Designated Agency... Is it right for the consumer?

Kevin,

I don't touch a dual agency situation with a ten foot pole. I can't believe it is still permitted legally.

Sandy

I am a member of a large brokerage and we do practice designated agency. I feel it would not be right to my clients to not be able to sell them a home just because another agent who may not even be in our office, but still the same brokerage lists it.  It also would not be fair to my sellers to exclude everyone from L&F.  I see no problem with me representing my particular client and another agent representing theirs.  Customer normally hire an agent, not a broker.

This is not dual agency, that is why it is called designated.

Not sure I am an advocate for Designated agency. Not sure how that could possibly be good for the consumer. You can't be a coach for both teams.

Kevin,

Part of what your struggling with may come from your own question. " I don't understand why a lawyer can't represent both parties but realtors can. "

Lawyers are often adversary's. Where as dual agents are more like facilitators. In fact as a dual agent you often times help diffuse tense situations by not injecting over zealous agents trying to out best the other side.

In Washington State we can be duel agents and our contracts are written to point out who you are working for and we also have agency law handbooks that have to be handed to the client and we even have a page in the contract that they sign saying that have gotten this book.

I will say however that I don't like to practice dual agency because of the problems that can come up.....usually however when I become a duel agent I know that both clients are getting a pretty good deal as I when I take a listing I state and have an addendum that gives the seller back a portion of the commissions so I am never keeping the full commission so in this way I feel I am treating the seller right and they usually in turn treat the buyer right.

In over 10 years I have not yet had a problem and knock on wood I will never.....

That's my two cents

Todd Hueffed

In Georgia this has been an option for years and at first I was apprehensive about it as well, but now it's the norm.  Our office offers both dual and designated agency.  First of all I believe that when you list a house the client has hired you to sell their house, so if you can not  act as a dual agent how can YOU sell their home?? 

And we explain agency to our clients when we list their home.  So I can't tell you what to offer or what to counter if I'm a dual agent... I still can provide you with a CMA to let you make an educated offer or counter.

And if a client is at all uncomfortable with it we give them the option of designated agency where as two different agents who agree and follow through and do not discuss their clients of the situation represent the different parties.

As a back up we also have a friendly competitor that we love and trust that we send the buyer to and he does the same if either the buyer or the seller are not comfortable with dual or designated agency.  We've only had to do this a couple of times it works out great.

Kevin,

I do not meen to give the impression that we are facilitators.Only that we act more like it than a true Single Agency relationship.

In single agency any thing that you find out about the other parties needs are fair game. Often times the other agent will give out that information freely in hopes of protecting an un-earned commission. How does that benefit there client?

This entire game I think can create more ill will in the community than is neccessary. I am a very strong advocate for my client. But I also am a member of the community and human race.

A good deal is where both clients can leave the closing table feeling as if they got most of everything they wanted and are pleased with the process.

If you are against dual agency how would you handle this following situation?

You are working with buyers, they want representation, they sign buyers brokerage agreement on Tuesday and you show them 4 homes.  Nothing they fall in love with, on Thursday you list a home and place it on your web site, Friday your buyers call you back and saw your new listing and really want to see it???  What do you do if you are against dual agency??  Isn't it your obligation to sell the listing?  Isn't it your obligation to still represent your buyers??

While I admit it took me a while to wrap my head around the idea, after years of practicing dual agency I find it's not a problem for me.

Dual agency and designated agency are two different things.

I have not had an instance when I have been a dual agent, however, if I have properly educated my sellers and my buyers, then I believe I can effectively represent both.

I think desiganted agency is a must, especially for large firms. I could not effectively help my buyers find the best home for them if I had to eliminate the ones listed by my brokerage. Seriously, I have worked for two large firms, and there have been agents whom I have never seen, let alone talked to, who worked there.

When I first meet with a prospective client I spend time discussing agency, and then have them sign the state mandated agency disclosure. I point out that as an agent, I really work for the client, not the other agents or the firm, so my loyalty and fiduciary responsiblity is to them. I tell them I will let them know if and when we are in a designated agency situation ("Notice," also required by MA law.) 

Further, I explain that if we ever run into a dual agency situation,  I would step back and be more neutral, and try to make both parties feel good about the transaction. But if either felt uncomfortable with this arrangement, I would find another agent to act as a buyers agent (designated agency) and I would represent the seller. So far I have not had to do this, but it makes my clients feel better to know they have that option.  

Since I keep a home office, and rarely call clients from the company office, that helps prevent any  inadvertent disclosure of confidential information. (I don't know how agents who work in their company's office handle this.)

I think the most important part of agency is to make sure your clients understand it!

I am in the same situation as Deb, I work out of my home office and there is little issue of inadvertent disclosure.  Dual agency to me is a no no...I do not think I could do both parties justice in that situation. In fact, a friend who's home I had listed, told me if I brought in a buyer they did not have an issue with me representing both sides.  I did.  I did get a buyer in and gave them to a colleague (who gave me 50% of his commission).

We allow it here, but I think it's difficult to sign a listing agreement saying you will work for them to get the highest price and then turn around, walk to the other side of the table, and sign a buyer's agreement saying you will work for them to get their dream home at the lowest price possible.

They are mutually exclusive. What do you do when there is a conflict? I have heard that the great supermajority of lawsuits against Realtors here are because of dual agency.

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