In California, where I work, one agent handling both sides of a transaction is not considered unethical. I've heard from several of my colleagues in other states, however, that for them it is not allowed.
From my perspective, it seems like there is a conflict of interest. I have represented both buyer and seller in a couple of transactions and I felt like I was walking a tightrope. In both instances I reported to the sellers that I had a buyer that wanted to write. The sellers both times wanted me to handle the buyer rather than referring them to another agent. I documented every conversation, made sure to keep paper trails on every point of negotiation, and bent over backwards to make sure every tiny issue was disclosed and agreed to by both parties. They came to a happy conclusion, but I still felt uncomfortable.
I think my discomfort comes from an association with other agents that handle the issue differently. On many occasions I've seen agents working the loophole of the double pop in a way that I found to be detrimental to the interests of the sellers.
Scenarios:
1) The agent takes a listing at a low commission rate - either the agent does not put the listing on the MLS and just puts a sign out in front of the property or the agent does put it in the MLS with no information and no pictures. No pictures in my board of Realtors - The Combined Los Angeles West Side - implies a disregard for the sellers since the board will go out and take the picture for you free of charge. The seller thinks they're getting a deal because they are paying a low commission, but a widely cast net (especially in the fast market we had a couple of years ago) would generally bring in more fish netting the seller more dollars... With the low commission rate the agent only makes money if they do both sides. I suppose when they have them on the MLS in some form they're obeying the letter of the ethics codes, but I don't really think they are embodying the spirit of due diligence on the part of their clients.
2) In Highland Park (Northeast Los Angeles), where I live and do most of my work, I used to see a lot of signs from small agencies in front of properties I would have liked to sell my buyers. A search of the MLS systems would not show the property as listed. I'd call the number on the sign and a number of different reactions would result, "The agent is not here, she'll call you back" click. "Ugh, did you want my number by chance?" to the sound of the dail tone.
Or I'd be told the property was in escrow. I'd call title to see if there was an open title order, there would be none. I'd have my assistant call back pretending to be an unattached buyer and miraculously the property would be available.
3) I'd call the number on the sign and the message would be in another language. No messages I would leave would ever be returned.
One time, a few years ago, I even presented an offer to the seller on a property in the last scenario above. I'd sent the agent an offer three days before with no response. After consulting my Broker and the California Association of Realtors Legal Advisor, I felt that I was within my rights to present the offer directly to the seller. I'd sent the listing agent a fax prior to delivering the offer to the owner explaining my reasoning for going directly to the seller and the steps I'd taken to assure that I was within the parameters of ethics.
I left the offer on the seller's doorstep with a note urging them to please do their best. Miraculously, after a mere couple of hours, I finally got a response from the listing agent. He launched into a high decible tirade calling me unethical, threatening to go after my license, threatening to call my broker. I encouraged him to call my broker and invited him to send me an e-mail or a fax explaining his perspective on the situation. More transpired between myself and this agent, much of which I've kept in writing, but for the sake of brevity, I'll not go into it. At the end of the day my stress level and blood pressure skyrocketed and my client didn't get the house.
Lesson learned - know the players in your transaction. A good deal doesn't just mean a good location and a great price. It also means a smooth transaction with cooperative agents.
I know that double popping is a touchy issue for many agents. Perhaps I'm missing a perspective that could provide more clarity. But, I think I'm going to continue with my policy of referring buyers for my listings to other agents for my own peace of mind.
Insights from others would be greatly appreciated..
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You can't work in the best interst of BOTH clients. You just cannot do it....
How can you maximize the profit for seller and minimize price for buyer at the same time?!?!?!