Gary, thanks for being the first to comment on this.  It looks like you are okay with dual agency.  In California it is allowed and I am glad you have had no problems with it.  How is it in Nevada since you are on the border?

Deborah, I am assuming that dual agency is not allowed in Washington.  Is it allowed to get a referral fee in this situation?  The practice seems different in my market place in California.

I am going to edit and add to this blog a list of states and if "dual agency is allowed".

Ki, I understand that dual agency can be messy and it is like walking a tightrope.  Does your state allow dual agency or not? 

 I will post your response in the main blog above.  Thanks!

Jesse and Kathy, so there is no "agency" which mean you have no fiduciary relationship to either party?  I just need a little clarification on that.  Okay so you work with both, but only represent one as a client and the other as a customer.  If you are doing about 8-10 transactions a year where you have both the buyer and seller, you are doing good volume.  Good job!

It seems to me that it goes back to disclosure and if the buyer and seller feel comfortable with the representation being provided.  Thank you for you comments.  Please clarify what is Alaska's position on dual agency so I can post results on main blog.  Thanks again.

Jennifer, so it is illegal to do perform dual agency in Alabama.  I will record that on the blog.  When there is heavy negotiating being done there is always stress involved.  Best wishes on your future transactions!

Eric, I don't know how it is in other states but in California, dual agency is permitted and most of the E&O insurance carriers allow it.  You do, however, need to have the proper disclosure to both the buyer and seller letting them know how they are represented.  We have to pay the E&O insurance for both sides of the transaction.  Thanks for your comments.  I would like to find-out if other states have problems with E&O insurance coverage on dual agency.

Charles, I appreciate your position on the matter.  You are welcome to post the links to your other blogs on this matter.  It might open up and clarify this issue more.  I have to say that most of my sellers expect me to bring a buyer and sell my listing myself.  I have a long conversation about his when I take a listing.  If they do not want me to represent a buyer on their listing I would comply, but that has never happened to me in 16 years in the business.  By the way, is dual agency permitted or not in Virginia

Is this a matter of culture or expectation?

Erby, good comment and I appreciate your feeling about dual agency.  It is a touchy subject amoung real estate professionals and clients.  You seem to know a lot about agency, have you delt with this a lot as a home inspector?  Do you really think an agent can not fully represent a client as a dual agent?

Gail, thank you for your comments in the long discussion on dual agency.  I live and work in communities where there are thousands and thousands of agents and dual agency is done all the time. 

I must ask the question; "what is the definition of representation?

Can you represent a client and not be just a paper pusher? 

Can buyers and sellers be savvy enough to tell you what they want without you having to guide them too much in the transactions?

Elizabeth, I believe your real estate practice is the same as my company.  My experience in Northern California is that dual agency is looked upon as a good practice not just from agents, but from buyers and sellers.

As I had stated above, my sellers expect me to find a buyer to seller their listings.  I also have buyers who only want to work with listing agents and not just a buyer's agent.  It must sound strange to some of you in other states where it is not allowed, but my experience is it works just fine as long as you fully disclose how dual agency works.

The negotiations are different because of dual agency.  I call negotiations "the game" because if you only represent one party you play "the game" differently as if you represented both parties.

Elizabeth, what do you tell your clients when you list a home or when you work with a buyer?

The All Pro Team, thank you for your comments and the info on dual agency in Florida.  I think I asked you this question about dual agency in another blog, so thank you for posting it here.

Deborah, thank you for your comments.  Yes, if an associate is representing a buyer and another associate from the same brokerage is representing the seller, it is considered dual agency.  The true agent is the broker (either an individual or corporation).  I am looking forward to getting a list together which states allow or disallow dual agency.

Bob, I appreciate your feeling and respect your preference to not do it.  I myself have had much success in representing both parties in dual agency.  I have never had a problem but I spend a good amount of time telling them how it works before we go into negotiations.  I think how you layout the negotiations will determine if there will be a conflict of interest or not. 

My clients have always felt that I represented them well even if we did not have hard psychological negotiations.  I tell them to put forth what they want in writing and I would present it to the other.  If we can find a good happy meeting of the mind we have a deal or we walk away from it if it does not feel right.  I encourage them to talk strait and no games. I let them know that they are the boss and I will only do what they ask me to do if it is right and fair.

Deborah, I noted your comment on Washington's position on dual agency in the main blog.  Thanks for your info!

Erby, thanks again for your comments and the link.  It is cool that it spells out dual agency guidelines for your state.

Lisa, I noted the info about dual agency being allowed in NJ.  It is too bad that you had a problem with your deal regarding dual agency. 

What do you tell your clients, both the buyer and seller about the agency relationship?

Do you use a form provided by your board of REALTORS?

Larry, you are correct on the matter that a buyer can choose to be a customer and not be represented by an agent.  So, to spell it out, an agent has these responsibility:

Client = Fiduciary Responsibility

Customer = No Fiduciary Responsibility, but to be treated honestly and fairly

Jesse & Kathy, James, and Bob, thank you all for commenting on this blog.  There is a lot of difference of opinion on this issue and we have to remember that it is something not to be taken lightly.   We also need to consider what is allowed in each state.  I have been in the business for some time now and I had not really know that there is so much difference of opinion on this and that each state has different laws regarding client representation.

Check out California's Agency Relationship Disclosure:

http://www.sanjoseproperty.com/includes/article_agency.html

Here are some highlights from the disclosure I give from the California Association of REALTORS form:

When you enter into a discussion with a real estate agent regarding a real estate transaction, you should understand from the outset what type of agency relationship or representation you wish to have with the agent in the transaction.

The above duties of the agent in a real estate transaction do not relieve a Seller or Buyer from the responsibility to protect his or her own interests. You should carefully read all agreements to assure that they adequately express your understanding of the transaction. A real estate agent is a person qualified to advise about real estate. If legal or tax advice is desired, consult a competent professional.

Throughout your real property transaction you may receive more than one disclosure form, depending upon the number of agents assisting in the transaction. The law requires each agent with whom you have more than a casual relationship to present you with this disclosure form. You should read its contents each time it is presented to you, considering the relationship between you and the real estate agent in your specific transaction.

This disclosure form includes the provisions of Sections 2079.13 to 2079.24, inclusive of the Civil Code set forth in the next section.

Read it carefully.

We have to remember that the clients make all of the decisions.  I tell my clients that they are the boss and I just help them understand how things work and to provide information needed. 

In dual agency you can not tell the other party the bottom line price or information about the other parties motivation unless expressly authorized by that party.  In everything else you are suppose to provide:

A fiduciary duty of utmost care, integrity, honesty, and loyalty in the dealings with either Seller or the Buyer.

1) We still can provide a buyer a competitive market analysis to show what other properties are selling for.

2) We still can provide the buyer an opportunity to do a whole house inspection to check the condition of property.

3) All disclosures still need to be given to both parties.

4) All material facts still need to be disclosed.

5) As an agent you still have to do visual inspection of property and disclose any know defects.

6) You can still provide all the benefits of the property to the buyer in order to show property's value.

7) You can still provide all the information on how things work in real estate so you can educate your clients to make the decisions that they need to make.

Here is a question:

Can you still provide good service and representation for both parties?    A Win/Win?

Deborah, I really do appreciate your heart felt tough on this matter.  I would never want anyone to go against their conscience on any matter.  I think if we have integrity and true desire to help people, we would not do any deal that would cause us to feel like we are compromising our beliefs.  Money or the deal is not worth it.

If I could not perform my duties and responsibilities for my clients as follows:

"A fiduciary duty of utmost care, integrity, honesty, and loyalty in the dealings with either Seller or the Buyer."

I would walk away from the deal without a question myself.  Our integrity and having a clear conscience is more important.

Deborah, that was the best compliment I have received here in AR.  Thank you!

Erby, great question and comment!  I want to respond, but I should take some time to formulate a response when I am not so tired.

Larry, I love your comments too!  I will try to respond by tomorrow!  It has been a very long day for me.  Thank you and good night!

Erby, I want to thank you for bring great points and ideas to this discussion!  I totally respect your position and I am not really trying to change your mind.  I think iron sharpens iron and the discussion has been very enlightening for me.  This topic is more heated then I had previously thought, but this group of people so far has brought out great points of view to consider.  And Erby, I really appreciate your complement too!  It is much appreciated, but I must say that you all need to be given the credit for the content of information you are bringing to this discussion.

I just want to remind people we all have to consider the rules and laws that we have to follow in our own states and markets.  So we must understand we will all not agree or come to the same conclusion for many reasons.  But it is a good mind stimulating conversation that I am enjoying greatly.

Now, I want to just comment on the "best" service to your client.  I think the "best" service depends on what the clients needs are.  I will concede the point that it is hard to serve two Masters, but you can if they are both agreeing together on what they want you to do.  Now my point is this, if they both want the deal, and if they are willing to find a mutually acceptable price and terms, then your job is to just facilitate the deal.  I have seen so many agents get in the way of the client and take over the decision making when we are just agents.  I do not make the decision at all.  I tell them that upfront.  Many of my clients want me to make decisions for them, but I would be over stepping what an agent does, if I did that.  My job is to bring the best information, guidance, and counsel in closing their transaction.

I would say if the goal is to "steal the deal" or "get over" or "take advantage" of the other party, then I would agree that you can't serve two masters.

Let me end with these question you have to ask your clients and yourself:

What is the goals of your clients?

What is your roll in this situation?

Can you help both or should you advise them to walk away from it?

Erby, just my toughs, but maybe I left you more questions then answer.

I will try to answer the other comments soon!  My business has really been picking up and I have had to spend more time on it these past few days.  I just pulled a 14 hour day working. Thanks for your patience!

I have to tell you all that I have been very excited to read and think about all that you are commenting on.  It really has been very stimulating for me and I hope for you.  I have been very busy this last week with business (new transactions) picking up with my company and bring on so many new agents.  I appreciate your patience with me getting back to your comments.  I will try to answer your comments in the order they have come in.  I welcome some of you to help answer or respond to comments that you feel you can comment on.  I am sure we have others here who can help moderate this discussion.  I hope to get all 50 states stance on "Dual Agency" and other countries too.

I feel I need to join the Active Rain Addicts group because I find myself reading your comments on my cell phone in between appointments.  It is just too time consuming to try to respond from the cell phone so I have to wait till I get home on my computer.

Larry, I agree that many agents are not aware of how agency works.  I do sales meetings and classes with my company that goes over these subjects.  I have had other associates come from other companies who had not been properly trained on agency and how it works.

In California, the agent is technically the broker like you said.  The broker could be an individual or a corporation (no LLC or LLP is allowed in California) licensed by the California Department of Corporation.  A real estate agent (aka: associate or licensee) has to work under a broker.  An associate can initiate the services of the broker or brokerage to a client (buyer or seller) with a contract.  The client technically is doing business with the broker or brokerage.

When you have any two associates working for a broker or brokerage doing business with clients on the same transaction and has an agency relationship is considered dual agency unless defined in writing differently.  We in California need to disclose agency relationship before or when we write offers or take listings (sellers or buyers or property).  There is also a confirmation of agency in writing to disclose how an agent or agents are represent clients.

I think it is important and imperative that agents handle this correctly.  I believe more education is needed in the industry.  As it is now, the broker or brokerage is responsible to educate associates to the correct practice.

Jesse & Kathy, could you please give us more information on how abrogated common law agency works.  What is the difference because it is still unclear to me. 

Maybe some of you who are in states that have an abrogated common law agency or states that do not allow dual agency to explain how the system works in your states.

I will continue to work through the comments, but this is something that came to mind as I was reading Jesse & Kathy's original post.

Karen, I am looking forward to learning more about what transactional agency is all about.  Do you personally practice dual agency right now?  I appreciate you reading and commenting on my blog!

Deborah, thanks again!

Erby, I think you should go into law because you have a good logical mind.  :)

Okay, I agree with your statement that some buyers and sellers who are "experienced" can handle themself and just need a facilitator.  But I have to say that it is just one part of the whole package we provide as an agent.  There is so much more an agent provides a buyer and seller than just facilitate or negotiate.  Agents who work well for their clients deserve their commission and even more in this market.  We wear many hats and need many different skills, but ultimately we need to get the job done that our clients want us to help them accomplish.

I also agree with your statement, "You are an adviser, not a decision maker."  I know clients want us to make decisions for them, but it is not our place as agents.  Regarding clients needs, "guide me, advise me" we still need to and we should, just not telling what the price, terms, and motives, unless authorized to, and sometimes we are told to tell.  Some times price is not the most important thing to a buyer or seller, some times terms, speed, and finding a win-win is more important.  There are many different situations and we need to be careful how we handle each situation. 

There is no one way to deal with clients in these situations except "A fiduciary duty of utmost care, integrity, honesty, and loyalty in the dealings with either Seller or the Buyer."

Caveat Emptor = "let the buyer beware." (Latin)

The buyer should examine the goods and/or property and buy it at his own risk, except for latent defects.  In California we practice "Full Disclosure" even in "Dual Agency".  We still have to disclose any material defects or material facts know or discovered during a transaction.  Seller's who hide know defects from buyer can be subject to legal suites.  We can not hide known defects or facts even if the seller tells us not to disclose, we have an obligation to honest business practices.  We can not hide behind "Caveat Emptor".

I will make this statement again, "I will not do dual agency when I can not have integrity and clear conscience!" 

Erby, I hate the fact that I always get busy when I am enjoying the discussion!

Jeff, I agree with your statements fully!  I think the point that you made who determines if "Dual Agency" is ethical or not is the client.  They have to choose if they are willing to have that kind of representation.  I like the disclosures and pamphlets that are given to consumers.  I like the pros and cons being stated and disclosed to the consumer.  I appreciate you providing the links to the disclosures and pamphlets, it is helpful.

You like, Erby, have provided good information that has been helpful and enlightening!  You have the education and you provide this kind of training.  You should help us moderate this conversation.

I want to apologize to everyone watching this blog.  I am getting behind responding to everyone's post.  I will try to catch up.  You all have put out good thoughts that takes time for me to process.  I will use my age to try to get an excuse for lagging, but I know it will not work.  LOL

So, keep posting comments and I will try to keep up.  :o)

Jason, in California, you are allowed to give and receive referral fees.  And yes, it is dual agency when two associates working for the same brokerage who represents two or more different clients on the same transaction.  It is good practice to give Agency Disclosure Statement to all parties involved immediately.  Thanks for commenting.

Georgina, I think the practice is very similar between California and Hawaii.  We have more Fee Simple transactions vs. Lease Hold.  Thanks for commenting and I invite you to help me moderate this discussion.  :)

Kathleen, I appreciate your thoughts on this matter.  It is good to know that Virginia allows it, I think one of your fellow agents has commented on that too.  I totally respect your position of not doing dual agency even if it is allowed there.  It is a tightrope and you really have to becareful how you do it, as to not get yourself nor your clients into legal trouble.  I agree with you on the points you put out there as questions:

It all depends on......................

1. Does your state allow it
2. Do your sellers agree to it, and
3. How you feel about it.

Thanks again for taking the time to comment here.

Matthew, thanks for your input and your thoughts.  It has been good to see people's persective on this subject.  Take care!

Sheri, I have posted the information about South Carolina allowing dual agency.  I appreciate it very much and we are half way in getting the statistics on which states allows it or not.

Krista, thank you for your comments and for putting your input into this discussion.  Dual agency happens a lot for my company, too.  It is because we have many agents with listings and many agents with buyers, so, it is common to see them write offers on the properties we have listed.  We have to give disclosures and the options as to dual agency.  Thanks again!

Jeanean, your information has been helpful in showing how your brokerage handles the situation with dual agency and how you personally deal with it.  Thank you for that.  It is challenging to make sure you take care of your clients especially when we are used to "playing the game" of negotiating the best deal for them.  I will be putting out a blog on "playing the game" shortly.  Thanks again for your input!

Larry, great input and great point.  A brokerage needs to have an office policy to begin with to make sure the correct practices are documented.  And the brokerage needs to make sure sufficient training and supervision is given.  In most states if a broker does not properly train and supervise associates, the brokerage could lose license or get some sort of penalty.  Good input.

Natalie, your positron is duly noted and appreciated.  You need to do business with a clear conscience.  Would you expand on how the process of "Designated Rep" to us further.  I think I understand it, but how do you practice that there?

Erby,

I have made the change now so it will be easier for people to check states.  Thanks again for putting them in Alpabetical order!

Here is my old list to record how it used to look.

List of states/countries - what is the practice/law:

1)  California - dual agency is allowed

2)  Washington - dual agency is allowed

3)  Kansas - dual agency is not allowed

4)  Texas - dual agency is allowed

5)  Alaska - abrogated common law agency, but dual agency is allowed

6)  Alabama - dual agency is not allowed 

7)  Virginia - dual agency (TBD)

8)  Kentucky - dual agency is allowed

9)  Florida - dual agency is not allowed

10) Hawaii - dual agency is allowed 

11) New Jersey - dual agency is allowed 

12) Washington DC - dual agency is allowed

13) Virginia - dual agency is allowed

14) Maryland - dual agency is not allowed

15) Rhode Island - dual agency is allowed

16) Louisiana - dual agency is allowed

17) Massachusetts - dual agency is allowed

18) Oregon - dual agency is allowed

19) Minnesota - dual agency is allowed

20) North Carolina - dual agency is allowed

21) Arizona - dual agency is allowed 

22) Pennsylvania - dual agency is allowed

23) South  Carolina - dual agency is allowed