Not long ago I mentioned a property not far from where I live.  The property started out as a normal listing, then failed to sell over time.  After numerous price reductions, it became a short sale.  After even further price reductions, it finally sold.

The agent who sold the house served as a dual agent in the transaction.  Approximately one month after the home sold and a few small changes were made to the property, it was listed again with the same agent.  The remarks for the property mentioned that it was a recent short sale and had been updated so it now is an even greater bargain!  Of course, the home is again going through price reduction after reduction.

If I were the original owners, I would be extremely suspicious of the agent.  Was the agent entirely neutral in this transaction?  Did the agent honestly try to sell it before the prospect of dual agency arose?

There is another agent who also sells a number of homes in my area.  What I find remarkable is she serves as a dual agent on almost all of her properties.  I don't know about you, but when I list properties at a good price I tend to receive offers.  Shouldn't the odds favor that most of her homes are not sold through dual agency?

These are just some examples of why I believe dual agency should not be allowed.  When I sign a contract with my sellers, they are paying for the following.

- My advice for preparing the home for sale and pricing

- My marketing and sales skills

- My negotiation skills

However, in the case of dual agency they suddenly lose the third item.  I now must remain a neutral party between the buyer and the seller because by law I cannot disclose any financial information to the other party.  Therefore I cannot even suggest a response for either the buyer or the seller without the advice being tainted.

This also applies to the buyer.  Sure, we have the buyers sign papers informing them what dual agency is, but how many of them truly understand this?  The purpose of the selling agent is to bargain hard for a price and conditions for the buyer, which I cannot do while under contract with the seller.

The argument I hear from many agents is that if the listing agent finds buyers for the property, it is in the best interest of the seller.  This is true, but the listing agent does not need to actually represent them.  I have found buyers for my properties before, and I always refer them to other agents.

This is a win win situation for all parties.  I can still negotiate hard for my sellers.  The buyers have their own representation.  I am paid for finding buyers for the property and the selling agent receives a solid lead.

In the cases above, if you were the sellers wouldn't you honestly be a bit suspicious?  In the case of dual agency, how are the sellers to know that their interests were kept secret?

Say a home is for sale for $450,000.  According to the realtor it is worth this much but hasn't sold for a month.  The sellers are willing to go as low as $400,000 and the realtor knows this.  Now all of the sudden a dual agent deal arrives for $400,000.  The realtor cannot provide any advice to the sellers about whether to accept or counter to the deal.  Doesn't this sound a bit suspicious?

The fact is, a lot of people out there do not have good opinions of realtors as a whole.  This is one of the reasons.  Imagine you pay an attorney in a lawsuit to defend you and he goes to the other side and accepts a fee for disclosing all of your secrets?  This is the same thing that occurs with dual agency.  Sure, it is illegal for the agent to do this, but it is also extremely difficult to prove in court that he/she did it.

For these reasons, I think we should not allow dual agency.  It is just too easy to abuse.