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Dual Agency - What Side of the Fence are You On?

McKinney, Texas - overlooking park area

When you list homes and work with buyers the opportunity on occasion will present itself, both sides of the transaction. Such is the case for me, I have a home listed and received a sign call that developed into an interested buyer. What a fantastic opportunity but one that needed to be treated with caution.

In the state of Texas we have the ability to work on both sides of the transaction through what is defined as Intermediary Relationship. There are many responsibilities of this relationship but one clear defining line; you must act as a mediator for both parties, no advice regarding negotiation decisions. You also cannot share any confidences and you must respect the price the seller has the home listed with no suggestion of the value being less. All parties must agree to this relationship and advised of their other representation choices (buyer & seller agents).

This is a very difficult balance responsibility when you are on both sides of the transaction. As an agent you have a responsibility to self reflect as to your comfort, knowledge level, ability to strictly adhere to the responsibility of this type of agency. Also this is probably one of the top reasons lawsuits develop over this form of agency and the perception of how the agent professionally handled the transaction.

Initially when the opportunity knocks you feel a moment of celebration, commission counting in your head, etc. Step back and reflect ... are you informed and experienced enough to properly handle this type of transaction? If there is any moment of a deep breath and hesitation then you best refer one of the parties to be independently represented by another agent. Make sure both the other agent and the party interview each other for comfort and acceptance. Sometimes that separation of relationships is absolutely the right thing to do. Also you need to keep your broker in the loop for counseling, appointment of other agents, etc.

Understand what your state law allows, what your agency stance for what agency types are permitted and become very well informed and comfortable with your professional responsibilities. This is a very sensitive and debated topic in our state for a good reason ... watching out for the best for our consumers.

What side of the fence do you feel is best or are you in the middle?

Posted by Connie Goodrich, CRS (McKinney Realtor) Texas on 04/22/2009 05:47 PM

Comments (272)

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272 Comments on Dual Agency - What Side of the Fence are You On?

APR

Connie

Illinois also allows dual agency and both parties to the transaction must sign in the contract that they are aware of what that means. I work with agents that simply refuse to do it believing that it is the ultimate conflict of interest.

I have also received sign and internet calls regarding my listings but what I am finding is that the buyers want me to "donate" one-half of the commission into the deal because they are "unrepresented."

It never ends.

We can act as dual agents here too, however, I'm more comfortable giving the buyer away as a referral to someone else, because although we are not allowed to 'share confidences', we already know everything there is to know about the seller's motivation, through the conversations leading up to the listing, etc., so as far as I'm concerned, it makes it very difficult to be totally fair to both sides. It can be done, and a lot of people do it, but I'm more comfortable representing my first client, who is the seller.

The other option we have is to treat the buyer as a customer, and not as a client, in which case we often recommend that they go to their solicitor with the paperwork, before they sign anything. (Here, both buyers and sellers MUST use a solicitor to close the transaction, so it doesn't cost them any more to have the lawyer look at the paperwork before they sign).

Obviously the buyer has to agree to how they want to be represented: client or customer; and both buyer and seller must agree to multiple (dual) representation, in writing, before any offers are presented.

The people who are looking for a break in commission, or looking for me to reduce the commission/reduce the asking price, because they are not represented, quickly change their mind when I tell them that it's double the responsibility for me.

Illinois allows for dual agency, but it's a situation that I chose to not get involved in. It's such a delicate balance that I refer those clients on to another agent in my office. Not many agents can handle it successfully without crossing the line, which is why so many states have eliminated the option of dual agency.

Margaret - Oh yes, the giving of the commission and the buyer saying .. I'm representing myself. No background, etc. just want the commission. Feel your pain. We have lots of paperwork with the permission all over it as well. Thanks so much for your comments!

Great post Connie. I am in Washington State; it is alright to be a dual agent as long you disclose it and all parties are in agreement and are aware of it. Although I have never done dual agency, I am preprared to do one I I have to and know what to do and what to say in such case. It would be safe to say that I would be an agent to the transaction and not an agent to either buyer or seller.

Sylvia - in this time especially buyers are out there asking for the commission to be credited back to them in some manner and even agents with billboards up that state ... buyer rebates. Nice obstacle to overcome for working with buyers in the market. Good luck and love your comments!

Julie - it is a balance ... I even flirted with the title of a tightrope in it the balancing act... it certainly does need to be handled with expertise and true caution.

Phiroum - great to be prepared, that truly is the key. Not be caught off guard wondering in the moment what to do and truly designing a problem. Best wishes to you and hope the opportunity comes your way.

Connie, I think in this once in awhile circumstance you just have to be very careful to think before you speak appropriately.

Gary- actually in any type of representation you have to think very clear before we speak. As sue happy as people are we have to always speak appropriately and it is our responsibility to clearly guide any relationship. Thanks for your visit, always great comments and thoughts you share.

Connie...

Here in Florida they've outlawed dual agency. Personally, I think every state should follow suit. But, that's just my opinion for whatever that may be worth :)

TLW...ROAR!

I certainly understand why it may have passed as law to outlaw as it can be a huge issue of what is best for the client/customer. I do believe if one does have a choice then they truly need to feel that is a good and right choice for all parties, not because you make more commission. Thanks for your input!

Connie, I have only done it a few times and it is a balancing act but turned out just fine the few times that I was Intermediary. You did a GREAT job of explaining it and if treated right it does work.

Marchel - I did not state what happened but I do Intermediary and that is what is currently in place with this transaction that is going so smooth and all comfortable. I also teach and been a team leader of my office so I feel informed and take extra special plus plus sure when I discuss things with all parties. Thanks for reading and your comments.

We got burned on it on a transaction earlier this year and would not do it again. We (wife and I) have a listing now that we have gotten three calls on and have showed the house to them, but if they want to make an offer we are going to refer them to our broker and let her handle that part of it. Just too risky, in my opinion. :)

Jared - it is risky. At one time in our area a lawyer got a hold of MLS information that showed who the Realtors were on both sides of the transaction. He sent out letters to the parties stating that they may not have been properly represented, etc. like ambulance chasing. It did stir the pot some. Good luck on all your business and for you, this may be the an unquestion right decision.

I see alot of deals done here illegally concearning dual agency. I make sure I disclose all infrmation to my clients/customers.

I definitely oppose dual agency and therefore, back in 1991 I chose to go with my business model of an office af all licensees that would only represent the buyer as their client. When a past client returns and now wants to buy again but has a property to sell, I refer them to a listing marketing expert in their neighborhood. I disclose to them that the listing agent will represent them as a seller's agent and once the property is sold my company will represnt them a a Buyer's agent. I tell them that the listing agent will be sending my office a referral fee.

In Florida we also have dual. The only time I really find it to be an issue is on the issue of short sale. Not good at all---WAY too much information on the seller's lender side, and that created some issues. Talk about walking a tightrope---never again. Ever. Other than that though----not such an issue after the contract has been signed.

Connie - Serving 2 masters is a tricky walk. I have done it but when I did, It was eyes wide open, mouth shut. I much prefer refering to another agent

I don't do dual agency, although it is allowed here in CA. I will write an offer for a buyer on my own listing, but only if they sign a Non-Agency agreement and understand that I represent the seller only. I still provide them all the info they need to make an informed decision, but they are my customer and not my client at that point.

Luke - absolutely need to watch the letter of the law, ethical responsibilities and make sure all parties know exactly what this relationship means and what you can and cannot do as an agent.

Kathleen - I admire your convictions and your clear representation choice. Good luck!

Christa - excellent point regarding special circumstances that the relationship may not be appropriate. Good luck and thanks for reading and your comments.

Claude -it is very tricky and love your description ... dead on! Good luck!

James - good luck. I have done the same and also have the buyer sign a Brokerage Service document about the agency relationship and initial by the seller being represented. Thanks for visiting!

Whoa...

Comment #19 scares the crap out of me :)

TLW...ROAR!

I've only done dual agency once and *I* wasn't comfortable with it ... The clients were okay with the situation. This was early in my career and once I understood the implications I vowed to never do it again just for my own peace of mind. Never done it since ... If the buyer isn't comfortable I recommend they find another agent to represent them. I don't refer out because I don't want to be accused of steering for my own benefit. So far, only one buyer has decided to go that route.

TLW- that does give pause to think and yes, scary,

James - my compliments on sticking by your comfort level and the choices you offer out. Good luck!

Note to TLW: I was wondering if you'd see that?

I do from time to time do a deal with dual agency. It is usually the case with a builder our office represents and I never have to give him negotiation advice and it also usually is with experienced buyers and all disclosures are made.

We also in Georgia have "Designated" agency which my office uses frequently. It's a type of dual agency. Both agents are under the same broker, but one agent works with buyer and one with seller. As the broker I can't get involved in price negotiations in those deals either. The class I took on it said I had to act like the priest. I could listen to confession and tell no one. LOL. But I much prefer designated to dual.

Tammy- thanks for visiting. We call Intermediary when the relationship is under one umbrella of the broker firm ... another agent in the office may have a buyer that our office also has listed. Intermediary also will include the same agent on both sides of the transaction. Both of these have the broker who has a relationship to both and so the broker does have to be neutral and I love the priest analogy. Best wishes and thanks for your input!

I am in Florida and in my office Dual agency is just accepted practice. As a listing agent, I find that if I am holding open houses and advertising out of the area or out of the country, the buyers only realtor contact is me. I just explain to both buyers and sellers what dual agency means and then deal honestly with both parties. Each party understands the others rights to confidentiality and I have never felt like I did less than the best for either side.

Wanda Phillips, Broker Investment Specialist Central Florida Success Investment Realty

Wanda - the confidentiality factor is just one issue here, it is also giving recommendations. No can do! Thanks for your comments!

Okay...

Well that's about enough of that. I'm sending Broker Bryant over here :)

TLW...ROAR!

Just because your state laws permit dual agency and your broker permits it, doesn't mean you have to practice dual agency.

If you already represent the buyer, why not sell the house to a customer/buyer?

Just notice them up front that you represent the seller, but can give them "custodial care".

That's the way we in MD and VA who don't want to practice dual agency handle these buyers.

It works. The key of course is to be clear that you can't give them any advice that rises to "agency" level.

Lenn - Thanks for your comments and insights regarding your choices.

Hello Connie,

Here is the "Live Free or Die State" -NH DDA is sanctioned as long as the agency you are with decides to go this way. I don't see any reason why it can't work if handled correctl personally.. Of course everyone has to agree /buyers and sellers and sign the agreement. I've done quite a few of these and have had no issues. DDA (disclosed dual agency) was always the way Realtors did business for years. Then Buyer Agency came into being through a lobby of those who thought "buyers needed specific attention" Like anything as long as you have sellers who want to sell-and buyers who want to buy and everyone is in agreement it can work well. As the Realtor, I'm walking the "middle road" staying out of specific issues like price, etc. Perhaps I am more of a facilitator - Now in NH the "particular agency you are with makes the decision as to what they want to use. They can do DDA or Facilitator.

Patricia Aulson/Portsmouth NH Real Estate

"The Live Free or Die State" - NH

We are allowed to practice dual agency, but I'm not a fan. I think it is ok to work with an unrepresented party, but not in an agent capacity on both sides of the transaction...

I don't like it so I don't do it. I much prefer to refer to a colleague and take a referral fee.

Florida does not have dual agency. I am not sure what all these remarks about dual agency in Florida is referring to...We don't do it because it is against the law!

If I have a listing that a buyer wants to buy they do so as my customer. I do not default to facilitator.

My company does not do dual agency as a matter of policy.

Patricia - thanks and great explanation on how things are in the Live Free of Die State. In Texas we are the Lone Star State but I guess if you practice in Dual Agency you are not alone ... and of course need to keep that division and responsibility in mind.

Lane- thanks for your comments ... it definitely must be a personal choice when you do have a choice and of course the other parties are all in agreement.

Corinne - by recognizing what your preference is then you are the winner ... good luck and smart move.

Gary - looks like some of your Florida real estate agents need to read up and become informed.

Both Oregon and Washington allow dual agency. Although I have completed some sales as a dual party agent I really prefer not to. I believe the liability is much higher in a dual agency transaction.

Hi Connie! GREAT post! In Alabama we call it Limited Consensual Dual Agency and you MUST adhere to complete honesty, integrity and in a professional manner toward ALL parties. Disclosure and Confidentiality are of utmost importance. Working in onsite sales for new homes I have handled many of these transactions. In our state it also applies to any listings held by the Broker so under the umbrella you are in dual agency with any listing you sell in your office.

Thanks Debbie - that sure is a descriptive name given to this type of relationship ... but it is very clear. We have the same with the umbrella of the broker if an agent in the office sells an office listing.

Arizona allows for dual agency and I have had several dual agency transactions myself. While there are certainly pitfalls associated with this, I have found that if you explain fully to all parties what a dual agency actually entails these pitfalls can be eliminated. Of course, you have to have everyone's full cooperation in order to do this, and there have been times when I have had the buyers "hire" an agent to represent them because I felt they were uncomfortable.

In Arizona you do have to make sure the buyers know you were hired to represent the sellers, you can tell the buyers (if you even have knowledge of) what price the seller's are willing to accept, nor can you tell the sellers what price the buyers are willing to pay. There are, of course, other confidences you need to keep as well.

As long as you have the discipline yourself to strictly follow your state's laws regarding dual agency, and if you have both buyers and sellers willing to go along with the dual agency, I really don't see a problem with it.

Kellie - That is how our state views this relationship as well. Well said on your last paragraph as well. Thanks for your comments!

Connie - This is a conversation I have with both buyers and sellers at my first meeting with them. I fully explain what dual agency is and that it must be properly disclosed to each party. If either the buyer or seller has any concerns about my being a dual agent, I want to know about it so as not to cause any problems down the line.

Connie...

Although dual agency is legal in Georgia with full disclosure, we never practice it on my team. Georgia does allow for designated agency where a broker can designate one agent to work for the buyer and another to work for the seller.

Congrats on the feature!

Hi Connie - In WA state we can also be a dual agent. However, I've always felt that my first loyalty is to represent my seller as their listing agent and refer buyers to another agent and therefore, that's what I usually do.

Dual agency is like trying to talk out of both sides of my mouth at the same time - and yes, it can work very nicely.... until there's a problem... then ..... frankly we've become such a litigious society, I don't think the risk is worth the "double commission". I have written an offer for a buyer with their knowledge that I still am representing the seller (for ex. when I've listed a builder & I'm sitting their site.)

Thanks for the thought provoking blog.

Dual agency is tricky. You can't divulge any information to either side.

Evening Connie, Representing both sides is a real challenge and it does have its advantages to the parities. Full disclosure and explaining to the parties other options is important.

Donna - any signs of uncertainty, concerns and that is when the line should be drawn. Thanks so much of your comments.

Richard - thanks for the input and it is great you have a defined policy for your team and clear representation understanding. We also have a designation of representation appointment in Texas. It was a surprised to be featured ... thanks.

Bonnie - When you work with a seller closely you may very well need to refer out the buyer as you have certain confidences, emotions, etc. that have been establishes. Certainly a personal decision.

Russ - You have to zip it that if right and for some that is very hard.

This is not a grey area for me. In Illinois, as has been stated before, Dual Agency is legal. However it IS the ultimate conflict of interest. The only one who is served property, during dual agency, is the agent. (this applies just as well in those states which call it "transactional" agency, which is effectively the same).

The seller, hired the agent to best represent the listing and their interests. The agent, when signing-on agreed to do the best they could to market the property, and when an offer comes in to negotiate the best deal (highest price) with the best terms possible.

As the buyer's agent... that same agent signed-on with the agreement to represent the buyer and their best interests. They said they would do the best they could to negotiate the best deal (lowest price) and best terms possible.

Those two goals are incompatible. You can't get the highest and lowest price. Additionally, you can't advise your clients (either of them) in any way that would give them an advantage. You can't assist with the negotiation... you're reduced to a neutralized advisor or questionable value.

the buyer & seller hired you to be a bulldog for their interests, and the best you can do is be a therapeutic puppy. And for this betrayal to your seller/buyer... you now receive both sides of the commission.

Bill - It does have advantages and I a very surprised that others have not touched on that aspect. For me it has been a real advantage as I have got the seller on contract for another home in the area now and it was huge to the listing agent that I was on both sides as they felt that I would have more control on the process and it would be handled well with very qualified clients on both sides. It made a great negotiation position. Appreciate you thoughts.

Alan - in both those agreements in my state of Texas, it covers Intermediary very specific and permission in both agreements must be approved on the front end if an agent were to even show listings from the same agency or engage in Intermediary Relationship. Many thanks for your comments and discussion.

Connie, thank you so much for this post.

I began my career 11 years ago and Buyer Agency was just becoming a "thing" here in Baltimore at the time.

Only once have I "done both sides" because I truly believe and feel that EVERYONE deserves to be represented fully, and have THEIR best interests taken care of.

I realize I may be in the minority, but I would rather be certain that everyone is represented the way that I would want to be, and I truly don't feel that you can do so when you have a written relationship with one side.

Thank you again Connie for bringing this to the forefront of our minds!

Connie,

My favorite REALTORS almost always take one side or the other. Very occasionally, they will represent both sides, and always with disclosure. It's the individual, not the issue, that makes the difference (IMHO.) I love that you were featured with this!

Mike in Tucson

Here in PA disclosed dual agency is allowed. I do it, when I must. But I try to avoid it.

In Florida dual agency is strictly forbidden. Great post though!

~~ Aloha, Lana

I've done quite a few. As long as everyone understands what comes with dual agency it seems to go fine. I've never had any problems.

I find the most difficult time to be when something shows up in the inspection process.

Marney - we need to respect our choices and be comfortable in who we represent. Sounds like you are a wonderful dedicated agent who has followed what your heart leads for this choice. Best wishes and many thanks!

Mike - A surprise feature and I am appreciative that AR found merit for this post and question posed. I have enjoyed reading all the comments. It is an individual choice. Thanks Mike!

Erica - thanks for your visit and follow what is best and you know is right for all the parties involved.

David - inspection repair can be sensitive but I know we do not create the problem, we only mirror the sentiments of each party and mediate the negotiations.

Great post. I wont do Dual Agency. We have the option in DC and Virginia (but not in Maryland) to practice dual agency. We can also treat the buyer as simply "a customer"; while treating the seller as "a client".

I will represent my seller; but if a buyer wants to write an offer - I will be happy to write up an offer and present to my seller - but I wont represent them, or give them any advice in pricing or strategy.

Connie

Thanks for sharing on a subject that is so misunderstood. I still hear agents saying "I represented both seller and buyer". If the "agency disclosure", IABS in Texas, was truly presented and explained, most buyers would opt for full representation. It is tough to "do unto others" with dollar signs in ones eyes. My opinion...Attornies don't represent both sides and neither should real estate brokers. Consumers deserve our best efforts without inherent personal conflicts regardless of accommodations made by law.

Dual agency should be outlawed. Sign calls do not create an agency relationship. If you sign an agreement to represent the seller than represent them. You can treat a buyer as a customer and still receive the full commission.

right... but Connie. Your client didn't hire you to be an intermediary. Your client didn't hire you to be "fair to both sides"... they hired a bulldog, and you betray them by sharing your allegiance, (or lack thereof).

Yes, here in Illinois, dual agency spells out how you must be fair and neutral to both sides. But that's not what you were hired for.

Connie,

I have been there and sure you get excited about the transaction but it really is true balancing act. I look at the respect and repeat business I want from every transaction and so this one is touchy for me. Make it win win for both parties and you will move through the process feeling good. In Ohio your seller is your client and the buyer is your customer and that your loyalty is with the seller. But you must be fair and honest with the customer as you would with your client. Yes it is a fine line but it is workable.

I've skimmed over most of the comments. State laws do vary on dual agency, but I doubt that it's very different from state to state.

Some have said that FL has "outlawed" dual agency. In FL, you're called a transaction broker, correct? From the people I've spoken with, that's basically the same as dual agent here in NC, because you essentially become a paper-pusher only.

Again, state laws and all, but simply referring a client to another person in your firm does NOT solve dual agency. It's the FIRM that is the agent in the first place, so EVERYONE in that firm is a seller's agent AND the buyer's agent.

Designated Agency is also just a more complicated form of dual agency.

Finally, just because you're showing a listing that you or your firm has does NOT mean that you automatically become a buyer's agent to that person. In NC, you have to disclose to them that you're acting ONLY as the seller's agent (and not theirs) so that there is no confusion over the issue

James - Good clear line you have drawn and I truly think that is great!

Keith - there are agents out there who really should not be engaging in this process and they just simply do not understand the responsibilities and obligations, laws.

Michael - love your passion and thanks for your comments.

Alan - I love a good debate and so appreciate others views and strong convictions. I like your bulldog stance. Thanks again for the re-visit and your great comments. Hope others area reading them, make others open their eyes and consider their positions.

Stan - Well stated and you are so right about the balance and respect.

After reading the comments, here is mine. Should it really surprise anyone that we have such a challenge with the public's perception of our profession?

Sitting on the fence, working both sides of the street, double dealing, double ending, double agents telling the public they don't need full representation or undivided loyalty.

I prefer to represent one side if the fence at a time. Sitting on a picket fence can be uncomfortable and potentially harmful.

Larry - Thanks for your well thought through comment .. wonderful that you read others thoughts and summed up your perspective.

We also have dual agency in Wild, Wonderful West Virginia....

Reading all of this is really making me think twice about doing any sort of dual agency, and several of the agents in my office have been so fortunate to do so. I wonder if not signing an interested buyer as a client and allowing them to make an offer on the property as an unrepresented party would eliminate the dual agency issue, but still allow the agent to collect on both sides of the commission?

Hi Connie-
Glad you brought this up! I have actually been 'granted' a few listings because I will NOTdo Dual Agency! I feel so strongly about this and usually put that out there, right up front when meeting with a potential Seller with my listing presentation. I work for them! Period!

(" Do you believe a divorce lawyer can fairly represent both the Husband AND the Wife?")

I was pleasantly surprised how many people actually do understand how risky this can be and don't want to be represented by an agent who would take part. Mind you I do not turn away Biz...I refer!

Hi Connie, here is Ohio dual agency is allowed but we don't practice it. If we pledge our loyalty to our seller up front, we don't feel that it's right to change our stance in the middle of the game should an unrepresented buyer present itself. It just causes too many problems but some agents I know like it.

Thanks for a good post on an important subject - & lots of terrific comments, too. I am in Washington, so dual agency is allowed & I have done it twice (in 14 years) - but I am really, really uncomfortable with it and don't think I will do it again. I have to go along with Alan; one of the benefits I think I bring to my clients is being a good negotiator, and so that whole part of my service disappears if I am a dual agent. Not to mention that I'm human and tend to feel closer/identify more with/like better one party or the other - & so can I truly be totally impartial? It probably can be done well by some, but I'm much happier not to do that balancing act.

ToulaRosebrock,com

Hi Connie:

Great post...congrats on the feature!

NJ allows dual agency as well.

I just closed a transaction last month, of which I was the dual agent. It went very smoothly.

I am closing another at the end of this month, going very smoothly also.

Actually, I am comfortable on all sides of the fence...it's all about communication!

I always say that you can't be married to two people at the same time!

Dual Agency is too often an agent that is risking the future income to get a bigger check right NOW! You just have to always ask IF IN COURT??? WHO WILL I REPRESENT?

I quit practicing Dual Agency other than Designated in 2000 and have found it to be a GREAT selling tool on why the seller should hire me! The truth is because I will only REPRESENT them! I know it can be done and agents will argue on the details of this but it is a personal choice based on ethics and character!

Once I start with a Seller and have Designated Agency and the buyer calls to see the home, I let them know that I represent the seller up front. I can still write the offer and they must agree that I represent the seller on the confirmation of agency. If they want their own representation, I can get another agent to write the offer for them. ( of course on a referral )

APR

I have a simple philosophy:"Thou Shalt Not Put Thine Toosh In A Position Of Creating A Molicum Of Conflict Of Interest."

Plain and simple, dual agency creates a situation that you can loose your license. Is it worth having to go back to school to get an additional degree only to find your not hirable because of an ethics violation in your past?

I don't think so.

I am the ONLY agent in my office who does not do Dual Agency. I am in Washington State and it is allowed with disclosure. I have not found a way to do it and honor the written contract I have with my Seller....I did it once about three years ago and eneded up buying a new stove for the Buyer-obviously, my own mistake with the contract! Never again! I used to have an agent in my office who also didn't do dual....and we had a mutual referral arrangement. I would spin off a buyer to her on my listings and she would do the same for me. Everyone was represented and every now and again we each would gain a "free and clear" buyer.

She began doing dual agency and now I struggle with who to spin buyers off to when I get them....but I am committed to maintaining my "NO Dual Agency" status. I use it as an education piece when doing CMA's and when meeting potential new clients.....and people seem to appreciate it.

In Nevada, we too can represent both sides as a dual agent. In our experience it has worked out GREAT. The relationship on both sides of the transaction is friendly, honest and open. We explain to both sides before we get into contract how we can operate as dual agents so there is no expectation for information that cannot be shared. We enjoy it!

Don't, Won't, Wouldn't, Shouldn't

In Hawaii, it's dual agency if anyone in your brokerage brings a buyer to your listing. Unless you work for a very, very small brokerage, this situation will present itself numerous time. That said, obviously the balancing act is much more difficult if you yourself represent both parties. I have not had to do this balancing act yet but it's common so my time is surely coming.

Dual agency is a joke. The whole Realtor Network works on behalf of the sellers and banks.

I am from WA state where Dual agency is allowed. The challenge is to be impartial. Chances are if you are presented with this situation you know one party longer (the seller). You have already have a fiduciary duty to them. I have an agent in my office and I always refer it out. It's good business and it's in the best interest of the clients.

A few weeks ago I was presented with a blog in which it said that Realtors are on the bottom of the trust list. I think this dual agency had plenty to do with it, since the current economic issues have been tied with mortgage puppy pooh wrapped up in other wrappings and sold off.

Dual agency is legal in California but I believe it should be against the law in all states. In my market, Southern California, double ending listings becomes the primary goal of all listing agents. It's gotten to the point where buyers have figured it out and the "savy" buyers will only want to go direct to the listing agent. In fact, I'm convinced most listing agents in my area present only the inferior offers from selling agents to ensure acceptance of their own offers. It's the number one factor that makes this a completely disreputable industry.

I am totally opposed to dual agency, which makes me a hypocrit since I have doubled ended several of my deals. In California, an agent is a fiduciary. This means that you are not a facilitator or a mediator, you are an advocate. Meaning you are to fight for your client. Remember, the seller and buyer have absolutely opposing goals. Seller wants highest price, least repairs, highest deposit and shortest contingecies. Buyer wants the lowest price, most repairs, lowest deposit and the most time on contingencies. Assuming you are dual agent and intend to make sure your client gets what they want, exactly how do you do that??

There is no way that a judge would allow an attorney to represent both a husband and wife on a disputed divorce. So, why is it allowed in real estate. I know about a situation where the dual agent advised the buyer to come in low because the Seller was still grieving due to the loss of her husband, and just wanted to get out and return to her country. Disgusting.

Dual Agency is legal in Georgia as well and I've only felt comfortable doing it on one occasion -- the buyer was an out of state real estate agent and he completely understood the situation.

Definitely risky in today's market!

What is being shared in this post is NOT dual agency. You may represent the buyer or the seller...but if you have a listing, and also end up with a buyer for that same property... you can, with the agreement of both the buyer and the seller... become, or act as, an Intermediary. There are many stipulations that an agent must follow to end up acting as an "Intermediary"... but none of this should be confused with being a "dual agent." It may sound like it is "splitting hairs"... but it is not. It is totally separate from dual agency.

Connecticut allows dual agency, but it's just too much of a ticking time bomb for our tastes. At the very least we might refer the buyer to one of our team agents, but that's still a little iffy. Preference is to refer it to an unaffiliated agent so the buyers can be fully represented. Dual agency precludes proper representation of either side (IMHO) and is unfair to them. You don't see lawyers representing the plaintiff and the defendant in court, right?

I have been uncomfortable in the few dual agency transactions I've been in. The contract writing, presentation and negotiations were not the problem.

The problem began with the inspection. The seller starts to feel I'm working for the buyer when I come to them with a list of repairs requested. The buyer thinks I'm working for the seller when I tell them what repairs the seller will not do.

I had a dual agency transaction on a newer, beautiful condo where the buyer did not do an inspection. That went very smoothly and both parties were happy. But how many buyers do not have inspections today?

The reason a seller pays a commission is for the listing agent to find the buyer. If you can't do that, don't squander half the selling incentive, your seller pays for, to fund your listing-side commission that does nothing toward finding the buyer! And where's the conflict in representing buyer and seller in the same transaction? Escrow officers do it all the time.

Huh? Escrow officers don't represent anyone ... ???

We're able to act as dual agents here in Las Vegas after full disclosure and consent from both parties. I'm comfortable with the role, but it really is a case by case basis. There are many agents who will handle the situation appropriately, but I do understand the potential for abuse is great, so it makes sense to me why some states do not allow dual agency. Short sales are a great opportunity for dual agency where buyer and sellers goals are more in line than traditional sales.

It's legal in California too. But I'm too not a fan. There is no possible way either party can get 100% full representation or an agent who is fully working in one party's best interest over another. There is no such thing as being able to work in both parties best interest. Then we're just a moderator and a facilitator. I want to be open and honest with my clients about price, other terms and really what's realistic for an offer. And when things go wrong, I want them to have faith that I will handle the situation and come up with a great solution for them. I can't do that if I'm dealing as a dual agent (as in listing agent double ending a deal).

More importantly I want my clients to trust what I have to say, without wondering if I either deliberately leaked pertinent information to the other side and vice versa. And to not wonder what my motives are - because I'm getting the full commission.

I feel bad for some recent clients of mine who signed an offer with a listing agent due to urgency. To be sure one's getting full representation - hire a buyer's agent...period.

So my long answer is no, I don't support dual agency - plus, just like in the stock market, when we're riding high and we're all making money many of us don't care about the minor issues here and there. But when we're poor and losing money we pay attention and if we find something wrong we're going to lay the blame on someone. Dual Agency increases this possibility. There are just way too many grey areas. Why risk it.

Pat, you are missing the line of the posts. Escrow officers are neutral and supposed to be on both sides. Agents are supposed to do whatever they can (legally) to have their clients get what they want. What about a listing agent, with mulitple offers, one of which is theirs. That offer gets accepted. How hard do they work to try to get backup offers for more, which would be in the seller interest. But, if they did that it would be against the Buyer's interest.

Oh and one more thing. I highly doubt that dual agency increases our chances of future referrals from that client. Those usually come after you really wow a client. How on earth can they rave about how awesome you were when you couldn't 100% go to bat for them during the deal. Because you had to be neutral. Doesn't seem like a good start to a beautiful and prosperous relationship to me.

Forget dual agency, who cut my head off

I am amazed at the negative responses on this subject, I guess that is because dual agency is common place here in California. I have been priviledged to handle a few of these transactions over the years and I don't fear them...disclosure, disclosure, disclosure and complete and absolute honesty is all it takes, I document everything and say when I can't answer a question that is a conflict. In fact I see the benefits, you have a seller that want's to sell and a buyer that want's to buy, you know the needs of both and you have a meeting of the minds... your simply the negotiator and your either come to an agreement or you don't, if you are successful and it all works out and you double end the commission, you just did double the work and you've earned it, to me there is nothing wrong with this. I don't see it as a "picket fence" but as a smooth railed fence. I don't live under fear of being sued because I know that I have upheld my fidiciuary duty to everyone concerned.

In Oklahoma, we have done away with the title "Dual Agency". We are either a Single Pary Broker or a Transaction Broker. SPB represents the interests of the client while TB offers limited service to both parties, with full disclosure and consent. Consent must be disclosed up front by a Seller and cannot be coerced by the Listing Associate. I explain that I prefer to work SPB due to the relationship but give the Seller the option. I have worked as SPB but prefer NOT to, due to the nature of the profession. I generally feel out a prospective Buyer's desire for the listing immediately; if they are not in love with it - and most will not be - then I move to show others. If they are, I explain Broker Relationships, my relationship with the Seller and ask how they wish to proceed. I prefer to refer. The Seller hired me to protect their interests and it becomes very difficult to do so in a TB relationship. Have done it, but prefer not to.

Good stuff . Thanks for posting this up. It's always good to read these blogs every now and again to pick up some good tips.

Ahhh Heres the ticker.

Can you be a dual agent if the following happens.

Your office has the listing, you have the buyer. There is another buyer from another agent in your office and now your competing for the accepted office.

You win the buy sell agreement. The other offer is now a back up offer. The buyer who won the offer wants to know what the back up offer is and says that they should be told the terms of the back up offer as it is the only way we could be a dual agent.

So anyone ever run into this scenario???

No trouble with it yet...

As everyone has said, Florida does not allow "dual agency" for residential transactions and has changed the law to make all agents "transaction agents". We are all about semantics here. As a transaction agent we represent the transaction not the parties. We are still allowed to be "single agents" meaning we represent one side only. To do this we can not represent the other side nor can anyone in our brokerage. At the beginning of a relationship we must tell the customer our relationship. If someone who also works with the same broker wants to show the listing we must transition from single to transaction. Single agents have total fiduciary duties to the clients. Transaction agents have limited fiduciary duties to both sides - you can not reveal to one side anything which would harm the other side. Technically you are never supposed to reveal what other offers are to the buying side however it does happen.

I have been in the middle of both sides. It isn't easy. I do give a break on the commission because I know the buyer's agent will be easy to work with<G>.

Commercial deals which meet certain criteria allow "dual agency" because the state figures business people usually have attorneys or can take care of themselves. This allows agents with the same brokerage to represent opposing sides.

HI COnnie, congrats on the feature and the great dialogue going on here. I personally think Dual Agency should be outlawed. I believe my job is to represent either a buyer or a seller, but never both in one transaction. Because one can not represent both. It is an either or situation.

I'm surprised the E&O companies haven't disallowed dual agency.

Martha has it exactly right. In Florida, you can be a single agent, representing either a buyer or seller, or a transaction agent, whose primary duty is to "facilitate" the transaction. It is important to remember that in Florida, all listings belong to the listing broker, not the agent, so if an agent from the same brokerage has a potential buyer for a property, they need to sign the "Transition to Transaction Broker" notice. It can be a tightrope and works better in theory than practice, I think.

Hi Connie,

Here is North Carolina dual agency can be practiced. I however think it is a bad think. That is my I am an exclusive buyers agent. IMO, I don't think that one can fully "service" both clients when you have to be concerned about disclosing facts that should not be.

Great post. Thanks

We have the same thing here in Massachusetts but it is know as disclosed duel agency. As long as you play by the rules it is fine although the buyer loses the ability to get pricing guidance from a Realtor.

In PA where I work, dual agency is permitted. Since the broker "owns" the listing any agents from our brokerage that find themselves on either side of the same transaction are dual agents. This possibility is disclosed in both our buyer agency agreement and the listing agreement. The broker does have the option of making one of the agents a designated agent but chooses to call it what it is, dual agency. That being said, as an agent I will not represent one of my client buyers if they choose to purchase one of my listings and I disclose this in advance of working with a buyer. I am surprised at how many agents locally are happy (anxious) to do this in my market and it is heartening to hear so many comments here by agents saying they don't do this.

OMG! Am I not awake yet? Did I read comments from FLORIDA agents stating that they practice DUAL AGENCY!?!?

Why don't those guys just drive on up to Tallahassee and turn in their licenses today? They might as well 'cause if anyone from FREC sees their post, they are TOAST and they're taking their broker down with them!

People, people, people!!!!! Dual Agency is ILLEGAL in the state of Florida!

HELLO!!!!!!????? I am simply AMAZED!!!!!

I'm for whatever is in the best interest of the client and it is on a case by case scenario.

I have chosen to not practice Dual Agency, even though it is acceptable in Illinois. I am not sure how you truly "represent" both parties in a transaction. I have blogged this idea before and had some harsh criticism from others in my MLS, but I think it is the right way for me. I also think that Dual Agency will become a thing of the past very soon.

Connie,

Thanks for creating some good buzz.

We have made a conscious decision NOT to be involved with Dual Agency. I worked one deal that ended up falling apart after inspections and was darn glad it did. I hated every minute of that transaction. That cured me of my desire for a "double end-er".

We feel very strongly that you are doing both sides a terrible disservice. You can not aggressively represent both so both end up getting short changed.

Just one oppinion.

Win the day!

Mike

RE/MAX Prestige

East Longmeadow MA

In Delaware the law of agency changed about a year ago. Dual Agency now only applies at the Agent level; it used to apply at the Broker level. I tend to prefer representing either the Seller or the Buyer but here's the rub -

Buyers don't understand Buyer Agency at all, especially because the laws are so different in every state. The shades of difference are so slight how are they to know? Almost all of my buyers come from outside my area. They are coming from surrounding states and they have no idea about Delaware's law of agency.

Prospective buyers search on the Internet for a house, not an agent. So, they find an agent because of a specific listing. When that kind of Buyer finds me, I always explain to them that I will help them find the right community and the right house for them; I don't just show them that one listing of mine. Most of the time the house they buy in that case is not my listing but I have never had to refer a Buyer to another agent yet and have completed quite a few successful Dual Agency transactions.

Most buyers think that the way to buy a house is to call the Listing Agent. It always amazes me how little they understand about how real estate works. I prefer the client who asks a lot of quetions about how I would handle this or that situation. One buyer client I am working with now did just that. She asked what our policy was regarding selling our own listings. There are brokerages that pay a higher commission to agents that sell an in house listing (some in my area). I explained that there was absolutely no advantage to me to sell an in house listing or any other broker's listing. I also explained Dual Agency and offered to refer her to another Buyer Agent if that situation arose and she felt that would be in her own best interest. We are way past that now that we have spent time together.

Dual Agency? Is that where we tell our seller client that we will be representing them with all the strength we can muster, then go back later and tell them we won't be doing that quite so much? I have on a few occasions worked with both sides. One as a CLIENT and one as a CUSTOMER, with tons of disclosure to the customer. Did dual agency one time. Father and son had negotiated a deal between themselves and needed a paperwork drawer-upper. Dual agency was the only neutral position my company allowed. Again lots of disclosure.

Well...

It's good to wake up and see a few Florida Realtors who know Dual Agency is illegal here. Tim and Susan have a great point about the comments being seen by FREC. Not to mention everyone here has read them. That can't be a good thing :)

TLW...ROAR!

In Noth Carolina Dual Agency has been allowed for quite a long time now. I have worked it many times with no problems. The bottom line is education up front. You talk to the seller about what happens if it is dual agency. You educate them about how negotiations proceed so they are in a position to make decisions on their own based on the education you have given them so you are not educating them when the offer is in process. The same thing with the buyer - they have to be educated to the process long before it comes up. As you are looking at houses you can teach about inspections, requests that are legitimate, how to negotiate on price - when you are not looking at a company listing.

I find that the bottom line is that I tell the listing agent that if dual agency is not allowed, I can't show their property and no one in my office can show their property since the listing is a company listing. I tell buyers that I could not show them any of my company listings. That along with my education makes them comfortable with the procedure. Knowing what I will and will not be able to help them with at the time of the negotiation ahead of time, helps them be confident during the actual negotiation. I have never had anyone say that they felt unrepresented and I have had many return sales by former dual agency clients. Education, Preparation is the bottom line.

How could anyone pass the state exam and not know that it is illegal in Florida? There must have been at least 5 questions on my agent test that dealt with it and even a couple on the Broker's exam?

With all the publicity within our industry news regarding agency disclosure laws over the past decade, how could anyone with a license not know this basic law?

My, oh my! (...Tim walks away shaking his head in utter amazement.)

Great article. It has been on my mind lately and thought of publishing the thoughts on Craig's List. WHY would any buyer buy a home from the person who has it listed? Why would anyone agree to minimal information or guidance? A seller wants to know the most a buyer will pay and the buyer wants to know the least the seller will take. How can one servant serve two masters? Can a lawyer represent the interest of both parties?

On the same note why would the buyer consider an agent from the same office as the agent who has the listing. If the public really knew or understood the limitations of one agent or one office representing both the buyer and seller I would hope the opinion of agents/brokers would improve.

In North Carolina we practice Dual Agency. The state also requires ALL agents and brokers to provide the buyers or seller a brochure titled 'Working With Real Estate Agents'. It explains the difference between a Seller's Agent, A Buyer's Agent, and a Dual Agent. Guess what? Yep...buyers and sellers aren't shown the brochure. I have seen it signed at the closing table.

So...you want something from both sides of the transaction and still represent only one party? There is a way. A percent of something is better than 100% of nothing. Wouldn't you agree?

In closing...I showed a home to a couple a few years back in my first year. Once inside I immediately showed the brochure 'Working with Real Estate Agents' and asked for the couple to sign acknowledging I went over the material with them. The husband wasn't signing anything. He said we looked at another house and the listing agent didn't show us this brochure. Oh...I wasn't the listing agent on the house I was showing. Well...he tells me the that the list price on the other house was $199K. He told the listing agent that they would offer $190K but would pay the $199K. I feel certain since the listing agent didn't go over the brochure the buyer didn't know who the agent truly represented and whose interests the agent had in mind (hers). More than likely she told the sellers I have an offer for $190K but the buyers told me they would pay $199K. Guess what the counter offer was? Yes...$199K.

Was the listing agent a seller's agent or dual agent? The buyer had no clue to keep his mouth shut thinking the agent was helping him and he was helping her with a sale.

Just closed a short sale less than a week ago where we had both sides...and we have done this many times...If you are honest and experienced and have people you are working with of the same spirit....there should not be a problem...there are buyers who believe in ONLY working with the listing agent and that seems more prvalent now than ever.

okay do i have this right

comment #11 dual is outlawed in florida

comments 19 and 31 dual is alive and available.

so which is it

and

this is a very important issue that agents should know like the back of their hands

jay

Although I am concerned with only the mortgage end of things now, I was a real estate broker back in the days when every agent always represented the seller. Much more simple then!

Whether an agent feels confident about it or not, in my opinion it is impossible to represent both sides of a transaction ethically - no matter how much you communicate or tell the parties you must keep your mouth shut about a particular item. It is an inherent conflict of interest.

I also believe that any agent switching to a transaction agent only for both parties has breeched their duty under the original agency. An agent of the seller should remain an agent of the seller from the moment they accept the listing until the transaction is over. If a buyer doesn't want to hire an agent, so what. You simply inform them that you represent the seller, that you'll be honest with them and answer any questions to the best of your knowledge but that you do not represent them. The seller is the one paying all the commission anyway. The fact that buyers' agents typically get paid by sharing the sellers' commission is no different from the seller paying closing costs for the buyer. Getting the commission from "both sides" of the transaction doesn't automatically imply an agency relationship for both sides.

Jay,

It is a law and a very clear one that is pounded into the heads of every agent during their prelicensing classes and in the post-licensing as well. It has been in our news for well over a decade.

This is not a gray area either. In fact, up until the middle of last year we were required to present an agency disclosure to every customer or client we worked with. We were REQUIRED to disclose agency PRIOR to even showing any listings.

We no longer have to get the disclosure signed by the customer if acting as a TRANSACTION BROKER but we are still required to explain agency to them. TRANSACTION BROKER representation is now the assumed/default agency of all Florida agents UNLESS another brokerage relationship is entered into in writing.

HOWEVER, under NO CIRCUMSTANCES is DUAL AGENCY legal in the state of Florida. No way, no how, no time.

Wow great article, what response your received

Oklahoma has statute law rather than common law, so the law of agency is gone. We are now either Single Party Brokers for buyer and seller, or Transactional Brokers with no specific fiduciary. The change makes it where only one party has to step back, so if another Realtor from my firm shows the property then no change has to be declared except by the one party who becomes transactional, normallt the listing realtor. Why? The listing Realtor normally steps back because he has already done the mareting and estimates. The selling broker then has the ability to make sure that he can advise his client about a proper offer. If I write a contract for a buyer on my listing I still represent the seller, and I can still give comparable sales to the buyer. It is not a perfect system, nothing is, but I like this one better. I still make sure that I advise any potential buyer in this position, his right to seek representation. No extra commission is worth compormising ethics or fair play.

You ask what side of the fence am I on? Well actually neither. I believe the fence is wrong. How can anyone every represent two sides of anything. I believe where we are heading and should head is "transactional" representation. Where the agent represents the transaction rather than the parties. I believe they practice in Florida. I see the comment above as I type this.

THE LAWS REGARDING AGENCY ARE DIFFERENT IN EACH AND EVERY STATE! If you follow the laws of your state and do it honestly and with full disclosure you are fine.

The key to this is to know who you are and if you are knowledgeable enough to handle this or that particular situation. If not, refer to someone else.

This past week the pump that pushes the water through my pool malfunctioned. I live in South Florida and this can be a big problem because if the water doesn't circulate, the pool will turn a very ugly color of green. Because I travel a lot I have a pool service to take care of things. It is their job to make sure my pool stays in tip top share and since they had just been out I jumped to the conclusion that it was their fault. So I called their office and told them I thought their pool cleaner had broken my pool pump.

Less than 15 minutes later their technician knocked on my door. Sure that there would be excuses and expensive repairs I was ready for a fight. But before I could say anything the technician apologized. First he apologized for taking so long to get there (which made me laugh) and then for the pool pump problem. I was stunned into silence. All of the fight in me just evaporated. With two simple words - I'm sorry - he had completely disarmed me. In fact, I said there was no need to apologize because it was probably something I had done any way. Imagine that. I hadn't even been near the pool pump and I was taking responsibility. The good news was it turned out to be a stuck valve and he didn't even charge me for the repair. What he did do was avoid a potentially damaging confrontation and created a very loyal customer.

That got me thinking about the power of apology. In our daily lives we are faced with a nearly constant barrage of conflict. We argue our points, access blame, and stand our ground. From time to time we get our egos bruised by others and that makes us want to fight. And in conflicts with prospects, customers, colleagues, partners, friends and family one thing remains consistent - we want to be right. So much so that at times we will argue that we are right even when we are clearly wrong just to save face.

It is human nature to want to be right. Deep down inside we are competitive and we want to win. Being right makes us feel important. The problem is in each conflict there are two or more parties, all of whom want to be right, and none of whom that are willing to back down. Because of this, forward motion stalls and in many cases, because human emotion is involved, personal and business relationships are strained or severed. The sad thing is most of these conflicts are over little things, like pool pumps, that in the whole scheme of things make little difference.

We've all been there. We've experienced the damage done when two or more people get into a conflict over something small, each wanting to be right, with no one willing to give even an inch.

Later that afternoon one of my customers sent an email demanding to know why his advertising campaign wasn't running on our network. The email was accusatory and worded in a way that was hurtful. It insinuated that I was cheating him out of money. In reality, his marketing staff had failed to send us the advertising creatives on time. As I read the note I felt my face get hot, it made me want to blast him and make sure he knew that he was ultimately to blame because his team had ignored our deadlines. I wanted to defend my honor. How dare he question my integrity? But I remembered the lesson I'd learned that morning from my pool technician. So instead of sending an email, I called him on the phone and apologized for taking so long to get his ads running. On the other end of the line was silence. Then he stammered that it was really his fault because he had taken too long to approve the ads. All the fight was gone. We agreed on the next steps and cordially hung up the phone. The next day he bought more advertising.

What would have happened if I had sent that note? If I had defended my honor? If I had let him know in no uncertain terms that the situation was his fault? I might have lost a customer or worse created an enemy who told other potential customers bad things about my company. And even if I had kept him as a customer there would have always been a level of distrust or ill will below the surface.

Instead, two simple words - I'm sorry - diffused a potential fight. Was this easy to do? Of course not. I had to suck up my pride and put away my ego. And the way I accomplished this was with a basic question. I asked myself: "Jeb, do you want to be right, or do you want to keep doing business with this customer?" The answer to that question gave me the self-discipline I needed to put my own ego aside for the greater good of my business.

This is a question I use often and it works. It is perfect in just about any situation to slow you down enough to consider the consequences of unnecessary conflict.

In sales situation you might ask, "Do you want to be right, or do you want to close this deal?"

With your boss, "Do you want to be right, or do you want to remain employed?"

With your peers and colleagues, "Do you want to be right, or do you want to be respected?"

With your family and personal relationships, "Do you want to be right, or do you want to be happy?"

And with your significant other, "Do you want to be right, or do you want to be alone?"

Some worry that by saying "I'm sorry" even if they are not at fault means giving up ground or hurting their negotiating position. But it is really just the opposite. The power of apology is incredible. When you apologize, you actually gain control over potential conflict. In doing so you open up real dialogue which will allows you to find real solutions. You are able to keep egos intact which helps you build stronger connections and emotional bonds with others. Ultimately, people view you with amazing respect because they recognize that you are about creating win-win solutions for everyone. And that is way more valuable than being right.

Connie, Getting the troops riled up this morning? As a Florida Broker let me set the record staright on how we work in this State. First Dual Agency has been illegal in Florida for more than 10 years:

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475.272 Purpose.--In order to eliminate confusion and provide for a better understanding on the part of customers in real estate transactions, the Legislature finds that the intent of the Brokerage Relationship Disclosure Act is to provide that:

(1) Disclosed dual agency as an authorized form of representation by a real estate licensee in this state is expressly revoked;

(2) Disclosure requirements for real estate licensees relating to authorized forms of brokerage representation are established;

(3) Single agents may represent either a buyer or a seller, but not both, in a real estate transaction; and

(4) Transaction brokers provide a limited form of nonfiduciary representation to a buyer, a seller, or both in a real estate transaction.

***********************************************

In Floridsa we are presumed to be TYransaction Brokers(TB). Transaction Brokerage is a form of representation. NEVER DO WE REPRESENT THE TRANSACTION!!!! This is by far the biggest misunderstanding when it comes to TB. We eithewr REPRESENT the Seller, Buyer or BOTH in a limitted capacity.

**********************************************

(l) "Transaction broker" means a broker who provides limited representation to a buyer, a seller, or both, in a real estate transaction, but does not represent either in a fiduciary capacity or as a single agent. In a transaction broker relationship, a buyer or seller is not responsible for the acts of a licensee. Additionally, the parties to a real estate transaction are giving up their rights to the undivided loyalty of a licensee. This aspect of limited representation allows a licensee to facilitate a real estate transaction by assisting both the buyer and the seller, but a licensee will not work to represent one party to the detriment of the other party when acting as a transaction broker to both parties.

*********************************************

If you are from Florida please reread the LAW about TB. No where does it say we represent the transaction. That is a myth. We arew facilitators BUT we still have duties of representation to the Buyer and Seller NOT the transaction.

In NC we go to another, higher level of dual agency which helps immensely with this. Dual Agency is when you or your company represent both sides of the transaction. Designated Agency gives you the option to designate another agent in your office/company to represent one of the clients. I choose a colleague with no knowledge of the client I am handing off and ask them to represent that client. I always hand off the last client...in other words the one I got most recently in the transaction. Of course I fully disclose to both parties that I will not be sharing what I know about the other that could damage one of them. Disclosure, disclosure, disclosure! But you better have cultivated trust all along!

Oops!! I want to add. i CAN take a listing as a Transaction Broker AND if I find the Buyer I can either represent him as a TB OR I can choose to act as a NON-Representative and not represent the Buer at all. I can still do the deal and place my loyalty with my seller. Nothiong in the law states that I have to be a TB for both parties. But of course since I am presumed to be a TB I would have to give the buyer a:

NO BROKERAGE RELATIONSHIP NOTICE

FLORIDA LAW REQUIRES THAT REAL ESTATE LICENSEES WHO HAVE NO BROKERAGE RELATIONSHIP WITH A POTENTIAL SELLER OR BUYER DISCLOSE THEIR DUTIES TO SELLERS AND BUYERS.

As a real estate licensee who has no brokerage relationship with you, (insert name of Real Estate Entity and its Associates) owe to you the following duties:

1. Dealing honestly and fairly;

2. Disclosing all known facts that materially affect the value of residential real property which are not readily observable to the buyer.

3. Accounting for all funds entrusted to the licensee.

***********************************************

FLORIDA REAL ESTATE LAW CAN BE FOUND HERE

Thanks BB...

That needed to be done and do you mean to tell me we don't represent a transaction? Wink :)

TLW...ROAR!

Double Commission sounds great...but You CANNOT represent both sides! There is no way. You can be neutral but the fact is, I am NOT a neutral Realtor. I will go after the competition, especially when it's negotiation time.

I had a listing that was on the market for 8 long months. I was holding it open every weekend when along came a newly wed couple that fell in love with it. This was an especially tough situation for me because just a month prior, my seller's had turned down a much higher offer than the one I wrote for the newly weds. When it was all said and done things worked out well but I prefer that both buyer and seller have their own representation.

I have worked in this industry for along time, Over a quarter century. Long before key-less lock boxes, The Internet, computers, and of course Agency Laws. While I have worked in a dual agency capacity many times the key here is simple. You can not give information to either party that would adversely affect the other. As long as you disclose this you are fine. However, I would recommend that you not represent a buyer who is buying your listing. You must explain agency law. Then they can either elect to be a customer or client. Since you can not just throw out the fact that your Seller is your client you must ask the buyers to be customers, if they refuse then you have no other recourse but to establish a designated agency. It’s the way it is. Law of agency was created to protect the public. Just as a Police person must inform you of your rights, you must inform your Prospect of their rights to representation. Accept it and move on. This is a fundamental part of practicing Real Estate. Ask your self is it Morally and Ethically right. If the answer is no the either one or both don’t do it. This is a good topic and one that we all can benefit from. Great blog!

Broker Bryant,

Represent the transaction... that's kind of funny if you stop and think about it. ROFL I'm not even sure how that would work??? One thing is certain, however... the 'transaction' isn't likely to call you at 11pm on a Friday night to ask if you've heard anything new from the lender. ;-)

BB The law prohibits a Broker from entering into a contract without first having some sort of agency relationship with your buyer or seller. The fact thatyou choose to be a Transaction Broker does not negate this fact.. You also can not advertise the property unless its an ER or EA ( Exclusive). So transaction Broker is not re4comended by me for a listing agreement nor do I let my agents list a property under theses terms

We have Dual Agency in Ohio, it is disclosed to both parties what the Realtor can and cannot do. Both parties must agree to Dual Agency. Once they do I don't see anything wrong with it. With virtually all information available to the public online somewhere, there is very little information that the Realtor has that would compromise either side. I have the conversation (dual agency) with my sellers when I first place their home on the market. "Just find me a buyer" they say, "we don't care". When the Dual Agency comes up with an offer, only once have I had the seller balk. Do I think I have represented both parties fairly everytime, yes I do.

The listings aren't really yours, they're the companies, so dual agency doesn't just apply to "your" listings, but all company listings. I work for a company consisting of myself, my broker and one other agent in my small town but together we ussually have more than half of the listings (land and homes) in the area. When I represent a buyer chances are that they're going to find a house that my company is listing. If I were to give all these away as referrals I'd never make a living. So I just tread carefully. We obey all the rules and don't discuss listings among each other. Buyers and Sellers sign dual agency disclosures and everything works out fine. A lot of people argue that dual agency is unfair, but they don't think about situations like this. It would be unfair to do a good job and get listings and then bring in buyers and have to send them to a less qualified and less knowledgable agent IMHO.

Dual agency is one thing, but "double-ending" a deal is bullshit!

Dual agency refers to the same agency, but meant to imply two different agents, who happen to work for the same agency. In a large metro area, and a large real estate agency this can be quite common.

In this case the dual agency disclosure is appropripate, as it explains to the buyers and sellers what this means. However in these cases the respective parties are STILL represented by TWO different people with OPPOSITE GOALS (one to sell for the highest price the other to buy for the lowest). So although the agency is the same (i.e. the broker), the parties still get an individual representing their unique position as buyer or seller.

The bullshit comes in when a single agent represents both sides. Did you use the same attorney for your divorce? Then you are a moron! Not surprising in real estate. I don't care who you are, if you are representing both sides then NEITHER side was represented. The only interest that was looked out for was the intrerest of the agent. And no disclosure in the world will explain that to the parties involved.

Good for you, those that said althouth you COULD do it, that you chose to actaully REPRESENT your clients and pass off the deal to someone else. For the rest of you, take a close hard look at whose interests you really represent.

Selling it like it is,

Stefan Lubinski
Get your Free Neilsen Report on Social Media on my Blog
http://www.SellingitLikeItis.net

Good post! Everyone seems to either have a positive or a negative view on this subject. I also prefer not to practive dual agency. I have to be loyal to my seller.

Oklahoma has Single Party Broker Transaction Broker laws. I've sold plenty of my own listings and feel comfortable that all parties knew what they were doing. Transaction broker is NOT a good idea for a first time homebuyer that needs a lot of hand holding. Transaction Broker for an investor that has purchased several homes is probably OK if the seller is also an experienced seller. Each transaction needs to be evaluated as to the applicability of representation. Our representation forms have a spot for the seller to pre-approve Transaction Broker status if the listinga agreement is Single Party Broker. I have a lot of Realtor friends at other companies I work with and refer buyers to them when I feel Single Party Broker is needed on both sides. Of course, the other Realtor agrees to give me the buyer back if the deal does not work.

Wow, 144 comments!

I am not a fan of dual agency, I think our clients look to us for insight and advice and this is very difficult to do when you are trying to represent opposing parties.

I too do not feel comfortable with dual agency even though our state allows it with proper signed disclosures. I always give a buyer to another agent in my office when I get a sign call or ad call. I don't even do open houses on my own listings for that reason. My reasoning is that 50% of something is better than 100% of nothing, and keeping our professionalism intact, keeping our integrity (so we don't look like money hungry fools), and retaining a customers trust is more important to me than the few extra dollars I would make. I have also found, however that in my market, more and more buyers are looking to get that "kickback" (which is totally illegal to do), or have specifically expressed that they think by going directly through the listing agent they will somehow get a better "deal". Perhaps comsumer education on the pitfalls of dual agency through NAR or local boards is in order??

BB... as a transaction broker (basically the same rules as Dual, just with a different name... semantics)... if you represent the seller, and give a notice of "no brokerage" to the buyer... then you're right. You're now representing the seller. No conflict of interest.

Of course, if the buyer was your client originally... or a friend... you've done them no great service by effectively "cutting them adrift".

Does Florida allow you to assign them to a different agent (maybe within your agency... or in a different agency) so that they would be fully represented?? And would you be allowed to accept a small referral fee for referring them to that different agent? We are allowed to do that here in Illinois, and it's called Designated Agency. In my opinion, a much fairer way to handle things.

We do have agents here, in Illinois, who abuse the system... they designate and agent, and take a 90% referral fee (when the board gets a complaint, and follows the money.... finding that you took a 90% referral fee, they'll determine... and rightly so... that not only were you really a dual agent, but you were an UNDISCLOSED dual agent... let the lawsuits begin)... but for the most part, it works well.

It seems odd to me that people refer to dual agency and selling their own listing interchangeably. They are not one and the same by any means. Dual agency doesn't mean you brought your own buyer (isn't that what we try and do? Does your marketing say "call another broker about this house"?)- Dual agency (in most cases) means you have TWO clients on opposites sides of the same transaction.

Dual agency:

I am hired by a buyer to be their buyer agent. They are my client. They want to buy one of my listings. My listing's sellers are also my client. Conflict. Dual agency or plan B.
I list a house. The sellers are my clients (duh). I sell the house. They want me to help them find another house. They want one of my other listings. Conflict. Dual agency.

NOT Dual agency:

Someone calls on my yard sign, internet ad, etc. They don't have an agent. I show them the house myself. They want to buy it. I explain to them that they seller HIRED ME TO REPRESEENT THEM, not the buyers. Most buyers are OK with this. If they aren't, they can go hire a buyers agent.

You can avoid dual agency simply by disclosing, in writing, that you represent the seller in the latter example. In New York, that is the law.

Great post to get my blood boiling!

Florida does not allow Dual Agency. Period.

Seeing the responses from agents saying it does concerns me greatly. But these agents are not alone in their lack of knowledge about agency in Florida.

A quick glance through our MLS will tell you just how bad it is. We have many agents with their personal property listed as Transaction Brokers. What a slippery slope that one is for the entire office!

Our local association has at least two seminars on this subject each year. In light of the failure to understand agency perhaps it should be made mandatory.

Hmmmm, representing a transaction? I really had to think about that crock. It is virtually impossible to represent a transaction. A transaction is a result, not an action. It is neuter. It is the culmination of actions by the involved parties and not a separate independent entity. Can you ask a transaction a question and expect it to respond. If not how can you represent it? Can the transaction make a decision? NO. "Representing the transaction" is simply a sugar coated way of saying "insuring my payday" (and what a juicy one it will be now that I get both ends of the deal.)

I too believe "dual agency" is meant to allow a transaction to be handled by 2 different agents in a single brokerage, not the bastardized version where a single agent lies and says they are representing both sides. The concept is laughable.

We also have opportunity to perform dual agency in California. No one on our team is allowed. The agent needs to hand the buyer off to someone else. The buyer needs and deserves individual representation and I believe we have an obligation to finsh the transaction representing the seller just as we agreed in the beginning. We believe in and adhere to a policy of full client representation and to reduce one's role in a transaction to that of a mediator is to abandon your seller and breach your contractual obligation to the seller in favor of a bigger payday. And starting out with a buyer on this basis is a great disservice.

I personally believe that the practice is unethical, after all, when you approach your seller and ask them to allow you to modify your role, at the same time you bring a buyer, what are they going to say? NO? DAAAH!

We believe that every client deserves the best representation we can provide for them and it is virtually impossible to do so while attempting to wear 2 hats.

And while we are talking duality, why would any buyer's agent waste time submitting an offer for their client where dual variable commission applies? And please don't get me started on listing agents that flip commission back to buyers when they double end a deal.

I plead with my clients to excercise extreme caution in dual agenoies.

What I find the most strange is some realtors arguing that they can represent both and still have BOTH clien't best interest in mind. Sorry.... But as we say down here in the Great State of Texas, "That do won't hunt"!

Alan,

Bryant may answer you in more detail but I just want to make it clear for any Florida agents who don't have a clear understanding of the law that it is NOT a matter of SEMANTICS. Our duties/responsibilities differ depending on the agency relationship and DUAL is illegal. Transaction agency is NOT like DUAL agency.

In fact, when performing our duties as a TRANSACTION broker we do not even have a CLIENT... we have a CUSTOMER. "Client" means there is a fiduciary duty and as a TRANSACTION agent we do not have a fiduciary duty.

Our Definition for Transaction broker is "a broker who provides limited representation to a buyer, a seller, or both in a real estate transaction, but does not represent either in a fiduciary capacity or as a single agent."

Single agency is defined as "per Section 475.01, F.S., a broker who represents, as a fiduciary, either the buyer or seller but not both in the same transaction."

When reading blogs and comments we must all remember that every state has its own laws. Florida is peculiar and agents in Florida need to be very much aware of FLORIDA LAW. Also, I think that all of us, regardless of what state we are licensed in need to be very careful about providing any advice or comments about the laws in other states. I'm particulary wary of anonymous comments that give no clue as to what state they are in or even if they are licensed agents.

J. Philip... yes, under the "yard sign" scenario you describe, you could simply provide ministerial act or give them a notice of "no agency"... and represent only the seller.

Under those circumstances, are you going to rebate the buyer's side of the commission to the seller... since there is no buyer's agent or agency to pay? I'm going to guess that in most cases, the answer is "no". (I can already hear the agents clamoring to step up and post how much "extra" work is involved in handling a transaction where there is no agent on the other side.)

Suddenly, after the transaction is complete... the buyer finds the basement full of water... the roof leaks... or any of a long list of potential scenarios. I talking with friends, family & neighbors, they suddenly feel there representation was abused... they feel "taken advantage of" in the transaction by a professional realtor.

In court, the agent waves the 'notice of no agency' in front of himself as his shield. The buyer says "I never really understood what was happening with that..."... the court notes that a "buyer's agency" fee was paid.... to the agent. hmmmmmm.

I've only had one problem. Virginia allows dual agency although I can see the day when they might not. A buyer had a problem with a termite treatment that was done years before. The home was under bond at the time. I did not disclose as all damage had been corrected. Their lawyer took the position that I didn't have to disclose, as there was nothing we knew was wrong. There is hardly an older home here that has NOT been treated for termites. However the buyer was very angry!

Alan, We do not have "designated agents" in Florida. Plus the agency or non agency relationship filters down through the broker.

I'm not sure who wrote this:

"BB The law prohibits a Broker from entering into a contract without first having some sort of agency relationship with your buyer or seller."

This is an incorrect statement. This law does not exist in Florida. If you disagree then simply show me the law and I will concede. You can't.... because it's not there. We are not helping each other by posting erroneous information.

Tim and Susan... thanks for the clarification... and while there do seem to be some distinctive differences, the similarities to Dual still loom large.

***********************

In Illinois, as a dual agent... we DO have a fiduciary duty to BOTH (and to neither). Confused? Join the club. As a dual agent we are not allowed to give any advice that would give an edge to either side. We can't advise regarding inspection issues, negotiation and more. We are now reduced to offering what I call "therapeutic real estate", with answers like "I don't know... what do YOU think we should counter"... "I'm not sure... how concerned are YOU about the crack in the foundation?". Clearly not what our clients hired us for.

Interestingly, in Illinois, we ARE allowed to have two agents within the same office on opposite sides and that is NOT considered dual-agency... that would be considered designated agency, (agents designated by their agency to represent each client), and they are each fully represented, and the two agents do not share any private information.

I think Ron Tiller (comment #117) said it pretty well when he said: << Dual Agency? Is that where we tell our seller client that we will be representing them with all the strength we can muster, then go back later and tell them we won't be doing that quite so much? >>

I agree with J. Phillips - there is much confusion about the definition of a dual agent. His denifition is what we practice in Massachusetts, however, there is no place on our Manditory Agency Disclosure form for a "direct sale" so agents check "facilitator" which means that the agent doesn't represent either party; not true in a direct sale, the listing agent still represents the seller and no one represents the buyer. The state should change the forms to clarify.

I've been practicing buyer agency for 16 years and only once acted aa a dual agent, and I will never do it again! It's too uncomfortable and no one trusts the agent. I'd rather refer one party or the other and the liability isn't worth the money.

Most consumers don't know or care about representation - they just want the house. If they think they'll get a better deal buying directly from the listing agent, it's probably because too many greedy listing agents are willing to cut their commissions. We really need to raise the bar for our industry!

I am a Texas REALTOR and I am proud to say that I have made it part of my business principles to never "do both sides" of a transaction. I am an advocate for representation for everyone! I refer my buyers who choose one of my listings to an associate for a referral fee. I still get paid on both sides (although not as heftily) and everyone feels like they got a fair shake. I work with many agents who still go for the double sided deal, but I have learned that the liability is to great and far more important is my clients respect me for not taking both sides of a deal. Intermediary is legal in Texas, but I choose not to do it...and now as a broker/owner, I train my agents the same way. I took a poll of every buyer I worked with my first two years in the business and the majority of clients said, "the last time we bought a property, we bought it from the listing agent and we got screwed!" I was horrified and decided my goal was to never have someone be able to say that about me!

In SC dual agency is legal but I avoid it. I rather represent just one client totally. Simpler and less headaches/liability.

Dual Agency is a conflict of interest no matter what. It is allowed in SC but i personally do not practice it. If my buyer is interested in my listing then they are a customer, if we are already in a buyer agency contract agreement I refer them to another agent. I do hope South Carolina changes their position and makes this illegal. Personally i have never met an agent who could or have represented both sides of a transaction without a conflict of interest.

Lyvia May

Rarely, do I work both sides of any of my transactions. mainly because I have 7 buyers agents on my team. But on the occassion where I do, disclosue, disclose, disclose. Disclose that you have a relationship wiht the seller and now with the buyer. Disclose all material facts, make sure you follow all DRE regs and your office regs for all disclosure. E and O is there for a reason, but you are trying to maintain relationships while selling/buying for each party. I like to refer it out and get a little referral fee kick back. A bit more money, way less headache.

Dual Agency is an illegal practice in the State of Texas since 2005. In Texas we use a form called "Information About Brokerage Services." This form advises the parties that the Broker can act as an intermediary (with or without appointments) between the parties. The broker must have the written consent of each party in order to do so. Please let us stop using the term 'Dual Agency."

I made a blog post on this topic about a month or so ago. I think the practice of dual agency should be eliminated. I know it can be done, but it leaves Realtors open to attack about ethical behavior.

Respectfully Joseph, dual agency is still dual agency no matter how politically correct the new name is.

Connecticut allows for dual agency, but it is a practice I avoid. I discuss agency with my buyers and sellers, and while they initiallly agree to it, insecurities inevitably develop. Sellers start to feel uncomfortable about the demands of my buyers, and my buyers demand more and more, because they think I am earning a double commission. It is possible to do this successfully, but it is more than twice the work. Thank you for a good, thought provoking post.

As an agent in Brookfield, Illinois, many of my listings are estates with the executor living out of state. I feel that since I am essentially standing in for them and caring for the property since they are physically unable to, that it is in both the sellers and my best interest that I only represent them. Sure, a double bubble commission would be nice, but a very satified seller, who feels I truly represented their best interest and will send me future referrals, feels much better... and there's less of a headache.

I have one for you, try to make sense of this one. I have a deal where I am both the buyer and selling agent, and the lender as well. Now this one is a real balancing act. So far its worked out pretty good. Will be closing next week.

I liked you post, thanks for sharing.

Minor correction concerning Florida agency:

Florida does have designated sales associate. It is only for non residential transactions. The buyer and seller must each have personal assets of at least $1 million, must sign disclosures stating they meet this requirement, must request this representation status and licensees must give both the single agent notice and the Designated sales Associate Notice.

For those Floridians who do understand the state of Florida's laws regarding dual agency, how does this apply to a new planned unit development with an on-site sales office? If I am driving down the highway and stop into the lush looking Nicklaus Manors community and sit with one of their sales reps, isn't he/she practicing dual agency, by representing the developer and the buyer (me)? Does the law speak to that? Many thanks.

Larry

http://www.GolfCommunityReviews.com

I work in Connecticut, where we have dual agency, single agent, and I have just completed such a deal in March. My buyer came from my enhanced listing... Of course we had everyone involved on both sides sign all of the agency paperwork that's required. The way I dealt with it was to give good advice to both sides, but nothing that had to with confidential infromation. I also advised both sides to get second opinions from other professionals (such as other mortgage brokers with questions of different ramifications from the varied kinds of mortgages that had come in with the multiple bids), etc. It did become a little uncomfortable here and there, but as long as I just offered advice with nothing confidential included, it all worked out fine.

Thanks for the great post. It was fun to read about how different parts of the country deal with this, and how other agents feel about it.

Dagny

In discussing dual agency/designated agency and REALTOR driven legislation, I feel it is important to remember that even though REALTOR organizations can get laws passed, that doesn't remove the hundreds of years of common law.

The point is, a court can rule a based on a law, or they can rule a law doesn't make sense.

For example, in Florida the REALTOR organization could get a law passed that says gravity doesn't exist. That doesn't mean that gravity doesn't exist, it just means there is a law that says it doesn't exist.

Just like when they say a real estate company isn't practicing dual agency when it is representing the interests of opposing parties. The law may say it isn't dual agency, but the rest of the world looks at that and says: "That is absolutely dual agency."

In Michigan the agency laws written by our state REALTOR organization are so confusing that the law firm that wrote them doesn't even understand them. No wonder REALTORS and consumers can't understand them.

Crafting legislation specifically to benefit brokerages at the expense of consumers is shameful and it makes me embarrassed to call myself a REALTOR.

Larry,

In the scenario you presented, chances are that the site agent is a Single Agent to the developer. This is one area where I think our laws do not do enough to inform/protect buyers because in a typical situation Licensees MUST give buyers or sellers whom they do not represent the NO BROKERAGE relationship notice before showing them property.

HOWEVER, two of the specific exceptions to this requirement in which a licensee is NOT required to give a prospective buyer the notice are:

1. At a bona fide "open house" or model home showing that does not involve eliciting: confidential information; the execution of a contractual offer or an agreement for representation; or negotiations concerning price, terms, or conditions of potential sale and...

2. When an owner is selling new residential units built by the owner and the circumstances or setting should reasonably inform the potential buyer that the owner's employee or single agent is acting on behalf of the owner, whether because of the location of the sales office or because of office signage or placards or identification badges worn by the own'ers emplyee or single agent.

My personal opinion is that most buyers do NOT understand agency laws and do not understand that the builder/developer's agent is not working in the buyer's best interest but rather that they have a fiduciary relationship with the builder/developer.

We are called Facilitators in the great state of Tennessee. I did it last year and was comfortable enough because of the buyer and the seller but that might not always be the case. I would definitely refer out to another agent in my office (or even another brokerage) if the level of comfort was not there. Thanks for the post.

Regarding Larry's question about a "new home community" -

I find it interesting that new home communities, at least in Delaware, are not required to have licensed agents or brokers in the sales office. The sales representatives and community sales managers are all employees of the builder. They are not subject to the code of ethics and have no disclosure requirements at all!

But here we worry, rightly so, about whether or not our Statutory Law of Agency (which is what it is in Delaware) is providing proper protection to the consumer.

Everyone that sells real estate anywhere should be subject to the same laws as we are. That would provide the best consumer protection. The buyers' remorse I see most often is from those who bought in a new home community directly from the sales office, without buyer representation. They are the ones trying to sell in this market and compete with the builder.

We have one builder here with a sister company that is a brokerage. They started with agents from that company manning the sales office. Guess what, the disclosure documents and agency laws were getting in the way of selling homes, so they replaced the agents with employees of the builder company.

This discussion is a great example of what is good about a site like AR. Those of us that participate give a darn. We will be the survivors and our clients AND customers will be the better for our efforts.

Larry,

There are a lot of variables in that situation. Keep in mind that Florida law presumes that a licensee is working as a TB. If they are not, it must be disclosed in writing.

I have worked both sides of the transaction for years. In fact years ago there was one year that 65% of the transactions I did were dual.

I have never struggled with this at all. Indeed I have had nothing but pleased clients on both sides of the fence.

Part of it is that I get it! Buyer's want to buy Seller's want to sell. The home is the product and the property stands on it's own merit.

This time can often be less stressful than when you introduce a second agent who may be bent on taking an adversarial position.

Since this is the number one reason Realtors are sued in the State of Texas, my Broker does not allow it in our office. We do Intermediary--sell each other's listings--we just can't sell our own listing. I do know agents who have always done this and never been sued. You have to have a great relationship with both sides and see to it that they both feel like they got a great deal.

Connie Good word on our responsibility in dual representation. It indeed is a serious tightrope walk. It is not easy but has to be done for ultimate fareness!

Response comment,

To Jon Boyd. It is a shame that you take the time to slam others for what you are not able to come to grips with.

The fact that you are uncomfortable with dual agency or whatever term is used in your state does not mean it is the same for all.

The true measure is how each respective client feels at the end of the transaction.

I haven't done a DUAL AGENCY (DA). When I was in agent's class prior to getting my license the instructor said matter of factly that DA was wrong. This went against what the broker intended. The broker made a lot of money with DA. Shortly after that class this instructor either quit or was fired. I think of this everytime I hear of DA or I see a possibility of it coming my way. How would I act if I had to decide? I'm not sure. When I was hired wth a smaller, different broker, he had just performed a DA and made a great deal of money. That was attractive to me. The times that I have come close to doing a DA I realized that it was without question a conflict of interest no matter how much "education' or "dislcosure" there was. With my limited experience, I see that the buyer doesn't really understand DA and what the ramifications are. I would be that mayor in Nightmare Before Christmas, remember? The one with two faces. But I know myself and believe in my own integrity and honesty and want to think I can handle it. Can I really? I guess I am on the fence. I might have to do one to really know where I stand. It's legal in California with bold font disclosure on the contract. But does that make it right? Ummmm?

Hi Connie and all--

The state of New Jersey offers Dual Agency.It does require alot of education.The state requires us to fill out 2 forms to the sellers and the buyers.One being the Consumer Information Statement (CIS), which clearly outlines our role in the transaction.Also another form that basically says the same information.They created this because obviusly there were problems in the past.

For those of us that are newer agents it is a great opportunity.You definately have to feel comfortable and knowlegable to take it to closing.Great topic!

Connie, I bet you never thought your blog would get such a response. In Michigan, Yes we still sell homes here. We have designated agency. If your office is not a designated office every time you sell a in house listing you either represent just the seller or have to go dual. Also there are brokerages that have several offices and their listings are all together. So, it is done here often. I have done it and I must say you have to watch everything you do and say, but like someone said your duty is to sell the home. Of course our law states you must disclose agency up front and when going into a dual agency both parties must agree to it in writing. My broker always states Disclose, disclose, disclose.

Nice blog,

Mary Ann

Definitely many opinions and much insight into this topic. I think it will be debated for many years to come. Here in Ohio, Dual Agency is permitted, although I have never been put in that situation. My thought is how can you truly represent your client's best interest when you can't even give them advice? Example: I list a house for $250k and have a buyer that really likes the house. The buyer wants to write an offer on the house and asks me what price/terms to offer. "Sorry, I can't help you, you need to determine that yourself." They decide on a price/terms and then my seller asks for advice on a response. "Sorry, I can't help you, you need to determine that yourself." I know that the seller is willing to take $230k and that the buyer is willing to spend $240k, how does that NOT come into play (at least in your mind)? It just seems like it's too easy to compromise your integity and make twice as much money while not fully/truly representing either side in the mean time.

There are many comparisons that can be made to dual agency. What if you were an autoworker and the President of the UAW also represented the Big 3? What if you were a professional athlete and your agent also represented the team you were on? How would you like it if your defense attorney was also the prosecutor? I know I wouldn't...

People will do ANYTHING for money. And even more people will do anything they think they can get anyway with- for money. I've been there, we've all been there. But hoepfully we grow up and move on. If you don't, there's not a whole lot anybody can do about it. Maybe fines, pull a license, restrict practicing real estate, not to mention the debris field left behind-unsold property, buyer pulls and disappears. You can't legislate morality but the politicians try, bless their hearts. And you can't really do dual agency. What you can do is to take the initiative to get to a clean closing for your client and get your broker to start the intermediary process and give up the 3% to someone else within the office or a fellow agent who needs a closing (maybe to a rookie) and go back to representing your client only. When you have 4 closings coming up, marketing plans in place, 10 listings to monitor, past satisfied clients calling, 8 yrs in the business...I wouldn't jeopardize that for 3%.

I live in Illinois and we are also a dual agency state. I have done several dual agencies and have never had any trouble with them. The key is to go into "mediator" state. Become a messenger only! You must, however, disclose and re-disclose that you are going to do this--act only as a messenger and you cannot give advise to either party. If they are agreeable to this, you should have no troubles. I have run across clients who would not work with me due to dual agency after I disclose this adamantly. The key is also honesty. You have to really be up front with the buyer and seller at the time of transaction when there is dual agency then it will go smoothly.

Thanks to all who responded so quickly and thoughtfully to my question about planned unit developments. I am putting together a "caveat emptor" article for my web site. Most of my readers are interested in purchasing in PUDs, and I do warn them often about making sure they check the MLS for re-sales to compare with the developer's properties. One thing is clear from reading this excellent thread is that "The buyer who represents himself does indeed have a fool for a real estate agent."

Larry

http://www.GolfCommunityReviews.com

I also forgot to mention, it becomes more difficult to be a dual agent as the price of the home you are working with is higher. In a way you are sitting back and doing next to nothing and your clients are doing all the negotiating and work, but, hey! If they are willing to do that, knowing full well you are getting both sides of the commission and you can stay out of it, you have dual agency. Going over the contract thoroughly as you have the buyer sign and having him initial every step of the way is also helpful. This alerts the buyer to everything he would be entitled to in the transaction. Do the same when you present the offer to your seller. It's really not that hard. If agents wouldn't get so emotional with the listings they take, they could easily do dual agency!

Larry, You would do your readers a tremendous service by helping them understand that the sales people in the sales office do not represent them AND only earn a living by selling them a home in that particular community.

Those same builders do pay a commisssion to Buyer's Agents and it will not cost the Buyer anything. The Buyer who goes direct will not pay less.

Most importantly, a good Buyer Agent will make sure that they look not only at resales within the same community but at other communities as well.

We're getting off topic, but I would like to see more emphasis on this topic in publications like yours.

In my 28 years I have never and never will work as a dual agent, but have, unfortunately worked as an intermediary with both clients. Moreover, I wish it were illegal. The reason is that whether legislated or not, one has to operate as an intermediary; thus, there is no possible way that either party will be represented. Thus, what I have always done, and I explain in advance to my seller, that if I have a buyer that wants to buy their home, I will have another agent that I will refer the buyer over to so that You (the seller) will get 100% representation and so will the buyer.

I am strong on this as I do not have the time to go to any mediation or court over an issue. I had to go to a mediation one time, and that was the straw that broke the camel's back. Try to figure out how to answer questions in a mediation understanding you are an intermediary. See your emails put on an overhead blown up on an 8x8 foot screen and explain each line...and in some cases words of given emails. I still discount the commissions with my seller on such a transaction.

That is me. I do all I can to keep from getting fines, and getting into any major controversy and dual agency or intermediary acting personally on behalf of both clients.

In NC, we have Dual Agency, but I prefer to work one side or the other...Better to be a Desiganted Agent working for Buyer or Seller...I've heard it said that a Dual Agent should act as a 'referee'...Material Facts have to be disclosed, but how can an agent represent both sides, and NOT divulge info that will help one side vs. the other? That is where the term "referee' is said to fit...I don't want to referee, I want to work for sombody, and be held accountable only to ONE....

Wyoming currently has the option of Intermediary, as described by other commenters above, but in July will switch over to allow dual agency instead. As one of the very few commercial agents in town, we frequently handle both sides of a transaction. My strong preference is to have the buyer/tenant be unrepresented, and to only represent the seller/landlord. It does get tricky, and no matter what people acknowledge and/or sign, they do rely upon you, and you shouldn't ever think otherwise!

When I sell, I do like dual agency but can be okay with it with the right Realtor. However, I do not recommend it to the "average" homeowner.

When I buy, I would prefer dual agency since we are comfortable with the process, the details, the legal aspects and like having one less layer of communication.

Candidly, when I am in the role of the consumer/client, I feel that the system incentives Realtors (listing or buyer's) more to get the house sold fast than for a high price. This drives my logic above.

Wow .. did the hornets nest get stirred up or what? First of all I am so impressed by all the passion, thoughts, lengthy discussions, education, insights from varied areas. AR certainly is such a wonderful vehicle to learn, get different perspectives and a respect of how each comes to their personal decision. I am overwhelmed by the response and I promise have read the comments and will go back through again to let some soak in. I think it is great the interaction of our members and points they are expressing. Thanks to all for sharing your thoughts and visiting. A special thanks to those who have come back to read and interject some additional thoughts. I am particularly tickled at the Florida Realtors and their ongoing discussion and laws, very expressive bunch out there! All of you are the best and many thanks, it has been a great education for me to read the comments.

Here in Oregon Duel Agency is allowed but our office chooses not to participate. We have listing agents and buyer's agents in order to avoid the conflict.

We have practiced designated agency in Massachusetts for several years now. Previously, buyers agents were sub-agents of the seller's agent. However, MA still permits "disclosed dual agency" when both the buyer and seller have consented and received notice that the listing agent is also representing the buyer. Once an agent becomes a dual agent, they have an obligation of honesty and full accounting. But that's it. As a broker/owner, I discourage dual agency. In fact, I go as far as offering a bump up on the listing agent's commission if they refer the buyer to someone else in the office (the buyer's agent also gets a bump up in their commission).

Why do this? We have taken measures to protect all client information. Faxes go to individual Accessline numbers for each agent, no one in the office except for me gets to see the paperwork, or know the name of the parties to the transaction. The buyers agent can negotiate on the client's behalf and work with the buyer on home inspection issues.

One thing that I have never understood about dual agents is how they get away with home inspection issues. As the seller's agent, you want to stay far away from learning anything from the inspector that may have to be disclosed if you learn about it. As the buyer's agent, you are pushing for the selller to make the improvements. As a dual agent, who are you siding with? I hope E&O carriers someday take notice to this practice and charge risk-based premiums for this practice of disclosed dual agency.

"Here in Oregon Duel Agency"

Sandy, I think "duel" agency is a totally different animal... but it does elicit interesting images, of Burr and and Hamilton at 20 paces,... "okay.... CONTRACT" (and they whip them out!)

Connie - we're certainly a passionate bunch about this issue. Doesn't look like many "fencesitters" on this one.

California allows dual agency, but it feels like such a conflict of interest. In initial meetings with Sellers and Buyers I let them know that I personally do not represent both sides and we discuss how the situation would be handled if it were to arise. My clients always respect my position and the ground work is set for a relationship of trust. Also, I don't know the exact figure, but I have heard that 60% of legal actions in real estate involve dual agency.

Hi Connie,

So glad to be in the same office as you. You also have great inside tips and experience on transactions that some of us fairly new agents have not even experienced yet! But as mentioned before by one Active Rain member, "Every transaction is a new experience."

Here is our feeling on the subject. We love our career and our family, why would we jeopardize our career for 3%? In all reality, (btw, we are in TEXAS) you took the listing and your fiduciary duty is to the Seller and I don't care how experienced you are, it is not in your clients best interest for you to completley step out of the picture and play the middle man. Not only is there too much room for error, but you never know what can happen down the road. We feel it is better to have someone from our company or a good realtor friend take over the buyer for this transaction and have them pay you a referral fee. Money isn't everything and if we as agents are to raise the bar in this industry we need to be able to make some tough decisions and realize that is isn't about the money it is about the client. Neither client, can fully agree to this if they completely understood that they are paying you to do absolutely nothing but handle paperwork. It is time that this industry raise the bar and create a paradigm shift. (I am now going to get my ladder to climb down the soap box)

Now you know why attorneys only represent one client, representing two clients on the same transaction is none other than "a conflict of interest" and can never be done with either of your clients best interests. Someone needs to explain to me how this can be accomplished. Agency goes out the window.

I think Florida probably has the best method for handling both sides of a transaction. Six years ago, the state declared all agents to be "transaction brokers" unless otherwise disclosed in writing. What this means is that we can work both sides of the transaction, but, of course, we must deal fairly and honestly, account for all funds, do not disclose to one what the other tells you unless they specifically ask you to, and so and so on. When this law was enacted, we still had to use a separate disclosre on each transaction for a period of 5 years in order for the general public to become aware. Fortunately, that time has passed, and we got rid of 1 more piece of paper. Now, if a client wants you to be a single agent, you still can, if you choose, but it must be put in writing. By doing that though, it means that no one in your office can work with a buyer on that transaction. The offer must come from an outside Broker. The transaction broker status just makes things so much easier to follow the law and it seems to work just fine.

Correction - The confusion is that in Florida, Dual Agency is against our laws, however, we are permitted to work with unrepresented buyers and we call it being a Transaction Broker. As a transaction broker we work with unrepresented buyers for our listings. Being a transaction broker in Florida is not illegal.

Wanda Phillips Success Investment Realty

Arizona permits Dual Agency after disclosure and the execution in writing of a Consent to Limited Dual Agency. In taking a variety of real estate courses, I've always been a bit surprised at the vehemence of the conversation on this topic. It's not for everybody: those who think that serving their clients (the initial one, anyway) is compromised should refer the second customer out, and those who cannot edit their speech before it comes out of the mouth are going to get in trouble. Still troubled - go back over your ethics training. Dual agency can be great for all concerned as it can greatly expidite the process, and you are assured of the competence and integrity of the "other" REALTOR. Proceed carefully and professionally, and disclose, disclose, disclose. I've had the opportunity to serve as a Dual Agent between two court-room attorneys, and it was a very comfortable experience.

I am a realtor in CA , and 11 years ago this was a hot topic for myself and my broker at that time. I did not know that dual agency is against the law in Florida! WOW! THIS IS STILL A HOT TOPIC! I guess it always will be untill is is outlawed in all states. Thanks for this great post on Dual Agency , it helps to REMIND ME that it is putting my license in danger! Respectfully, Modesta Cuevas/Keller Williams Realty

Good advise not matter what the specific laws of any state. Be Careful.

And the misinformation regarding Florida Law continues to roll out. I'll try to correct a couple of those. (By the way, Florida folks, all of the info is right there in your Gaines & Coleman, Florida Real Estate Principles, Practices & Law... you might want to dust it off and refresh the ol' memory banks.)

As a transaction broker we do not work with "unrepresented buyers", we work with buyers providing "limited representation." There is a HUGE difference. If no representation is the goal then a DISCLOSURE of NO BROKERAGE RELATIONSHIP is required - not suggested, but REQUIRED. (If the customer desires to proceed with the no brokerage relationship but refuses to sign or initial the disclosure document, the licensee should include a copy of the disclosure in the file with a note indicating that the buyer or the seller refused to sign the document.)

Also, if the brokerage has a SINGLE AGENCY relationship with a seller, another agent or even the listing agent MAY work with a buyer also BUT MUST FIRST obtain written agreement to TRANSITION TO TRANSACTION BROKER. (see FS 475.278 for further info).

New Jersey allows dual agency and requires the full disclosure of this relationship to both parties.

The comment stream alone tells a story of different laws and guidelines vary from state to state. The comment stream alone tells a story of the currently educated ...and continuuing education these agents are on top of....to keep current with the changes.

As BB stated ...Florida has not allowed Dual Agency for 10....yes TEN years and yet there's a statement saying there is.

I am appalled ...are these the kinds of answers one gives to their clients?

I willl just reiterate what Richard (from Hawaii) stated. We are bound to run into Dual as one agent in one office may have a great listing for another agent's buyer in the same office. I have not done a Dual (both sides) as I truly believe it's impossible to give BOTH best representation when the seller would still be the priority. Buyers as customers are a different story although i believe that referring the buyer to another agent for a referral (so the buyer has best representation) would certainly be in everyone's best interest....and that' just my opinion....

Connie...

We are this vocal because, as you can see, by the comment stream here, in Florida there's seem to be a real problem with Salespeople not understanding agency relationships as defined and governed by State Law. Around here anyone can pass the test to become a licensee. Heck, even the full time McDonald workers hold an active RE License. You can only imagine the misinformation and problems we endure as we go through our work days as people who actually get it :)

TLW...ROAR!

When I take a listing, I offer my services to the client as their exclusive representative in the transactional relationship. Many times in my career the temptation to go back on that pledge has presented itself in the form of a buyer/client. I explain my committment as listing agent to the buyer and then refer them to one of my in office associates. It's a win-win because my integrity or committment to my client is never an issue. Both clients appreciate having exclusive representation and I can focus on getting the negotiation and transaction initiated and closed rather than be concerned about walking a moral and legal tightrope. It's good business and results in many referrals - not only from my clients but from other agents in my office when they are in a similar situation.

TLW,

Notice that it isn't just salespeople... one of the folks putting out major misinformation is a BROKER. And we wonder why our job is so difficult and frustrating sometimes.... LOL

This is Real Estate Law 101 for goodness sakes... not rocket science!

Tim...

Are you sure it's not rocket science? :)

The problem with Broker's posting erroneous info is that in our hearts we know that they're passing that down to their Salespeople. That simply scares the crap out of me :)

But, then when I think on it, I realize Salespeople and Brokers who don't get it sure make the rest of us look really good :)

TLW...ROAR!

I am a Broker in Toronto, Ontario and we are allowed to offer services under dual agency. I have not found it difficult at all. I use the pamphlet that is provided to the Ontario Realtors explaining Agency Relationships and I make sure they understand how the negotiating will take place.

I will not show any of my listings to a buyer that calls in to make an appointment unless we have a Buyer's Agency Agreement signed in advance. At the first meeting I clearly explain Agency Relationship and offer them the choice if they want to be a client or customer. I clearly explain that I deal with the issues of the property only and nothing on a personal level. I will not ask them what their final price will be so I have no issues on confidentiallity in that respect. Final price for both parties is usually the real issue.

Some buyers only want to work with the Listing Agent on the Purchase because they feel they will get a price reduction through a commission kick-back. I let people know that I am in the business of selling homes and I do not reduce my commission. I always suggest they ask their lawyer for a price reduction in the bill.

If agents are uncomfortable with dual agency it would be a good thing to offer another agent in the office to work the buyer end and give thema referral fee or half the buying commission for doing so. That way everyone wins and it is kept in house.

I say "no servant can serve two masters..." . I would be very hesitant about doing dual agency as we can in California. I tell buyers all the time that come into open houses wanting to talk to the listing agent that they put themeselves at a disadvantage as far as service, and that one or the other party will inevitably get burned due to disclosure. Best of all there is no charge for my services to the buyer.

"no servant can serve two masters..."

Simply put...And proof that it's not rocket science :)

TLW...ROAR!

Got my real estate license in 1980 and it took only a few weeks to form the opinion that dual agency should not be allowed.

Lets talk 'perfect world' for a minute. In a perfect world, a purchase wouldnt be adversarial. There would be a set of rules to govern real estate transactions. Sellers have to warrant certain things and be legally responsible for misrepresentation. Buyers Would abide by standards including truly being qualified, not doing straw deals, etc. A real estate agent would be a transaction facilitator---almost a paralegal. Thats actually what we are now with home search and taxi service built in.

It aint a perfect world. I imagine a divorcing couple could use the same divorce atty if they were agreeable and simply wanted the terms in writing but we all know that different actions can have consequences we may not realize, and then professional advice comes to play. What was amicable could turn into a bitter fight.

In 30 years Ive been involved in very few dual agency transactions. They should not be legal. I dont want to do them. I wont let greed overcome my desire to stay out of trouble.

A delicate balancing act to say the least. If you not comfortable, refer it out, only then the buyer or seller is not comfortable with the new agent stepping in. Don't like the scenario but IL says we can do it if we want.

I always love these discussions and hope the general public doesn't ever see or hear us Realtors not understand some of our own positions. I've scanned over most of the responses and see we are still up in the air as to truly understanding the meaning of many of these situations. I've often sat with one of my previous brokers and ask some of these same questions and wondered how an office can truly practice, dual agency, transaction broker, or as an intermediator for that matter. Usually the first thing taken is the listing agreement, then a file is created with lots of information stuffed into it and then all of a sudden a sign call comes in and a phone duty agent creates a buyer agency. Even though the law in Texas allows a company to become an intermediator I often don't see the agents actually acting this way when listening to their conversations around the lunch table, they still answer questions as if they were fully representing the buyer or seller. In my opinion if a single agency were to allow both buyer and listing agents they should be separated so as not to allow the buyer agents or "intermediators" into the file room with all the listing files. Can you truly be a transaction broker or intermediator with the files in a common area available to both?

Having both sides of the transaction is much more intrincate than an "English Maze" . I've been in that picture some times before and when the opportunity comes up , the first person I contact for advise inmediately is my broker. The most important thing at this matter is that one as a realtor have to communicate to both parties with dilligence and honesty and one have to clarify them that we are nothing else but a messenger at that point. Besides all that , an essential part of the transaction is what I call "Educating the customers" and I always say to them, that in a Real Estate transaction everything is negotiable except DIGNITY AND ETHICS and that I am a realtor and not David Cooperfield. That has worked for me with a little dosis of patience and persistance.

Thanks so much Margaret for bringing us such interesting article!

Dual agency should be against the law everywhere. All it means is that no one but the REALTOR is being represented. Dual is legal here in Virginia but we also have designated agency where the broker assigns another Realtor in the company to represent the other side. We can also work with a buyer as unrepresented. Dual agency is a great way to loose your license and a fantastic way to get sued. I hear from agents that "I really know what I am doing and have been doing it for years". My answer to that is it does not matter how good you are it only takes one side to get mad at you and you are in court. I promise when most judges see you representing two different people you will not have a prayer.

Do yourself a favor and don't be greedy. Put your seller clients interest first and have a long and profitable Carrier.

Hello ...Florida does not have dual agency....When representing both seller and buyer you become a Transactional Broker....that means you represent the transaction. The Guthrie Team prefers to represent buyers or sellers as Single Agents which means full Fiduciary Responsibilities! You must get both sides to agree for you to transcend into a Transactional Relationship. If someone in your brokerage company has the other side of a transaction again you must by state law transcend to transaction broker eliminating the dual agency relationship.

It might sound like semantics to some but there is a difference. No wonder TLW was roaring !

I quit :)

DUAL AGENCY: I just closed an escrow where I sold my own listing. In this example, the seller preferred I sold her home myself since I would have better control over the transaction and the seller would receive a break in the commission. Here, my fiduciary was to the seller - I owed a general duty of care to the buyer. This fact was disclosed in writing to both parties and both parties acknowledged this important distinction in writing. In the end both parties were thrilled and thanked me for my service.

I am licensed in 3 states, each with a different way of handling dual agency. Our office policy is that an agent may not represent both parties to the transaction, even if it is allowed by law. I am a firm believer in single agency - one client, one agent. Our true value to our client is when we act as a fiduciary. No commission is worth denying someone unbiased representation. When your seller client signed the listing, they gave you confidential information and instilled their trust in you. They should expect no less from you at the end of the transaction. If that means referring the buyer out to someone who can represent them fully, then you have defined yourself as a professional.

MY WORD CONNIE! What a feature! I will be comment #225 - I can pretty much guarantee that someone has already said what I wanted to -- so I will take advantage to just say, "HI!" and nice to see you on the home page again! -- Gabrielle

Hun...

I'm right behind you. No one can say we didn't try. Let's eat :)

TLW...ROAR!

Here in Hawaii we CAN do dual agency. However, our company chooses to prefer encouraging the buyer to participate as a customer/buyer, procure legal representation, and we can then maintain our total fiduciary duty to the seller as a listing agent. For sure it is a difficult, nay impossible task to serve two masters, and once buyers understand the customer/buyer approach, they are enrolled in it.

Great post - thanks!

Of course, it goes without saying (in addition to what you wrote so well), that both the Buyers and Sellers have to agree to the arrangement.....IN WRITING.

Here in Texas, I work 95% of the time with Buyers.....but I much prefer, even if given the choice, to NOT work both sides.

There are too many potential problems, and when I work with a client, I like to be able to give them 110% service - they deserve it!

Edith Schreiber - Dallas, Texas

Oh, I'm so glad to follow TLW and BB! I got to the party late but find that Alan May best sums up my own personal opinions of dual agency. I have never represented both sides of a deal. I would love it if you tallied up how many wrote for and against it! Clearly this is a passionate issue for many of us!

Dual Agency?

Dual agency is legal in California, but I feel best on one side of the fence. I do not like to be on the middle of the fence. The first time I have the opportunity to represent the seller and the buyer I realize I could not do it. I knew the seller wants the best possible price and the buyer was looking for a bargain. I refer the buyer to another agent.

I explain all the pros and cons to each client and leave it up to them to decide -- not that I have a choice, but I always want consumers to do with whatever they feel is in their best interest.

In California dual agency is a very common practice. A real estate agent that has an employment contract with a seller (a listing) may establish an agency with a buyer as well.A licensee can legally be the agent of both the seller and the buyer in a transaction, but he or she must have the informed consent of both the seller and the buyer. the one thing an agent may not do, as a representative of buyer and seller is reveal any information to either, about price, that would influence an offer or acceptance.

A dual agency is also created when a listing agent and a selling agent are agents working for the same brokerage. the real estate broker is then a dual agent. A listing belongs to a brokerage, not the listing salesperson. The listing salesperson represents the broker at all times, as does the selling person. Since they both work for the same broker, a dual agency is created and must be disclosed to all parties to the transaction. Sales where one brokerage both lists and sells a property are known as in-house sales.

Remember, acting for more than one party in a transaction is within the law. Failure to disclose that fact is the violation of the law. A real estate license may be revoked or suspended for violation of the agency disclosure law.

I knew I liked Diane.

Marguerite said: "A dual agency is also created when a listing agent and a selling agent are agents working for the same brokerage."

~~~~~~~~~~~~
Actually, that's not the case in Illinois, which is a designated agency state. The transaction can be represented by two agents from the same agency... in fact the same office, without creating dual agency.

Wow, this is a great post Connie. I actually work in both DC & MD and dual agency has a different meaning where you are. In DC, dual agency is when athe same agent represents the buyer and seller. But in MD, dual agency is when there are different agents, but the broker is the same. Very confusing (especially if I forget where I am).

Great Post, Adri

I sure enjoyed seeing so many professional Realtors that recognize the inherent conflicts of dual agency. I have not dealt with such since 1997. I often tell my clients that I have never figured out how Attorneys with all of their education have never figured out how to represent two opposing parties in the same transaction, yet Realtors (at least some) see it as being perfectly appropriate.

I also tell people that when a listing agent handles both sides of the transaction, they have earned the right to get paid twice as much for keeping the buyer from being properly represented.

Once again, I sure appreciate hearing all of this groups experience and input.

Dual Agency is permitted here in CA with the proper disclosures. But in my experience, the people who repeatedly practice dual agency leave a trail of uninformed Buyers who have no idea what they have signed up for. When I meet with people who are in default of their mortgage loans, more times than not, the agent who represented them acted as a dual agent. I have often wondered if this 'circumstance' played any part in the reason for the default.

In reading most of the comments from Connie's blog, many of us take our responsibility to our clients seriously and act professionally. Unfortunately, there are many who do not, hence, the reason to outlaw it.

Great article. We have discussed this many times in the office. I agree with some of the blogs that it is a sure way to quickly loose your license.

It is allowed here in NC but I also prefer to represent just one side, and get a referral for the other. I have picked up many clients over the years who have had bad experiences with "dual agents" and who felt that the agent was just looking out for themselves and their own pockets, and not fairly representing them.

I am hoping to be in business a long time and would never wish anyone to question my professionalism or integrity....so I am very happy to earn commission on one side!

Thanks again for the article...very interesting!

Hi Connie--Looks like you stirred up a hotspot with this one. I have done a few dual agencies over the years and they usually go smoothly. I did have one that had some challenges, so I brought in another agent so both parties would not feel under-represented. Most of the clients that have been through dual agency with me have come back with referrals, resale of properties or purchase of additional properties. So while it can be challenging, it can be done and done well. Clear understanding of the process by all parties is key.

Well, now think about manage a tois agency! You list, sell and do the mortgage for the buyer. I did ONE and never will again. Of course, the issue of agency is quite different for mortgage people. (See a large, blistering blog in active rain about fiduciary and real estate/mortgage agents)

Had the listing and a buyer came in on an open home. They wanted me to write it up ASAP as they had no agent and didnt want to lose the property. I prequalified them because I was also a mortgage broker, wrote the offer which was accepted, and submitted their mortgage application to a lender named Carl I Brown. This was years before our current mortgage implosion.

Carl I Brwon started to go belly up and sat on hundreds of loan applications. We tried to do damage control and re-submit but the buyer only had a very short time to complete this for reasons too long to convey here, and had to back out of the purchase. During that time my seller had found something else to buy, giving me ANOTHER possible commission as their buyers broker.

Backing out by the main buyer killed it all!! My listing owners sat down and said: "Marvin, we love you like a son, and we know that no one could have predicted the lender would close but instead of all of us being able to sit down, have a stiff drink and gripe about the stupid lender---you ARE the stupid lender. We feel we must pull the listing now'.

That was early 80s and the LAST time I tried to mix mortgages and real estate in the same transaction.

I did nothing illegal or immoral. This goes to show you that trying to represent all sides can affect relationships in a negative way even if all is legal and tight.

If I were new to real estate and joined this conversation at this point, I might just be persuaded to join a monastery. If I was a buyer or seller reading this, I would most likely wonder how the real estate profession survives. There are certainly no shortgage of opinions here about the validity of dual agency; to paraphrase Senator Patrick Leahy (D-VT), "You get 100 Realtors in a room, you get 150 opinions". It sounds like the majority would not and does not do it; some do it occasionally, while a few have no problem with being a dual agent at any time. Then there are those who would not only be a dual agent, but also broker the loan, too. How about appraise and inspect the house while you're at it? Why not cut out all the third parties and do everything? Ok, all kidding aside...it's obvious that this post will not settle the debate in this lifetime. I would therefore say this: to those of you who have opted not to be dual agents, bravo, I'm with you. To those of you who embrace dual agency, I salute your courage in the face of dissenting opinion. And to the triple agents, those who represent the seller, the buyer, and broker the loan: I think that is probably a whole other blog post. Say goodnight, Gracie...

Great post to remind at least the agents in Texas. I've been thinking of doing the same subject. I made a decision long ago in my 35 year career that I could not serve two masters. Intermediary does give us a legal way; however, it is out of my comfort zone still. I believe each party needs full representation, and we can't give that with the Intermediary Notice in place. I'm so technical I make myself sick sometimes, but so far, so good in terms of living on repeat and referral because I am that careful. I have good friends who are equally technical, and they are quite happy doing this. I am doing one maybe tomorrow for an in-house agent who does not want to have the buyer drop back to a customer or to write it up as Intermediary. As a trainer, Intermediary and sub-agency are my two biggest challenges with the agents. I get that "deer in the headlamps" look, then they tune me out, and when I review their offers, they definitely did NOT get it. Can't even fill in the form properly OR remember to put the Intermediary Notice with the paperwork.

Dual agency should be federally outlawed. Many consumers want and need representatation in such areas as negotiation. Dual agency at best undermines that expectation,and it causes a lot of lawsuits

I think that dual agency is a practice that should be discouraged at all costs! There is no reason why both sides should not be represented. Most agents admit that they do not adequately explain the conflicts of interests inherent in dual agency representation, therefore, the consent from the buyer and seller is not made with full knowledge.. nor are they offered the opportunity to be referred out to a competent agent. I know what I am talking about here... I used to represent Realtors who attempted to represent both sides. The only one that benefited (at least in the short term) was the agent and the brokerage. Lawyers refer cleints out when there are conflicts and real estate agents should do the same. My very first post was on this topic.

Will take the time to read all the responses this weekend - just spent the whole week helping Grandbaby #11 enter the world today, and am exhausted, but needed an AR fix.

Without having read any responses yet, I choose not to do dual agency. Frankly, I do not feel that, IN THE BEST INTERESTS OF MY CLIENT, I can effectively "negotiate" with myself. Therefore, I cannot do the best job for my client, especially my buyer, by doing this. Even though we can legally do this in Pennsylvania, I disagree with it. Whenever the opportunity presents itself, I will always refer to another agent in our office/company, and have a "Designated Agency" situation.

Just seems the best thing for all, and protects me legally in the long run - no extra room for error.

Assuming a Realtor concientiously does his/her best for the seller and the buyer, I see no problem with dual agency (except of course if the state doesn't allow it). While we, of course, have to follow the laws, I focus on the morality of the situation. In the best of all worlds, I want to be the person who is brings a willing seller together with willing buyer -- without an "adversarial" elationship developing.

When I list a property, I explain up front to my sellers that there will be (a) an appraisal conducted by an independent company representing the buyer's lender, and (b) a "home inspection" conducted by an independent lilcensed inspector paid for by the buyer. This puts the seller on notice that the successful sale of their home will depend on it being fairly priced and in good condition.

When I am a dual agent or a buyer's agent, I always insist that the buyer have a home inspection, and even if they are paying cash for the property (rare indeed), that they have an appraisal done. I have sometimes paid for one or both of these things myself to ensure that the deal I put together is fair to all.

I have also refused to work with a seller who wants to "hide" important flaws to the property or wants to overprice it, and have always refused to work with the buyer who wants to take advantage of a seller's naivete or special circumstances. For instance, a buyer told me he knew that the seller of a particular property "has to sell because he's been ordered to Iraq," and that he (the buyer) felt he could get the property "for a lot less" that what the seller paid for it (seller had purchased the property 2 months earlier and had it listed at the price he paid for it). I explained to the buyer he would need to hire a different agent because what he wanted to do was just plain wrong.

I think most people bring their values to their business -- and if your values dictate "fairness" and "openness", I doubt the "dual agency" laws will hinder that. There is no better feeling than knowing that I made two families very happy.

APR

Wow ! What a great thread of discussion here ! Connie - you really struck a chord here. Also, looks like a lot of consumer comments which is great. Dual Agency seems to be one of the most sensitive topics here in Active Rain and in the industry as well. I have done several Dual Agency deals over the years and believe that one strong agent handling the deal can be much better than an inexperienced agent handling one of the sides. Also, I do believe that several of the deals we have done in the past, would not have gone through at all without our involvement. However, each case does deserve scrutiny and a decision by the agent to do the deal or refer one of the sides out.

I just did a complicated deal 2 weeks ago that was dual agency. What I decided to do there was to lower the RE commission and include a 1 year AHS home warranty on the deal which protects all the sides that much more.

I can understand that states that allow this may disallow in the future. But I would still like to share my experiences just so people can see that this can and does work. Further, investors will often go directly to the listing agent. They will pay cash and have no contingencies. Not much risk there... is there ?

I wrote a featured post on this awhile back as well... interesting comments: Dual Agency - Are you an Advocate ?

Connie - If you could, please do a follow-up post or update in terms of how your experience went with your current deal. Good luck with it ! It is great to share the real-life experiences which stands out more than theory as well.

Here in Pennsylvania we can practice Dual Agency... We are dual agents on any office listing we write a contract on!! I see many agents above mentioning that they would refer the client to another agent in their office... In PA, that is still Dual Agency since the listing is under the same Broker as both agents...

I think agents need to know their individual state laws on this so they don't make any mistakes when referring client to others in their offices... Educating our clients is also so important when it comes to Dual Agency and then have them make the decision on what they would like to do...

We avoid it when possible but it can be done correctly and it is put in writing & everyone signs...

have a great weekend, amy

Gee, I posted a very similar blog in members only recently that was hardly noticed. I guess being an AR newbie means your blogs may well be ignored by the hierarchy. At some point I will upgrade but the AR caste system seems a bit much.

John... it's not a "caste" system, so much as being a "newbie" means that there weren't as many people who actually SAW your post. But commenting on posts that are visible (like this one), and posting quality content to good groups will get you read, and eventually get you lots and lots 'o comments.

Connie, this isn't the first post about dual agency that I've seen on AR. But, it has garnered many more comments.

Dual agency is much the same as asking the fox to watch the hen-house.

Dual agency is much the same as getting less than half the value for the full price. Not a good value for me as buyer or seller.

As a buyer or seller, agency does not benefit me. One of the values of a realtor is to be represented, to have someone looking out for my best interests.

If I was to be involved in a transaction with a dual agent, I absolutely would expect the commission to be halved, because I'm only getting half the realtor value at best.

Kentucky allows dual agency. The office I work with likes dual agencies, but not with me.

I'm not even sold on the idea that two different agents within the same office can adequately represent the buyer and the seller -- same broker.

Kentucky does have a disclosure statement to be signed about dual agency. I don't think the average buyer or seller understands the implications of dual agency, even if it is the most ethical, well-intentioned agent. The majority of folks don't do that many real estate transactions in their lifetime.

Alan- There is no "buyer agent" part of the commission. The seller hires me to sell the house for X%, period. The seller PAYS ME at closing, period. How I split it with another broker if they bring the buyer is secondary, and the law doesn't apportion the commission. No representation is implied, and we have a signed agency disclosure for every transaction. If the basement floods after the closing and the buyer had an inspection, that's baseball. NY is a caveat emptor state.

Okay. I slept all night and part of the morning, then checked on Abby and the new baby. All is well.

Here he is...

So I came back here to read thru all these comments. WOW! 252 so far!

Anyway, to clear something up about the laws of agency in the state (Commonwealth) of PA, those who say that DUAL AGENCY is at the broker level are right. But the way the law is written (READ YOUR "CONSUMER NOTICE"!!!), it is at the AGENT LEVEL that is is defined for any particular transaction - and the following are quotes directly from the Consumer Notice that we must present to anyone before having any substantive conversation!

(BOLD PRINT ADDED BY ME TO EMPHASIZE THE DEFINITIONS):

"Dual Agent: As a dual agent, the licensee works for both the seller/tenant and the buyer/landlord. A dual agent may not take any action that is adverse or detrimental to either party but must disclose known material defects about the property. A licensee must have the written consent of both parties before acting as a dual agent."

"Designated Agent: As a designated agent, the broker of the selected real estate company designates certain licensees within the company to act exclusively as the seller/landlord agent and other licensees within the company to act exclusively as the buyer/tenant agent in the transaction. Because the broker supervises all of the licensees, the broker automatically serves as a dual agent. Each of the designated licensees are required to act in the applicable capacity explained previously. Additionally, the broker has the duty to take reasonable steps to assure that confidential information is not disclosed within the company."

Applying the above quote from Pennsylvania's Consumer Notice to this quote from James & Amy in comment #249 above: "We are dual agents on any office listing we write a contract on!! I see many agents above mentioning that they would refer the client to another agent in their office... In PA, that is still Dual Agency since the listing is under the same Broker as both agents..."

I respectfully disagree with your "interpretation". I do not believe it is open to interpretation! The Consumer Notice makes it very clear.

So... James & Amy, in the state of PA, if you sell a listing from within your office that is NOT YOUR LISTING personally, you are acting as a DESIGNATED AGENT for your broker, who is the DUAL AGENT. If you sell one of your own listings to your own buyer, you are a DUAL AGENT! If you represent a seller and a licensee from another agency brings the buyer for your listing, you are the seller's agent, and the other licensee is the buyer's agent. If you write an offer for one of your buyers on a listing of a licensee of another agency, you are the buyer's agent, and the other licensee is the seller's agent. There really is no room for any other "interpretation".

Therefore, whenever one of my buyers may wish to write an offer on one of my listings, I will always refer the buyer to another agent within my company to be the buyer's agent, and I will always stay with the seller as the seller's agent, and we will both be DESIGNATED AGENTS, while our broker will be the DUAL AGENT!

As I said before, since I cannot effectively negotiate with myself, and I have a fiduciary obligation to my original client, I will never serve as a DUAL AGENT!!! Legal or not, I believe Dual Agency at the licensee level is wrong, and in the best interest of no-one other than the licensee who does it! However, it is definitely not in the best interest of that licensee as far as risk management goes. Just because you've never had a problem yet doesn't mean one won't come back and bite you in the butt sometime in the future. We do live in a very litigious society, and you don't have to be at fault to be the victim of a frivolous law suit. Why on earth would you want to tempt fate? I certainly do not and will not!!!

I am safest with Transactional Brokerage as I represent the transaction t the detriment of neither party. Of course here in Florida, probably like else where it states that an agent can represent either party without monetary gain.

Consumers need to demand that each "side of the fence" be represented separately.

Buyers must have exclusive buyer representation by a true agent working for a brokerage that NEVER takes listings. Sellers must have exclusive seller representation by a true agent working for a brokerage that never works with buyers. No more transaction brokers or designated agents!

Consumers have been exploited and abused by this industry for far too long.

I am licensed in NV. In my opinion, EVERY STATE should make dual agency ILLEGAL (it is legal in NV with signed disclosure documents). The concept is one of the biggest shams that NAR puts over on consumers - it is NOT in any consumer's best interest. This is in place ONLY to serve listing agents and brokers.

APR

Connie,

Well written as usual.

Intermediary can be such a difficult tight rope to walk. What is amazing is how many agents and brokers don't really understand intermediary. Many brokers don't even have a policy that addresses the subject.

Very interesting discussion. In Ontario it is permitted with proper disclosure and consent.

Initially I was opposed to it completely. The reason is that I practised law for 25 years. Then, several dual agency situations (called multiple representation here) occurred, and I found that it worked out. It was difficult, but it worked.

Properly speaking the role of a mediator, arbitrator, or facilitator is quite different from that of a messenger. Besides, I haven't run into that many great negotiators out there.

There are certainly some problems with dual agency, the most critical of which is the inherent unresolvable conflict of interest. But, even if it cannot be resolved, perhaps a suitable accommodation can be arranged.

Not every agent is a good negotiator, so the mediator role may work to the advantage of some clients. Frequently, both parties want a deal, particularly in a business situation. They want the deal done and here is where an effective mediator will outshine a negotiator any day. The parties are close but often too stubborn to give in, so the deal gets lost. With a good mediator these deals stay alive and get closed. Everyone is happy!

There are two extreme camps when it comes to dual agency:

· Those opposed, in all circumstances

· Those in favour, without serious reservations

Opposed

To those always opposed, I would argue that there are many examples of successful dual agency outcomes. If there weren't, I wouldn't be writing this. The best philosophical argument is offered by those who are strongly opposed. They seem to have a better, moral and ethical foundation for their arguments.

The only problem that I have with that view is the simple, practical list of exceptions....a whole series of cases where BOTH clients were better served by having one agent, in fact, the same agent acting for both of them. The test question is client results and client satisfaction; and not the issue of whether the agent was only motivated because there was more money in the deal. I don't really know that for sure. What I do know, is that BOTH clients were very pleased and happy with the result. There was obviously some merit in the dual agency arrangement. The agent acted as a mediator and got the deal done. The clients wanted RESULTS, not more and more negotiations.

In favour

It's easy to take on this group. There are many reasons why dual agency won't work. Often there is a substantial conflict of interest and this will not go away. Again, just the same as the firmly opposed group, the arguments of this group are just self-serving.

RESOLUTION

Somewhere between the two extreme positions is a middle ground, and this is where I think the issue of dual agency should find resolution.

The consumer must be informed. The concept must be explained. And, as most legislation will require, the written informed consent of both parties should be documented.

In practice, it is the explanation that usually falls short of the mark. This is the area which must be fully explained. Both clients should understand and appreciate what they might be losing and what they might be gaining by adopting the dual agency environment.

Unfortunately, if the realtor wants to represent both parties they will often explain it in such a way that the client feels that it is quite a reasonable alternative. Actually, it can be explained appropriately, and the client may very well give the agent a chance to prove that they are an excellent mediator.

All too often, the client is misinformed on several key points because the agent fears the truth behind the explanation.

So, who is the agent? Right now, it is the brokerage. I would prefer the sales representative to be the agent. That would eliminate all the dual agency issues in the offices of a large, dominant, local brokerage. To some extent, these are technical dual agencies. But, the result is the same and the clients are asked to give up some rights. This doesn't make any sense. The principal-agent relationship should be between the client and the selected sales representative. The firm really has nothing to do with it. This approach would eliminate over 90% of the dual agency situations.

That leaves us with the same agent for both parties. There are two options here:

· Consent and go with dual agency

· Designated agency, and go with an appointed agent

Both of these alternatives represent reasonable options for consideration.

If the same agent acts for the seller and buyer, then the mediator route could work. Naturally, mediation will have to be within the skill set of the agent, and both parties must agree.

However, I do have a problem with two buyers both individually being represented by the same agent. Here we have a multiple offer situation. I think the only reasonable approach is to have one of the two buyers assisted by an agent designated specifically for the purpose of acting for them. This is much too dangerous a situation for the realtor. Simply from a liability perspective, I think the agent should avoid acting for both buyers in competition with one another.

In conclusion, dual agency is a fact of life. There is no firm answer: it is always right or it is always wrong. That is too simplistic!

Each such situation should be considered on its own merits. There should be a bias against dual agency. This acknowledges that there are problems and these problems require resolution.

If a suitable and acceptable accommodation can be made, then it would be appropriate to proceed, with caution.

Brian Madigan

APR

The problem with this discussion is that there isn't a clear, simple, understanding of dual agency because dual agency is determined by state law. And clearly from the comments here, state laws vary widely on the the subject.

For example, NC has dual agency. Dual agency is established once ANY agent in the firm (acting as a buyer's agent) shows a house listed by the FIRM (not the individual agent). As a seller, it's really NOT in your best interest to not allow dual agency, since you effectively shutout the whole listing firm's agents from selling your property (if they are buyer agents). In a 150 agent office, that's alot of potential buyers missed.

Designated agency is available in NC as well, but by definition, it's still considered dual agency.

I'm not speaking out for or against dual agency here. My point is that it is next to impossible to have a valid discussion about the pros and cons of it UNLESS everyone is speaking about the same type of dual agency, which we're not. So, which state are we going to use as our basis?

Paula Bert by far has the best answer. She says it all. If you follow her advise you will be doing yourself and your client a BIG favor.

I was very surprised by the answer given by Brian Madigan. I am not versed on Canadian courts so that may be the difference. I can not imagine a US attorney advising that dual agency is ever a good idea as there are alternatives that accomplish the same goal for the client.

There is one point though that I don't agree with regardles of country of origin. I can not see how you can be a good mediator if you are not a good negotiator so that part of the argument is lost on me.

With that said Brian has a very well thought out argument.

APR

Connie,

You obviously like to live dangerously. Dual Agency is also allowed in Arkansas with full disclosure in a timely manner. This subject always makes some people nervous. I think that it is a personal issue that each of us have to address. If it makes you feel uncomfortable, then don't do it.

To me, if you fully disclose who you represent and you fully disclose what you can and cannot legally do and you do those things fully and completely in a timely manner and in writing you should be ok.

If you are one of those Agents that can't control what you say or keep a secret, then I think the answer is clear, settle for the listing or try to get a referral fee.

I believe at no time should an agent work as a dual agent. It confuses the participants and can only hurt the industry- we already have enough people thinking we are not as we seem.

Connie,

I agree with Rodger Johnson, Dual Agency is determined by State and State laws differ. In California as I stated, a Dual Agency is also when the Selling Agent and the Buying Agent are with the same Broker. This is a very common situation in our State. There are many large Brokerage firms with hundreds of agents. You must not only DISCLOSE- DISCLOSE- DISCLOSE, but you must also EXPLAIN- EXPLAIN- EXPLAIN.

In many of these situations it is good to have a trusted broker to refer the buyer. It can keep you out of trouble!

Barry

Thanks for your comments.

First, the law generally in Canada is no different here than it is in many of the States. Besides, the law of agency derived from the marketplace in Persia over 5,000 years ago, long before the beginnings of common law. The intention was to prevent the agent from cheating the principal. Today, the laws in common law jurisdictions and others are very much the same.

To be perfectly frank, I'm quite surprised by my own answer. I wrote and published articles against dual agency several years ago. However, at that time, it was based on theory not experience.

But, as time went by several real life situations developed. I found myself on both sides of the same transaction. No wanted to leave. Both the vendor and the purchaser demanded that I remain involved.

So, after a short stint of me sitting on the sidelines with a good philosophical argument, and with both the vendor and the purchaser now represented by their own agents, I received a phone call. To cut to the chase, both parties met with me over lunch and effectively demanded that I do the deal. The instructions from both, in the presence of each were quite simple: "come up with something that is fair, and we'll sign it."

I agreed. There was a condition. I was not the legal agent for either. They would both have a free walk away, if their respective lawyers did not approve the deal. I wrote a long letter to each of their lawyers explaining my role and the very real conflict of interest that it presented. Both parties agreed, and so did their lawyers.

I have acted as an Arbitrator and as a Mediator in many legal cases. Both parties have their own counsel, and agree that I am to come up with a solution. This particular "dual agency" role is really just like non-binding arbitration or a mediated settlement.

Effectively, the vendor's agent wants "A". At the opposite end, the purchaser's agent wants "C". However, what they really know is that they are going to have to meet somewhere in the middle if they truly want a deal. So, I come up with "B". I say "B" is fair to both sides. They agree, and sign. Now, they have a two day cooling off period, to take it to their lawyers.

You also wondered about the mediator and negotiator comment. In fact, I agree with you if you aren't a good negotiator, you won't be a good mediator either.

I suppose, I just don't come across that many good negotiators. They are relatively few and far between. Yet, in many cases they all seem to think of themselves as "wonderful". They advertise this "fact", and then, when the occasion presents itself they bail, become messengers back and forth and ask for double the commission. Now, that's just plain wrong!

I have a number of transactions where I have effectively worked on both sides of a deal. Just think of union and management negotiations. Sometimes I act for a union, in other cases I act for management, and now quite frequently I am approached by both sides to mediate a dispute. Here, I don't think there is that much difference compared with dual agency. It's much the same. Maintain confidences for both sides, don't reveal the other's bottom line and come up with a solution. Get both parties to agree.

There are however several interesting problems:

•1) real estate agents are not trained as mediators, and

•2) real estate agents are not trained as arbitrators.

So, if they are not trained and have no experience, the simplest solution to stay out of trouble is "just don't do it".

Brian Madigan

APR

While I hear a number of agents boasting about double-ending and I'm sure it's been very lucrative, I don't think the long term win is there. Serving two masters is never easy. The buyers and sellers I've met who have been unsatisfied with their past real estate experiences have often been involved in dual agency transactions. This was especially prevalent in the hot market - buyers felt if they didn't buy then and there, they'd lose out all together. But once the frenzy dies down and there is time to reflect, these buyers feel they weren't well represented. That may not even be reality, but it is perception. So there is little chance that the buyer will re-engage the services of that same agent to sell, and perhaps buy another home. And we all know that buyers and sellers talk about their experiences to anyone who will listen. So the agent who performs dual agency runs the risk of a tarnished reputation even though they may have handled things appropriately. I expect that we will see a flurry of lawsuits in the next few years as agents handling both sides of short sales or REO transactions find themselves in the middle of situations gone awry.

APR

I did many a two-sided transaction in Houston but I was never comfortable with them. Still aren't. Out here, though, where prices are so high, it's sooooooooooo difficult to turn them down if they come your way.

I do think it's extremely difficult, if not impossible, for one to accept a listing, basically saying, "Hey, Seller, I'll sell your home for top price as fast as possible." Then, 30 days later, you decide to accept a Buyer as your Client on that same property, basically saying, "Hey, Buyer, I'll help you buy your home for the lowest price possible, even if it means some unnecessarily but legal delays to get a better price from the Sellers."

Can't be done as an individual. At least need an assistant on the team to represent the other side even though you'll get both commissions since you pay your assistant a salary.

Whenever I do a home inspection for a past Client who is not using the same Realtor as last time, I always wonder what happened. Sometimes I find out, and invariably it's because they didn't think the Realtor was working for them in a dual transaction.

In the short term, it's lucrative. In the long term, I don't think it is. However, if you can do enough of them in lots of short terms, then you don't have to really worry about the long term. But as my wise old grandmother said, "It's always easier to keep a Client than it is to find a new Client." I'd rather keep past Clients coming back than to work so hard trying to replace them with new Clients.

MAY

I've only done one dual transaction. It was a condo priced at $495,000. As seems to be the case with most dual transactions out here, this one wound up in Court, albeit small claims court, and not involving me. I actually thought the Buyer, an out-of-area Realtor, had a strong case, but the Judge saw it differently and ruled in favor of the Seller. I'm great friends with both the Buyer and the Seller, but I'm not sure I ever want to go through that again.

MAY

As a matter of policy, neither my broker or I practice dual agency.

About 1/2 my business is as a seller's agent, and 1/2 as a buyer's agent. Every year, there are a handful of transactions where I represent the seller, and handle the buyer as a customer - always with a signed disclosure and frank discussion about the benefits of having a buyer's agent. Some deals just don't need much besides ministerial services.

Having said that, I sometimes have felt that a deal would get done if there were another agent in the mix - someone to hold the buyer's hand, help analyze their needs, encourage them to move forward. These things are hard to do for your "customer" without crossing over into the sticky wicket of implied agency.

I take agency very seriously, and the counsel an agent provides is definitely one of the key benefits of hiring an experienced agent.

Buyer's lack of confidence is one of the main bottlenecks in our market today - more than ever we need buyer's represented by great agents who can help them overcome their feels and proceed with confidence.

I think I am doing a disservice to my sellers when I pass up the opportunity to refer a potential buyer to a colleague who can help bring them to the table.

MAY

Very interesting.... Thank you!

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