When a prospective buyer attends an OPEN HOUSE, at what point does the agent holding it start talking about "agency"? This is most important to you, the buyer, because you need AN AGENT WHO HAS A FIDUCIARY RELATIONSHIP WITH YOU.
Before you "show your hand", meaning how much you like the home and might want to make an offer on it, you need to know if this agent is working for you or against you.
IF HE IS THE LISTING AGENT OF THE SELLER, HIS FIDUCIARY RELATIONSHIP WILL BE WITH THE SELLER.
So here is what can unintentionally happen:
The opening words from the agent will (or should be):
"ARE YOU REPRESENTED BY AN AGENT?"
If you DO have an agent you are working with, say so and GIVE HIS/HER NAME. Congratulations, YOU ARE REPRESENTED BY SOMEONE WHO SHOULD NEGOTIATE FOR YOU, BECAUSE THEY HAVE A FIDUCIARY RELATIONSHIP WITH YOU.
If you don't have an agent you are working with, you are now considered an "unrepresented buyer", and the agent has a chance to "double end" the sale of the house you are viewing. Oh goody for that agent, but here's the thing:
AT THIS POINT THE AGENT NEEDS TO TELL YOU AT LEAST ORALLY ABOUT "AGENCY", WHOM HE/SHE REPRESENTS.
AND IT ISN'T YOU, the agent represents the SELLER and that means, any favorable negotiation lands on HIS side of the fence, not yours.
THINK ABOUT THIS.
Many buyers believe that ONLY THE LISTING AGENT can give you THE BEST DEAL when purchasing a home, because he/she is "in touch with the seller" and will negotiate on your behalf.
THAT IS JUST NOT SO,
The listing agent BY CONTRACT represents the FIDUCIARY INTERESTS OF THE SELLER.
If this is not explained to you by the agent,
AN "INADVERTENT DUAL AGENCY" HAS BEEN CREATED,
AND IT IS AGAINST THE LAW.
Many law suits have been filed because of this (possibly) unintentional, "accidental" Dual Agency that can come about in many ways, during an Open House being one.
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Information for California Real Estate Brokers and agents:
Blog 1: Continuing Education to Renew CA Broker's License.
Blog 2: What a Brokerage has to have available in case of a DRE Audit.
Blog 3: Don't give inadvertent Legal or Tax advice to clients.
Blog 4: Inadvertent Dual Agency is against the law in California.
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