The North Carolina Real Estate Commission allows what is called dual agency.  This is a fairly complex concept that agents must explain to their clients when beginning a relationship with them, and even have them sign a brochure giving the broker the right to be a dual agent or not.  It has its advantages. Mainly, if a client is interested in a listing that is listed with his or her brokers firm, in order to show that listing, an agent must be a dual agent.

What it also allows is for a single agent to act as representative for both buyer and seller.  What? Yes someone who is representing both the buyer and seller, and trying to negotiate the best deal for both. The argument exists that it is not really possible.  I equate it to a lawyer representing both husband and wife in a divorce. Most likely, that person feels more of an allegiance to the person who hired them and is paying them.

When an agent represents both buyer and seller in a transaction, it can happen in one of two ways. They can have a house listed, and someone calls on a sign or through advertising on that particular property and the call comes back to that agent, he or she shows the house and the transaction happens.  In this case, the listing agent has had a relationship with the seller and a very limited one with the buyer but is supposed to be working for both in an equal capacity. Furthermore, the agent’s compensation is coming from the seller’s proceeds on the sale. Can this person really represent both participants to this transaction in a fair manner?  Most realtors who are put in these situations do to an extent, but it is a hard position to be in.

In another scenario, an agent may have been working with a buyer for awhile and puts a home on the market that is exactly what this buyer is looking for.  The house is shown, and the transaction happens. In this case, the agent and buyer have a closer relationship but the agent is a dual agent, supposedly representing the seller and buyer equally and again, the argument can be made that it cannot be done fairly.

Dual agency in North Carolina spells out exactly what information can be passed on to buyers and sellers and what information cannot. The commission is very strict with the rules of dual agency and agents know that, and therefore, most times, abide by these rules.

The problems can arise when an agent knows something about a buyer or seller that can have an effect on the negotiations, but they are not allowed to pass on that information. Let’s say that the sellers agent knows the home is about to be taking by foreclosure, and that the seller will take significantly less than asking price.  They cannot give this information to the buyer, and therefore, they are really not working to get the buyer the best deal.  If there were two separate Realtors from two different offices, and the buyer’s agent had some information about the negotiating position of the seller, they should and would relay this information to their buyer, in order to help them negotiate the best deal.

While dual agency is legal, and it happens quite often, as a buyer or seller, you want to make sure that you do not get yourself into a situation where the same agent represents the buyer and seller.  Dual agency is also when different agents at the same firm represents the buyer and seller respectively. This is because, technically, the listings are the property of the firm, not the individual agent, and therefore, because the same agency is representing both buyer and seller, they are practicing dual agency. This happens much more than one agent representing both buyer and seller. In my opinion, there is nothing wrong with this type of transaction as there are two separate people acting in the best interest of their clients. This type of transaction occurs frequently in an area such as Wake County, or for that matter the entire Triangle area as there are a lot of people, and a lot of firms with a lot of Realtors.

In order to avoid having a home’s listing agent act as your buyer’s agent as well, there are things that you can do.  If you are already working with an agent, and you see a sign on a home or an advertisement for a home that interests you make sure that you call your agent to get you information on that particular home. You can be sure that they are working for you. If you do not have an agent, go ahead and call the sign or advertisement and ask for information. Ask the person that you are talking to about the home and if it is their listing. Many times, the lead goes back to the office and is passed out to another agent.  This is fine. Meet the agent, size them up and after a little while decide if you may be able to work with this agent. Most times, when you call on a home, the first one will not be the one you choose, but it may have introduced you to a great agent. Just be careful not to get caught with a seller’s agent representing you in a transaction as a buyer when you have no relationship with them.

I have been an agent in several transactions where I have represented both buyer and seller and it is not easy.  It may be more profitable for me, but there are tons of headaches involved, and I have vowed never to do it again. I would rather give up the dual commission and have less stress in the transaction. The first issue is obviously negotiating price and other contract issues, but it doesn’t end there.

Any time there is something to be worked out, such as inspection or appraisal issues, you are arguing with yourself, and it is a tough position to be in.

Hopefully this has provided you with some insight on what to do if you get into a situation where there is one realtor representing both parties in a transaction.  This can be helpful whether you are looking in the Raleigh area or any other place within North Carolina as these laws are statewide. If you are outside of North Carolina, please check with your state Real Estate Commission for dual agency rules and regulations.