Designated Agency is Dual Agency
If you're thinking about buying a home in Maryland, you might want to do a little research before selecting your real estate agency. In particular, you should check to see whether the agency you are considering provides service to its clients as a dual agency, designated agency or single agency relationship. Sounds confusing, but it's quite simple.
Dual Agency is when a single person or company is representing the buyer and the seller in a single transaction. Although this is not illegal in Maryland, many people see it as a bad idea. Why? When a brokerage takes a seller client, they promise to work hard to get them the highest price for their property. When a brokerage represents a buyer client, they promise to work to get them the lowest price on a property. How can one company make these conflicting promises? They have to disclose to both parties that they are going to be doing business as a dual agency and may not be able to keep their promises. They will try and be impartial with both clients.
Designated Agency is a form of dual agency where the company selects one agent to represent the buyer and another agent to represent the seller. Because it is a form of dual agency, it must be disclosed to the buyer and seller. In Maryland, this is a legal form of agency and gives the clients the feeling that they have their own agent.
Can you imagine a law firm utilizing such practices? Do you think one firm would represent a husband and a wife in a divorce?
Single Agency is when a company decides that they will only represent sellers or buyers exclusively. There are listing companies that only list properties and there are exclusive buyer agencies that only represent buyers and never sellers. If you are looking to buy a home in Maryland, Buyer's Edge is a single agency that only represents buyers, never sellers, so there is never the conflict of interest that exists for in a dual agency transaction.
Designated Agency is Dual Agency
Let's give you a few examples that might arise and see what might happen.
1) The morning of settlement, you conduct a walk-through inspection and notice a sewer leak has backed sewage into the basement of the recently refinished basement of the property. The seller needs the funds from this sale to move forward with the purchase of their new home. The buyer does not want to settle and take ownership of the property because they want the seller to return the property to the condition that it was before the leak and is afraid the seller will not do anything once they are no longer the owner. Who do you want on your side? The agent who represents you? Or the one who works for both you and the seller?
2) At the settlement table, the title company shows the buyer the boundary line survey of the property showing that the shed the buyers liked so much is actually half on a neighbor's property. The seller wants to go ahead with settlement. The buyer wants the seller to move the shed completely onto one property. Who do you want on your side? The agent who represents you? Or the one who works for both you and the seller?
3) You have just completed an inspection of the property and it appears that the house needs a lot of repairs, including extensive roof repairs. The seller doesn't think the roof needs to be replaced, but your inspector does. The seller is sure he can find an expert that says it is fine. Who do you want hashing this out for you? An agent who is working for you, the buyer? Or an agent who is working for a broker representing both sides?
You have a Choice. Which will you choose?
Solution: Exclusive Buyer Agency
If you are looking for an agent who will look out for your interests, speak with an exclusive buyer's agent. Buyer’s Edge is Metropolitan Washington's Premier Exclusive Buyer Brokerage Firm, providing full representation to home buyers in Maryland, Northern Virginia and the District of Columbia since 1992. As Vice President and Associate Broker, I have been at the Buyer's Edge since 2001 and have helped buyers find the best homes, at the lowest prices and best terms for them. I represent people and not properties. See what my clients have to say about me and then give me a call to get started.
Other Blog Posts by Dana: Why Would Anyone Want Dual Agency?
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