There's a Skunk in the Room: Double-Ending Deals

By
Real Estate Broker/Owner with Kristen Correa Real Estate & Reedy Creek Realty Services 0514644

Double-Ending. That is a term I didn't hear before this week. I can't find it in any of my real estate Skunkybooks. And yet it started a stink. Can I get an exhaust fan installed?

In a national real estate discussion forum, agents are ripping one another apart like they do when "going to inspections or not" is brought up or like the term "manipulate" is a matter-of-fact, like muscles massaged, or may as well be a four-letter-word, it's so dirty.

There is an awesome form (a form promulgated by TAR) in Texas called Information About Brokerage Services. By law, brokers and their licensed salespersons are supposed to educate consumers about brokerage services, explaining that the duties of the agent depend on whom the agent represents (prospective buyer or prospective seller, prospective tenant or prospective landlord) and explain under what terms Intermediary may be used. This is supposed to be explained on the first substantial discussion with any consumer.

Intermediary in Texas often occurs when a homeowner has their home listed with a brokerage and a buyer comes along who is brought by an agent within the same brokerage firm. This buyer may have another agent in the same firm or they may come to the property because of a relationship with the listing agent. Whether the buyer is with another agent within the same brokerage or with the agent who listed it, an Intermediary relationship becomes an option of all parties -- both buyer and seller and broker, too, would have to agree, in writing, to Intermediary. This Intermediary status is often mentioned upon first meeting -- as in the case of a consumer, a broker or salesperson, has just met and goes over information about brokerage services, as is required by Texas law, and asks the consumer to sign and date the form showing the info was shared and what date it was shared. Intermediary is also addressed in a listing agreement form and in my buyer rep agreement form. Again. It is explained and agreed in writing when listing agreements and buyer rep agreements are explained and signed by all parties. A related form is signed again when a sales contract is signed. This is all, of course, if it's done right. Done well. Done by the book...

There is also the case whereby a buyer comes along, unrepresented, and the brokerage has only seller representation, but buyer represents himself. This sale may still go in MLS as... you name it. How your local MLS has you enter it is between you and your MLS agreement... often is looks "double-ended" in MLS. I will leave it at that. Because different states, different relationships will term this sale differently.

Seems like whether I am in a real estate class full of new licensees, as well as seasoned licensees, or in an online discussion forum full of the same, regardless of if we are all Texans, or span coast to coast, this topic is a hot one and quickly either misunderstood or fought over!

Many agents and brokerage firms in Texas believe Intermediary is easily accomplished. Many believe it is both legal and ethical and an option brokers, agents, buyers and sellers like -- when a deal comes together, it comes together, regardless of who or what or when or how or why made it happen. SOLD!

Many brokerage firms believe dual agency, Intermediary, or anything of the sort should be banned! Outlawed! Many believe "double-ending" is legal, but unethical or very dangerous territory, at best. They believe it is hard if not impossible to move from representing a homeowner exclusively to having a buyer, too, and thereby changing sometimes mid-game, mid-deal, from represented to Intermediary... Mission Impossible.

I have to be honest and I guess bias this post a bit. It's my post, afterall. I think you get a skunk in the room, any deal will stink. Call it any non-classroom-book term like double-ending you want, or call it any agency relationship or non-relationship term straight from the brokerage classroom you want, an incompetent professional or unethical professional and their poor, uneducated, mis-informed, or mis-lead consumer will remain just that... uninformed. That typically turns to either blissfully ignorant or mad as a wet hen they didn't get the service they expected.

The status, when disclosed, explained well, and consented to in writing, between brokerage firms and the principals in the transaction is not typically the mobs' prob...

Status of agency is not usually the issue, to me. It's the competency and ethics of the pro(s) who procure(s) it that makes a sale smell like a barnyard or smell like roses to both brokerage firms and consumers, alike. And we all agree a salesperson who is "double-ending" ALL their deals smells fishy!

This post is dedicated to Debra, Sara, Mitch, Michael, Lane, and all my new learning buddies online, who may or may not agree whether double-ending is ok, or whether going to inspections or not is ok, but who I love to learn with, nonetheless!

Posted by

Kristen Correa Real Estate

Comments (8)

Roger Stensland
Keller Williams Realty Puget Sound - Maple Valley, WA
Let's Move!

Double-ending a deal is legal up in Washington State.  And, it can be ethical.  The main problem as I see it is that if you are a true dual agent, you turn into an over-paid, paper pusher who is only taking care of yourself.  This is because you can't negotiate for either side so you can't get the seller the most money for his house and the buyer the most house for the money.  It just isn't possible.  I am one of the few who think that dual agency should be banned.

May 20, 2013 12:51 AM
Dan Hopper
Dan Hopper - Gold Way RE - Westminster, CO
Denver Broker / Author / Advocate/Short Sale

There is no doubt that "dual agency" should be removed, or made illegal.  YET, there are other ways to put a transaction together while handing both seller and buyer.  It all comes down to HOW you as the licensee behaves and interacts with both parties.  IF NO agency relationship... then BEHAVE like there is NO AGENCY!!  Like, do NOT share confidential information of one party to the other party.

Non-agency working relationships can exist if they are handle in the right manner!!  Do it right!

May 20, 2013 01:04 AM
Kristen Correa, Broker
Kristen Correa Real Estate & Reedy Creek Realty Services - Keller, TX
I love coffee & real estate. I am out of coffee!

Roger, thank you very much for your professional opinion! You are not one of a few... There are many, many, many who agree with you.

I believe every situation is different. Say the seller is priced at $200k. Say the buyer comes to an open house and offers $200k on the spot, unrepresented or otherwise asks you to write a sales contract with them, call it what you want. They offer normal, customary, typical terms you already reviewed with your homeowner when you took the listing anyway. Everyone involved is very clearly very happy with this possible sale. It's hard to say who can change this deal with any amount of pro opinion here or there, represented or not, unsell it, refer it out to another firm, just do it, not do it... That's why it is a CHOICE, for now. Buyers, sellers and agents, alike, make a choice.

Many, like you, would choose NOT to have your name associated. Refer a buyer (in any situation, open house or not...) to another pro. Lobby to ban dual agency and anything similar to it or variations of it.

Many, like me, would say I am willing, educate, but it is the consumer's choice. Current laws say fair enough.

Some licensees out there are banking every deal double-ended, apparently. Hmmmm.

But if it is ever banned, I will certainly understand why! It is very hard to do it RIGHT. To make sure the consumer GETS IT. To make sure the brokerage firm informs all and carries out Intermediary correctly from beginning through the twists and turns and to the end.

Until you guys lobby to get it outlawed (smile) I believe it can be done, in certain agreed-upon terms, with ease.

May 20, 2013 01:14 AM
Kristen Correa, Broker
Kristen Correa Real Estate & Reedy Creek Realty Services - Keller, TX
I love coffee & real estate. I am out of coffee!

Dan in Denver. AGREED! Great comment. Thank you!

May 20, 2013 01:15 AM
Steven Cook
No Longer Processing Mortgages. - Tacoma, WA

Kristen -- if a real estate agent and/or brokerage is doing the vast majority of their deals as "double-ended" there are likely to be many people getting upset over time.  I would think that if that is their situation, they may not be properly explaining "agency" or "representation" to the clients (most likely buyers).

May 20, 2013 03:09 AM
Kristen Correa, Broker
Kristen Correa Real Estate & Reedy Creek Realty Services - Keller, TX
I love coffee & real estate. I am out of coffee!

Steven, thank you for your comment and then your PM. Agreed. If one person is doing a ton of double-ended listings, it's likely something's fishy. I have done a small handful in 10 years. But I don't think they should be outlawed. Some people think they should. And I also agree with you, if agency were explained better 100% of the time, buyers and sellers alike may not agree to Intermediary or DA as prevalently.

May 20, 2013 03:16 AM
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

On the more side, there are more issues when there is only one agent in the transaction. it is very tough to negotiate with yourself and who is the one being truly represented?

May 20, 2013 07:53 PM
Kristen Correa, Broker
Kristen Correa Real Estate & Reedy Creek Realty Services - Keller, TX
I love coffee & real estate. I am out of coffee!

Joe, you are in agreement with a lot of folks! I rarely am presented with the "problem/opportunity" to "double-end" (just heard the term for the first time this week) and when I am, I make sure all parties understand agency and who represents who and how that changes when we enter Intermediary. It's part of the documents they see, agree to and sign, in BIG BOLD PRINT, how the role for the broker and/or agent changes if the listing agent brings a buyer. It's clear to me and I thought I always explained it clearly to sellers (and buyers, too). But apparently very muddy to others or it wouldn't be in BIG BOLD PRINT and it wouldn't be such a sore spot to other pros.

May 21, 2013 01:18 AM