Right or Wrong? Dual Agency - What States Allows It or Not

By
Real Estate Broker/Owner with REAL ESTATE AMERICA - Ernie Cabrera
https://activerain.com/droplet/4rm4

 

REAL ESTATE AGENCY RELATIONSHIPS

 

How agents can represent their clients:

1) Fiduciary responsibility to a buyer

2) Fiduciary responsibility to a seller

3) Fiduciary responsibility to both the buyer and the seller

 

        Okay, it is like walking a tightrope!

DUAL AGENCY

 

Is this ethical?

What is the practices in your real estate market?

Is it possible to really represent a buyer and seller well?

Are you serving your clients well?

 

I NEED YOUR HELP TO COMPLETE THE LIST BELOW, PLEASE GIVE ME INFORMATION ABOUT YOUR STATE'S LAWS ABOUT DUAL AGENCY!

List of states/countries - what is the practice/law:

Alabama - dual agency is not allowed 

Alaska - abrogated common law agency, but dual agency is allowed

Arizona - dual agency is allowed 

California - dual agency is allowed

Florida - dual agency is not allowed

Hawaii - dual agency is allowed 

Kansas - dual agency is not allowed

Kentucky - dual agency is allowed

Louisiana - dual agency is allowed

Maryland - dual agency is not allowed

Massachusetts - dual agency is allowed

Minnesota - dual agency is allowed

New Jersey - dual agency is allowed 

North Carolina - dual agency is allowed

Oregon - dual agency is allowed

Pennsylvania - dual agency is allowed

Rhode Island - dual agency is allowed

South  Carolina - dual agency is allowed

Texas - dual agency is allowed

Virginia - dual agency (TBD)

Virginia - dual agency is allowed

Washington - dual agency is allowed

Washington DC - dual agency is allowed

 

Check out my other blogs on real estate practices regarding "Agency" and other related topics:

What do you do? When a buyer ask you to show your listing.

Dual Agency is Illegal and It Should not be Practiced!

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Rainmaker
77,261
Byron Lewis
Landmark Real Estate - Manhattan, KS
Realtor, e-PRO, ABR, CRS, Manhattan Kansas Real Es

Kai wrote  "unless the dual agency arises with two agents from the same office representing independently the buyer and seller, which is also defined as Dual Agency" 

 

This is called designated agency in the state of Kansas.  The broker takes a position as a transaction broker and a licensee represents the buyer as a designated buyers agent and a second agent represents the seller as a designated sellers agent.  The managing broker cannot represent as a designated agent in this situation.

I also like Moriahs analogy.

Feb 04, 2008 08:06 AM #108
Rainer
23,580
Kai Lani
RE/MAX Kai Lani - Kailua, HI
RE/MAX
Actually Byron, that is what we tried to get into the Hawaii State Code.   If at first we don't succeed, try try again, but now I am no longer on the Legislative Committee for HAR, I will leave that to the able hands of others.   Jerry
Feb 04, 2008 08:10 AM #109
Rainer
11,944
Hank Roeters
Platinum Partners Realtors - Darien, IL
Illinois is a designated agency state. That means that 2 agents from the same office can be in the same transaction without being a dual agent. One agent is the designated agent of the seller and the other can be the designated agent of the buyer. Illinois allows dual agency but it must be disclosed to both sides in writing. Either side can decline dual agency. The sellers designated agent is named in the listing agreement. Dual Agency is covered in the listing agreement and the seller can say yes or no to dual agency at that time.
Feb 05, 2008 10:15 AM #110
Rainmaker
200,219
Debbie Holmes
Gold Key Real Estate - Boise, ID
Gets the job done!
Idaho allows it
Feb 05, 2008 10:38 AM #111
Anonymous
S Ollthoff
Real Estate In Illinois, Dual Agency allowed, However no matter what an Agent tells you about  their ability to conduct a fair and unbiased form of  Dual Agency, consider that the only interests getting satified is that of the Agent. Quite difficult to consider both buyer and seller when considering  the Agent will not close the deal or lose the listing.
Feb 23, 2008 04:39 AM #112
Rainmaker
1,008,363
Barbara S. Duncan
RE/MAX Advantage - Searcy, AR
GRI, e-PRO, Executive Broker, Searcy AR
In Arkansas, dual agency is legal but it must be revealed in writing.  I see no problem with it.
Mar 22, 2008 01:15 PM #113
Rainer
55,707
Doug Fritchie
DOUG FRITCHIE-Silver Legacy Properties,Inc. - Portland, OR
  Great research.... I did not know that all states did not allow dual agency ! I am in Oregon and assumed it was probably the norm....Oops !
Mar 22, 2008 01:40 PM #114
Rainmaker
184,074
Christina Cavins
Irongate Inc. REALTORS - Centerville, OH
www.BuySellOH.com Search Ohio Homes For Sale

Great post! Please contribute to my post on dual agency here http://www.activerain.com/blogsview/579085/The-True-Test-of

Christina

Jul 04, 2008 05:03 PM #115
Anonymous
Linda

My husband and I feel like we were not treated fairly by a dual agency.  We just bought a house in Hammond, LA by a dual agent.  I was wondering if anyone could help me with regards to figuring out if we were treated unfairly or if we were just ignorant and got the raw end of the deal.

We were told that the three hanging swings outside would stay as they were permenantly affixed to the house...that there was no need to mention them in the negotiations.  We didn't get the swings.  The owner took them saying we didn't offer anything for them.

Most importantly, we were pushed to close sooner even though, in order for the prior owner to sell the house, he had to install a new septic system to make it current with regulations (he was grandfathered into the old one).  We were told that if we went ahead and closed, he would put the money in escrow for us and we could go ahead and move in.  The kicker of it was, we couldn't transfer electric to our names until the new septic was installed, but according to our agent, it wasn't going to be an issue because the prior owner would keep electricity in his name until that happened.  Unfortunately 3 weeks later, it hasn't stopped raining and the septic still has not been able to be installed.  The prior owner cut off the electricity on 12/23.  We are going on two weeks now with no electricity and no hope of installation any time soon.

Is all this, our stupidity or do we have a reasonable complaint here?

Thanks for any help or advice you can give me.

Linda

Jan 05, 2009 05:36 AM #116
Rainmaker
41,225
Heather Moriah Martin
eXp Realty - Allentown, PA
REALTOR - Lehigh Valley

Hello Linda!

WOW I am sorry you are going through this.  This is exactly why I advise everyone I know to get a Buyer Agent.  Having the same Real Estate Agent on both sides of the transaction is like having the same attorney in a court room.

Anything that is NOT in writing is NOT a "deal". I learned this the hard way..that is for sure....cuz, I had to pay for it and learned to never do it again.  That is the way it goes...your real estate agent should have put everything in writing or at the very least gave you some kind of reimbursement since they assured you that the swings would be there at pre-settlement walk through. 

I do not understand why you can not get electricity in your name??? The electricity has to do with the home, right? not the installation of the sewer?

Yeah, if something is bothering you...you should voice your concern...the weather in this time of the year is very difficult when trying to do something like install a sewer...but, you should not be without Electric???

Jan 05, 2009 09:12 AM #117
Rainmaker
207,503
Erby Crofutt
B4 U Close Home Inspections&Radon Testing (www.b4uclose.com) - Lexington, KY
The Central Kentucky Home Inspector, Lexington KY

Linda,

The swings seem like kind of a small potato deal given your electric situation.

This is REALLY NOT the place to get advice.  This is more of an education session for those in the real estate field.  You can get opinions from a wide variety of real estate people all over the United States but it doesn't hold water in Louisiana.

The only person who can BEST advise you is a local attorney familiar with real estate law.

Spend a couple of hundred bucks and get REAL advice from a local attorney, familiar with real estate law, in your area.

Good luck.  I hope you get some electricity soon.

 

-

Jan 05, 2009 02:45 PM #118
Rainmaker
76,710
Chuck Marunde
Sequim & Port Angeles Real Estate - Sequim, WA
Sequim Real Estate Broker

Earnie, Yes, dual agency is legal in Washington, but I strongly believe there is a huge conflict of interest when an agent tells his selling client, "I promise to get you the highest possible price," while also telling his buying client, "I promise to get you the lowest possible price." 

Imagine what a listing agent does for a seller. He or she has worked with a seller for six months to one year to list and market a property, with many many hours of paperwork, planning, writing ads, posting listings, meeting with the seller many times and having phone calls weekly, emailing and talking with prospective buyers, spending numerous hours behind the scenes, encouraging the seller and building an emotional bond, and who has committed his or her best efforts to get the highest possible price from any buyer who does show up.

Now imagine a buyer who drops into town and who calls that listing agent to drive around and look at homes for one afternoon. How can we honestly suggest the agent can fairly represent both the buyer and seller without bias?

I did a very short video on this at:  Dual Agency Wrong

 

Apr 01, 2009 06:03 AM #119
Anonymous
Gary Hunter

Hello all, I am having a hard time getting an answer to this question. I asked our broker to explain it and so far she has refused. I found this forum and decided to ask if anyone can tell me the answer.

Here goes: In Pennsylvania if agent for seller and subagent for seller both work for the same broker is it considered dual agency?

Apr 30, 2009 10:52 AM #120
Anonymous
Tony Moore
Hey, Sam Parker
Company  Parker & Wells,

I can see where you're coming from. Dual Agency should not be allowed in the heads of Real Estate Agent looking at the profit margin only. This is the type of agent's builders and consumers should stay away from and when they do not have a photo or a completed profile they most have something to hide. Maybe it is the guilt of a dual agent that is keeping you from showing your face and a completed profile. Remember that the truth will set you free.

Sep 09, 2009 12:44 AM #121
Rainer
10,470
JOHN HOLST
MetroStar® Realtors® Chesterfield Relocation™ - Chesterfield, MO

I am writing a White Paper and a Book on why Dual Agency should be eliminated.  Please provide any lawsuit information or other horror stories on how the clients' best interests were compromised or diluted.

There are multiple forces in the works: 1. In Congress, with fault being discovered that many buyers were not properly represented that added hot sauce to the housing melt-down, 2. With Errors & Omissions insurance carriers seeing that in 50% of all lawsuits agency is brought in as an allegation, see new Standards of Practice coming soon, 3. Well funded consumer advocacy groups (as in the 1993 Edina lawsuit that cost $18 Mil) are preparing to file multiple class action lawsuits in early 2010 against all the major players for inherent conflict of interest on dual agency and double-dipping brokers trying to "represent" both sides of a transaction, 4. The courts are getting tired of issuing warnings, eliminate dual agency or else.

It has been ten years since the real serious shot over the bow from Oklahoma:

In the case of SNIDER v. OKLAHOMA REAL ESTATE COMMISSION, June 1, 1999 the Oklahoma Supreme Court said: "Sellers' agents and dual agents do not and cannot by law give a buyer the same degree of loyalty as an agent who acts on behalf of a buyer. Sellers' agents owe their allegiance to the seller. Dual agency invites a conflict of interest. A buyer who relies on the seller's agent or on dual agency does not receive the same degree of legal protection as that afforded by an agent acting solely on behalf of the buyer".

Professionally, I find the concept of dual agency as completely indefensible and should be eliminated along with the perverse ways to thread the needle with transaction brokerage, designated agents, and disclosed dual agency.

There is no way that you can deliver a true informed consent from a Seller that is no longer going to have full fiduciary level of representation when somebody in the office is now going to be representing the buyer.

Just like the Veterinarian's Office; Cats go in one door and Dogs go in another:

Step 1. Need for only an Exclusive Buyer's Broker to represent the BuyerMake sure that the agent / broker that represents you gives you the highest level of representation possible, full fiduciary duty to only represent your interests as a Buyer and not the Seller. Engage an agent that will pledge in writing to exclusively represent only your interests. Say NO to: dual agents, designated agents, transaction agents and seller's agents. The Seller usually in 95% of the deals will fund the fees (just a normal real estate commission) to pay for this Exclusive Buyer's Broker to only represent the Buyer.

 Step 2. Need for only an Exclusive Seller's Broker to represent the SellerMake sure that the agent / broker that represents you gives you the highest level of representation possible, full fiduciary duty to only represent your interests as a Seller. Engage an agent that will pledge in writing to exclusively represent only your interests.

 PLEASE GIVE ME YOUR BEST VIEWPOINTS AND COMMENTS

Dec 06, 2009 10:27 AM #124
Anonymous
Sue Anderson

Here in Minnesota we have dual agency.  As a consumer, I hate it.  If I have Buyer's agent, (which I do) the Seller's agent does everything she can to peddle the property to her dual agent buyers and ignore my agent.  It's so bad she won't take my agents calls, emails, and sits on offers so she can sell to a buyer she finds.  In this particular case the property was very nice and very reasonably priced so she knew she could find a buyer.  She wouldn't answer my realtors calls-she knew his phone number.  So my realtor would have me call and then she would answer immediately because she thought I was a customer.  She sold the this property to 2 dual agent buyers...the first one fell through.  And, no, she didn't call my realtor back when the sale fell through even though we had made a cash offer 10 days prior.  And yes, the 2nd time she held my verbally agreed to offer for 10 days and then told us we were beat by another offer... a dual agent offer, of course.

Is this illegal?  It sure is unethical?  I'm very upset, as I sold my property to buy this property and I didn't get a fair chance.  Do I have any recourse?

Sue

Sep 14, 2010 01:32 PM #125
Anonymous
Rick

Was wondering if anyone has some advise for us, we have a small transaction with our Rest./Lounge Listing. We are in Hawaii where Dual agency is allowed. In the agreement it states 5% for the brokers. We came down to our Last 6 days of the Listing and advised our agent to contact another owner to buy or place. He decided to just buy the equipment from us and us his own name. We did all the negotiations, with him, settled on a price ourselves, several visits to his house. So, we basically represented the buyer our self. 5 days before are lease runs out are agent comes to us and says , your basically on your own , you will need to get an attorney to close this deal, and I can provide you with blank forms you can fill out yourself??????  We had to rush an attorney to get paperwork together to close this deal over the weekend. Now the agent and broker are calling for both sides of the commission. Can they do this due to  not having a Purchase Contract now, and we just sold the equipment. Wouldn't Dual agency still apply here that he is to inform us in writing that he wants to represent both buyer and seller, which we ourselves did?

PLEASE HELP

R

 

Dec 03, 2010 04:28 AM #126
Rainmaker
1,437,606
Georgie Hunter R(S) 58089
Hawai'i Life Real Estate Brokers - Haiku, HI
Maui Real Estate sales and lifestyle info

Rick - since you asked, I would like to say this.  You should seek legal counsel.

Dec 03, 2010 01:32 PM #127
Anonymous
Gregg Swanson

Illinois does allow dual agency

May 25, 2012 01:42 AM #128
Anonymous
KScott

Dual agency IS alowedin Pennsylvania

Nov 15, 2017 11:07 AM #129
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Ernie Cabrera

Real Estate America
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