Real Estate Agents Practicing Dual Agency- Legal but is it Always Ethical?
Last week, I received a call from a prospective buyer who was calling about one of my listings. After a few questions, I asked him if he had a Realtor that he was working with. He replied no and said he only works with the listing agent and wanted to know if I would represent him. I told him I had no problem with that. I did ask him why he only dealt with the listing agent as there are many experienced agents in the community who could clearly represent him. He said that was his practice and the agents always made sure he got the deal. Really I said!
On that particular listing, I received 15 offers and several were offers I put in for the buyers. I prepared a chart to give to my sellers and had a column showing who the other agent was and my name was clearly displayed for two of the offers. Plus I pointed out to the sellers that I had submitted these two offers here since I wanted my sellers to be totally aware.
After going through the 15 offers, the sellers picked 2 other offers other than my dual agency offers. which were both cash offers and way over listing price; one to accept and the second one as a Back-Up. When they asked me which one I thought they should take, I concurred that the top cash offer was probably the best one to take. Here I am wearing my ‘Dual Hat’. I pointed out to the sellers that even though I also represented two buyers, their offers were not the best.
Of course both buyers are mad and feel I should have been able to secure the deal for them. Even if that had been my intentions, only one could have gotten the deal anyway so someone would have been mad! I am sure these buyer(s) thought I would convince the sellers to take their offer. But why would they think that? Do they think I am a greedy Realtor who only thinks of double ending the deal and getting twice as much commission? One buyer even called me up and pointed out “If you had picked my offer, you would have made more money”. Yes, I said but your offer was not the best for the seller and I represent them too. And I reminded him that it was the sellers choice which offer they took and the cash offer way over listing price was definitely the best. I reminded him that his offer was for a conventional loan and if the property had not appraised for that price, he would have been requesting a reduction in price. “Well yes of course” he replied! So common sense says the highest cash offer is probably the best and. Another consideration was the intent of the buyer; to move into the property vs. a buyer purchasing as an investment. He hung up disgusted and felt I should have disclosed to him the highest price so he could have beaten it. And even if I had done that, he would not have been able to bring cash to the table so his offer was not the best…..
I am aware of some banks not allowing their REO agents to handle both sides of the transaction. Is that a clue that the bank thinks the agent will not submit all offers and only send a low ball offer from one of their buyers therefore cheating the bank out of a higher selling price? Was this rule made because they discovered unethical practices by agents?
*So my question here is “Should I disclose what the top price is the buyer(s) I represent and systematically cut out all the other Realtors who showed the property and submitted offers for their buyers?” I say no that is not ethical and I am a highly ethical Realtor. I tell my buyers to submit their absolute highest offer as the sellers may choose not to ‘counter’ the offers which was the case here.
NAR says it is clearly legal to represent both sides called ‘Dual Agency’ so if it works out, I am happy enough to receive a higher commission but will I do unethical things to create that situation? The answer is no; I will not.
Sitting at my desk after the conversation, I pondered over his comments that he thought I would do anything to get the deal for him and that is why he always chooses the listing agent. When I told him I knew of several other properties he might be interested in, he said “No that he would find the properties himself and have the listing agent represent him instead! GOOD LUCK I said…………….
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Kristin Hamilton DRE #01492138 Keller Williams Realty –I am a full time agent and deal in all types of real estate transactions. Trusts, Probate, Short Sales, Standard Listing, Single Family Homes, Apartments 1-4 units, Duplexes and Condos. I am also an experienced REO agent. I sell real estate in the Riverside, San Bernardino, Orange, and Los Angeles Counties. I am a trained and experienced Short Sale agent. If you are looking for a professional and experienced agent, I am just a click away. Google me at Kristin Hamilton-Real Estate Agent. Homeowners and Buyers both will find my services top notch and successful. Call me to sell your home; both traditional and short sales.
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