued by the seller because she told the buyer to ask for a carpet allowance from the seller. It is very difficult to obtain the highest and best price for the seller when the agent also represents the buyer. The dual agent cannot advise on home price nor terms nor negotiate on anyone's behalf. Some buyers prefer to work solely with listing agents because they know the agent is receiving both ends of the commission, that is the listing commission and the buyer's agent commission. They feel the listing agent is motivated when a buyer makes a purchase offer to get that offer accepted. They might also ask the dual agent to further negotiate the real estate commission to increase the seller's profit on a low-ball offer. Post |
The Pitfalls Of Dual Agency
NO DUAL AGENCY
Real Estate Double Agent | Dual Agency
Dual Agency Should Be Illegal!
Dealing With Dual Real Estate Agents
Wolf in sheep's clothing?
Real Estate Charter Of Rights
The Pitfalls Of Dual Agency
Agency Relationships in Real Estate
Why I Don't Practice Dual Agency
Why You Should Know About Dual Agency
REALTORS TRYING TO BUILD HOMES
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What is Dual Agency? A dual agent
represents both buyer and seller
in the same transaction.
Although widely practiced, dual
agency has come under increased
scrutiny in the last few years
for the following reasons:
In states that permit dual agency, a real estate agent (or firm) may not represent more than one party in the same transaction without the full knowledge and written consent of all parties. Dual agency is most likely to occur when a buyer, represented by a buyer’s agent, wants to purchase a property listed by that same agents' firm. A dual agent must carefully explain to each party that the agent and the agent’s firm are also acting for the other party for whom they have the property listed.
How does an agent handle personal information about a client? The dual agent may become aware of personal information that does not necessarily relate to the property but, if disclosed, could harm one party and benefit the another. Example: Agent A lists commercial property for seller B with an offering price of $500,000. Seller B tells the agent that he is in need of cash and will take as low as $425,000 for a quick sale. In a morning staff meeting the next day at Agent A's firm, Agent A informs other agents of the buyers bottom line price and need to sell quick. Agent C (another agent with the firm) acquires a buyer who is interested in the property. (Agent A and C at this point become dual agents). The above example creates a unique situation since under traditional agency law, Agent C must disclose the sellers bottom line. At the same time, the firm and selling agent are obligated legally to act in the best interest of seller B without disclosing personal information about the seller that might harm the sellers' bargaining position. One possible solution to the above dilemma is for the agent to include, in the dual agency contract, a provision that the dual agent cannot be liable to either party for refusing to disclose information the law does not require be disclosed and which could compromise (potentially harm) one party's bargaining position and benefit the other party.
Did the agent provide timely disclosure of dual agency and were the potential consequences of dual agency sufficiently explained to both parties? Generally, both clients must provide "informed consent" meaning that not only do they consent but that they sufficiently understand the agency relationship. Did the agent treat each party equally fair and comply with his/her duties required under the laws of agency? Most importantly, a dual agent cannot favor one party over the other. All the disclosures in the world will not relieve the Agents' liability if he/she advocates for one client at the expense of the other. It is not yet clear by the courts whether the loss of advocacy (in dual agency) results in a reduction of the agent's "duty" to the client. Proper explanation and advance authorization by all parties in the initial agency contract is the critical factor. Post |
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1. Discuss with the agent how he
or she plans to be fair to both
parties.
2. Talk with some of the agent's past clients where dual agency was performed. Ask whether the clients felt the agent treated them fairly throughout the entire process, if the agent fully explained his or her role early on in the process, and whether the clients would recommend this agent to a good friend. 3. Get comparable prices of homes in that neighborhood from another real estate firm to ensure the property is not overpriced. (Companies usually provide this information for free.) REALTORS TRYING TO BUILD HOMES: You would have to wonder the quality of a home when Realtors are involved in building homes, listing them and selling them all at the same time. Realtors should not be practicing builder duties. A builder has the experience, knowledge and the license to build solely homes verses an inexperience and with the lack of building knowledge a Realtor would. You would have to question who will warranty the construction if problem arises. Each Professional needs to stay within their field of expertise. You would also have to wonder the loyalty of a realtor taking on listings from other home sellers and trying to sell his own built homes. |
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Dual Agency:
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