The Secret Life of A Double Agent (real estate style)

Welcome to ActiveRain!

Dual Agency is permissible in my state, but so far I've avoided it. I had several occurrences where I could have done both sides - but I referred the buyer out to another agent. 

There have been several times that I have represented both sides with the knowledge of the other.  As long as everyone is on the same page and the title company is in the loop.  From negotiation thru close,  we have never failed to close a "double dip" to the satisfaction of both parties.  It is RARE - but it does happen.  ps, the seller gets a discount in this situation.

Yes we haved and continue to represenet both sides of a transaction. This may happen with a short sale. The object for the Sellers is to avoid forecloure and for the Buyers to have the home they want at the best possible Price. The listing agent knows that price....wants the Buyer to write and the Sellers benefit from closing a short sale. Fraud ? Absolutely not....we are all adults working in a business transaction to make it a win/win for all parties involved.

Dan,  Why do you choose to give half of your commission to your broker?  I found a brokerage who charges a flat monthly fee which works out to be less than 5% over the course of the year.  

We don't have dual agency in Florida - we have transactional agency relationship .  I have handled both sides in numerous transactions but personally prefer not to.  

We don't do dual agency in Texas. We have something called "intermediary" where one agent can assist both sides but not give either side help on how much to price or offer, no advice with negotiations, no sharing of confidential information provided by either party. Basically, with intermediary with one agent, the agent acts as a referee and guides the process. I have done intermediary twice. 

The first time was when the ex-husband, who had purchased the house way after the divorce so that his son would have a home to grow up in, decided to sell the house to the ex-wife. She was already living in the house, didn't need a seller disclosure, they had already agreed on the price. All I did was facilitate the transaction with the title company.

The second time was when a mother & father sold their home to the daughter who was already living there with them.  They also had already agreed on the price and I didn't have to represent either of the parties.

The other "flavor" of intermediary is when the buyer's agent and the seller's agent are both in the same brokerage.

To treat dual agency the same as buyer agency or listing agency is wrong. You move from representing the buyer or seller, to not acting against either party in the transaction. You become more of neutral advisor which can be extremely difficult. With that in mind, dual agency is always a good thing for both parties - unless they feel like their agent is working against them. 

Seems very simple to me about dual agency issues. So, if you're fearful, don't do it and if fearless, do it! Under certain circumstances, as referenced by Sally and David Hanson, # 42, using dual agency might work best to close a transaction.

Dear Dan,

Where we are, you can only represent one master. You can be nice to the other side, but they are not represented by you.

The listing agent is the fiduciary of the seller/owner.  Period.

The selling agent is the fiduciary of the buyer/borrower.  Period.

There can not be two sides being served IN THEIR BEST INTERESTS when their is dual agency.  And if the motivation to conduct this type of real estate service is based on the profit margins of the licensees . . . they have no clue what a fiduciary is all about.  They are self-motivated and do neither seller and/or buyer a real estate service.

Welcome! You picked a touchy subject here I have to say. And there will be no shortage of strong opinions. 

It is legal here, I have done it a few sleepless times. 

One thing I usually ask people when they are so strongly opposed to it, why do they advertise their listings with a call to action to give them a call? If you really object to dual agency, why not state on your advertising, please call any other agent but me to view this property. It's just a thought.

Technically speaking, I am in a dual agency situation if any other agent from my company sells the property. That might not be quite as tricky, but let me ask this question. Is there a mentality within companies that keeping the sale in house is better than not? I would have to say the answer is yes. 

It isn't easy, but my dual agency deals were successful, both parties were very well pleased. 

Our high end properties are often sold in a dual agency situation. Probably more than not. 

Hi, Dan!  Every Sunday I do a recap of blogs that I read last week in Last Weeks Favorites on AactiveRain.  And today, I included your post on my list.  Hope you enjoy the rest of your weekend.

Good morning Dan. This is a good post and welcome to the Rain. Years ago this was what we did normally.

I am not a fan of dual agency.  I will refer leads on my listings to another agent. Not an agent that works for me ... another agent in another brokerage. 

I've done it twice. Both times at the request of the seller. Both Short Sale Listings.

One was with a real bully jack ass ... that jack ass is now being sued by an investor for embezzling $6 Million from him ... and a list of 30+ contractors he failed to pay while he purchased homes and flipped them.  I did not want to represent this person. Seller wanted it because they offered cash for keys to the tenant. In the end, they attempted not to pay the cash for keys. No surprise there.

The other worked out BEAUTIFULLY.  It was a short sale we had approval on. The buyer released because of a death in her family.  I was already working with a buyer, well-qualified & well-vetted. Not some random buyer lead. I had established a relationship with her ... even met her parents and enjoyed a meal together.  It makes a difference to me knowing the buyer.  I had 2 listings in the same development ... both were under contract.  The buyer in contract released. I told the sellers about my buyer client.  They said ... we don't want to go back on the market ... we want you to work with her.  Boom.  The contact was released ... the new offer submitted to the short sale lender ... 4 days later we had a new approval ... we closed.  Happy Seller. Happy Buyer!  I paid a referral fee as that buyer was a referral.  

Buyers often call the listing agent directly, hoping that they can  gain an advantage since the listing agent knows the terms of other listings that may also come in and can therefore help his own buyers.

But it rarely works that way. Often the buyer is for all practical purposes, unrepresented in spite of what the "dual agency" agreement says.

Hi Dan Carpenter ... First off, welcome to the Rain! Second, you picked a good one to come out of the gate with... ;O) ... I'm kinda of old school in that I agree with Carla Muss-Jacobs, Principal Broker (503) 810-7192 ... I'm not in your shoes, because I'm a title guy,  and from my side of the fence 'dual agency' deals can present awkward situations in escrow when it's the fudiciary duty of the escrow officer to be an unbiased 3rd party and follow the closing instructions. I look forward to seeing your future posts!

Dan - dual agency is in fact forbidden in some states due to exactly the kinds of concerns you have. It can work, but the transaction on all sides needs to be based on integrity and trust. 

Hello Dan

Congrats on your first post with some strong opinions on this subject and welcome to the ActiveRain network.

In many countries that is the only way to list a property. The owners can sign up with as many contracts and wait for the one brings an offer on the table. 

Early in my career I was told "It is hard to serve 2 masters". With that in mind, I rarely practice dual agency. I have found it is easier to refer buyers interested in my listing to another skilled agent.