How Do Northern Virginia Realtors® Reconcile Dual Agency Against the Realtor® Code of Ethics?
I spent my morning in a class on the subject of agency and changes to the dual agency statutes in the Commonwealth of Virginia. This is a subject that really fires me up. I honestly have no idea how any Realtor® licensed in Virginia can think they are truly representing the best interests of their clients, over their own financial best interests to earn two commissions, if they are practicing dual agency by the letter of the law.
By the Realtor® Code of Ethics, Realtors® are bound to "protect and promote the interest of their clients. This obligation to THE CLIENT is primary."
Seems simple enough. So what would protecting and promoting the interest of a client be? Would it include advising them to acceptable terms and price, as compared to market comparables, when a Buyer is writing an offer on a home? Would it include a Seller on what a fair counteroffer to a Buyer's offer would be? To me, it sure seems so. Then again, I am pretty up front with my Buyers and Sellers as to what my duties as their agent include when they list and buy property with me.
When entering into a dual agency relationship, that agency relationship that was created when they hired me, where I would be obligated by the Code of Ethics to promote and protect the best interests of my client, is severely compromised in the interest of me "representing" both parties.
According to our state statute, real estate agents conducting dual agency, are "unable to advise either party as to the terms, offers or counteroffers.........The licensee cannot advise a buyer client as to the suitability of the property, it's condition (other than to make any disclosures as required by law of any licensee representing a seller) and cannot advise either party as to repairs of the property to make or request." The law goes on to state that, "The licensee will be acting without knowledge of the client's needs, clients experience in the market, or clients experience in handling real estate transactions."
The only exception to this lack of knowledge and not giving advice is any information exchanged PRIOR TO THE COMMENCEMENT OF THE DUAL REPRESENTATION. Once that dual representation comes into effect, what you really have is something that resembles, in my own opinion, non-agency where neither party is represented by an agent. The agent can not further advise either party.
So who's best interest is at heart when dual representation is conducted? Is it really the buyer or seller? Or the Realtor® who gets to collect two commissions for not giving advice?
Oh, and by the way, when asking the attorney what exactly is changing in Virginia's dual agency laws in July 2012, the answer was simply the written disclosure that spells out what we can't do as agents in dual representation. Those limitations exist now, the clients just aren't being disclosed about it in writing.
If you are looking for true buyer or seller representation in your next Northern Virginia real estate transaction, let me know. I wouldn't touch dual agency with someone else's real estate license, let alone my own.
Chris Ann Cleland, Associate Broker-Licensed in Virginia, Long & Foster REALTOR®