Bad Words!! Dual Agency!! Bad!

DEBRA, I have been on both sides of the transaction and I just don't find it a comfortable place for me.  I don't really feel like I am totally representing anyone but that is just me.  I have an odd one going on right now where a buyer has a real estate friend in Dallas helping him so I'm on the seller's side and the buyer is basically representing himself; with the help of this friend.  The objective is to get the house sold and so I guess whatever works.

In California dual agency is technically the same brokerage representing both sides of a transaction. For larger firms, such as Coldwell Banker, where we have multiple offices, you have a dual agency if different agents from the same brokerage (yes, possibly even different offices) represent the buyer and seller.

When an individual agent represents both the buyer and seller then they are double ending the deal. While I've seen many agents that can do this well, I prefer not to handle a transaction in this manner. I have a partner (Peter Wolf, who you may see often on AR) who is available to represent a buyer for my listing or visa-versa. We don't co-list properties, so that we can give our buyers and sellers personalized attention.

 

Hi Deb...If you were in a company merger would you want the same attorney as the other company?  In a divorce case would you use the same attorney as your spouse?  Maybe yes, maybe no.  [These are questions for all of us to think about.]

Sometimes things start out very smoothly, however, we are never sure when a problem may arise.  Many of us have successfully done dual agency.  And now, many of us are re-thinking whether that is the position we want to be in. 

That is where I find myself.  When I take listings now I tell the seller I prefer not to do dual agency.  I am more than willing to show clients the property but if they express a real interest and want to move forward with an offer I turn them over to a designated representative in my office.  The amount of time I worked with the clients has some bearing on the referral fee.

It seems that many complaints against REALTORS® deal with agency.  Here is just one article that addresses this.

http://realreading.blogspot.com/2007/07/nar-legal-scan-highlights-agency-and.html

I'm glad you brought this up again Deb, as it is something we have to carefully consider.

Kate

 

Hiya, Deb

I know from talking to oodles of folks that a great many of them HATE dual agency.  It's the devil's real estate some will say.  We can't possibly represent both sides.  I agree to a point that a good many folks can't handle a dual agency situation.  I'm talking one agent handling both sides of a transaction, btw. 

I've done many dual agency transactions over the years and found them to be the easiest transactions I've ever done.  Are they always smooth?  No.  There are issues that inevitably come up but the mechanics of the transaction are much, much easier.  My hand is on the controls... No one to chase down for questions, missing documents, etc. 

Now, people will be people and emotions will override common sense at times.  That said, there are just some things you simply can't repeat.  Confidential information is just that... confidential.  If you were working as a buyers agent, the odds that you would ever be exposed to any confidential financial or motivation issues relating to the seller is slim to none.  So, what's the difference if you hear it in a dual agency capacity.  It's a privileged conversation.   Period.  The buyer is no better or worse off for not hearing information they would have never heard anyway.  

Not everyone will be comfortable with it and that's fine. If we remember all we ever do in a transaction is follow the lawful instructions of our clients we would be fine.  Too many people forget that and that's where trouble starts.  That's my .02 worth anyway.

 

 

Dual Agency is by no means the evil that some people attempt to insinuate.  Whenever I hear an agent bad mouthing people that work both sides of the sale I wonder how "honest" they are with their single sided deals. 

Debra, we have "dual agency" in MI. I have done it, but not any more. I now give the buyer to my buyer agent. My team does not know anything about my sellers, their motives, "have to have price". It works better for me. Do I think it can be done? Yes. We also have designated agency and therefore the listing can be held in our company and the buyer agent work for the company and each maintain their fiduciary responsibitly to the company they are with.

I have sold many of me own listings and never had an issue. Its all how open you are to both parties involved.

Like a double edged sword, so can dual agency become. Those transactions can be the "easiest" you have all year and they can also become the landmine that turns into a referral file. 

The problem is perception. Everyone perceives the situation differently. And though you may uphold all legal and moral obligations, should one party not "perceive" it that way... you find yourself smack dab in the middle of a a snake pit.

Generally, full disclosure and honest sincerity will keep you out of bad situations, but not always. It doesn't help that there are those who have exploited these situations and thereby tainted the overall perception of dual agency. Because of this most people are apt to believe the worst rather than the best... again it comes down to perception.

Just a thought.

Melanie

 

 

 

Melanie has a point about perception. It can be difficult to overcome. For those buyers that aren't comfortable with the concept we just don't go there.  I happily refer them to other agents to represent them.  Full disclosure and honesty will almost always keep those perceptions at bay... at least it's worked thus far. 

Deb, Louisiana allows dual agency (me representing both buyer and seller on the transaction), but I don't like it.  I give more than 100% to my clients and just don't think that I could do that if I was walking a tightrope trying to find that line in order not to cross it and get myself in legal hot water.  I'd rather work with one side and refer the other out if need be than ever have a client think that I am not completely on their side and doing all I can for them.  I've done dual agency on just a couple of deals in my career and it was the most uncomfortable I have ever been.

I believe you either are honest and deal from a point of integrity or you don't regardless of the situation

Yes, i suggest against it unless I am the dual agent because I can't say if other agents will handle it right. But yes honest agents can do a great job with dual agency and the transaction can actually go even better as far as communication and coordination goes.

TN also has dual agency, I have never done it. I have been facilitator for both sides on several occasions, and being able to say that I am not the agent for either side eases my own worries and seems to ease the clients. I have two minds on dual agency, the first is what you said, why can't we be honest and give each client the best advice. The other says you work for whomever is paying you(although technically that would mean the seller) and being the actual agent for both sides would be a conflict. I guess maybe a case by case. I just am not comfortable, even facilitator is so close to the line sometimes...

Deb, don't get me going on this one, I'll be up all night again.  In 32+ years, and man thouslands of transactions, I've only been in one law suite (yes I knocked on wood), and that was one of the most stupid suites in the history of mankind, and got settled because my E&O made me, or I would have won.  I should write on a blong on my one law suite after all the years and all these sales.

Bottom line, be honest, treat others as you would want to be treated, and there is no earthy thing wrong, or bad about helping someone who wants to buy a home that another humon being wants to sell>  Liz