Dual Agency some like it some hate it. Sometimes it is better, sometimes it is risky. Regardless of how you feel about dual agency, it happens. More often than we care to imagine.
Most often when we consider dual agency, we speak of one agent representing both the buyer and the seller. In this scenario, the agent is treading a fine line between representing one party better than the other. Something we must avoid at all costs.
Some states allow for the designation of transactional broker/agent. A situation where the agent does not represent either party to the contract and only works to see that the transaction follows legal requirements. Other states, Arizona being one of them, do not allow for the transactional broker.
It is in states that do not allow transaction managers where dual agency most often occurs. Dual agency also occurs when two agents from the same brokerage transact for the same property. A situation that is often overlooked.
Agents that work for large brokerages are likely to encounter dual agency simply because a large number of agents makes the likelihood of matching a buyer and seller common. As an example, my brokerage HomeSmart has several thousand agents in the Phoenix metro. Those agents will represent hundreds of sellers at any given time. Agents representing buyers will want to offer those properties to their buyers, automatically creating a dual agency situation.
Few buyers or sellers understand agency relationships. That is why it is critical to have the discussion with the client at the first opportunity. While it is legal for a brokerage firm to represent both the buyer and the seller in a single transaction, it must be done with informed consent. Dual agency inherently places limitations on an agent’s ability to disclose information about a property or client. Particularly when negotiating a price or terms. It is important that neither party be offered an advantage over the other because of the agency relationship.
Regardless of whether you represent a buyer or a seller, the best solution to avoid the pitfalls of dual agency is to have the discussion with the client before showing homes. Obtain consent, in writing, and remind the client that the home they are selling or buying may encounter a situation where you as an agent cannot discuss details about the other party.
With the right care, both parties can be represented with fairness and honesty. Your knowledge as an agent should be the value proposition that satisfies most clients. For most clients that is all that is expected.
Joe Domino is a Realtor® serving the Phoenix/Scottsdale area. Need more information? Or to Search for your next home, visit www.Scottsdale-AZHomes.com