If you have read my blog before, you will know that I really dislike dual agency. An agent is supposed to be an advocate for their cleint, getting them the best deal possible. When they have dual loyalty, it is impossible to negotiate the "best" deal. Yes, you can facilitate (or go down the middle) but not is not a description of an agent. In some states, they have allowed agents this role but again, is this really in the client's interest or is it just another way that the industry is protecting their own? This is especially difficult for large companies. If a buyer chooses only buyer's agent, then the buyers agent can't show any of their company's listings. And, I can't see how that could be a buyer advantage and why big companies spend lots of lobbying dollars when this issue comes up.
Anyway, back to New York. A buyer must now sign a form indicating that they approve of dual agency. I haven't seen the form, so I can't say that it goes far enough explaining the risks of dual agency, but it is clearly a step in the right direction. Here is an article explaining the new law.
Those of us who are in states which don't have such a form might want to create one. If we take a full disclosure, consumer oriented approach to creating thenew form, we need to include:
1) Buyer agrees to the relationship
2) Explain that 2 agents from same company are dual agents
3) The agent has explained the potential conflicts of dual agency including several examples
Explain what the agent must legally disclose to the other side. Note: Remember, that agent is supposed to disclose anything that would benefit their buyer. So, if the Seller is near foreclosure or going though a divorce and needs a quick sale, the agent has a duty to tell the buyer this. Obviously, this would be a breach of duty to the seller unless they specifically agreed to let the agent disclose this.
I always like the example that some one taught me. The example goes as follows:
The buyer has a roof inspection. The roofer calls the roof and suggest it be replaced at the cost of $7500. The buyer meets with his agent and tells them that he wants to ask the seller to replace the roof. But, they also tell the agent that they love the house and don't want to lose it. The agent, now wearing their buyer's agent cap, goes to the seller and says that unless the seller replaces the roof, the buyer won't buy the house. But, before the seller has a chance to react, the agent pulls off their buyer agent hat and pulls their seller agent hat out of their briefcase. "No", the agent yells. "I have a duty to disclose to you any information that I have that would benefit you. The buyer is only bluffing because he really loves the house."
Obviously, a little contrived but I think you get the picture. What would happen in the very same situation if the buyer was represented by a competent buyer's agent? These are the nuiances that are rarely discussed when these laws are being drafted but are what we agents deal with in the real world every day. I know it would change the industry a lot and would
I hope each of you had a marvelous Christmas with family. I did.