I bet that if all Realtors were asked what “gun-powder-smelling” topic they would least like to talk about, “dual agency” would get the bulk of the votes. FYI, dual agency is created when the same broker represents both the seller and the buyer in the same transaction.
Across all States, real estate pros who are keen on following the law and therefore protect the public as well as their own license, know that not disclosing to either party the fact that they are handling both sides of a sale is unethical and illegal. Double representation requires written consent. If the proper disclosure is made and the consent obtained, it’s generally OK, although there is sometimes a suspicion of something fishy in the atmosphere.
Here is why: we owe fiduciary duty to our principal (the client). That includes the utmost care, integrity, honesty & loyalty. So the million dollar question is: can a broker abide by such stringent & virtuous requirements and nonetheless agree to double-end a sale? To put it in another way: Can a broker create a win-win situation for both the seller & the buyer, or will the interest of one suffer from the attention given to the other?
Those fine minds who are opposed to dual agency make the argument that an agent can only serve the best interest of one party. They claim that attempting to offer the same degree of care to the second side without affecting that owed to the first, is just wishful thinking.
Money is the big scarecrow here. Since the agent has the opportunity to collect the sales commission on both sides, “he” may be tempted to place his own interest ahead of the interest of the principals. That could include keeping the listing away from other agents who may bring a better deal, or deliberately playing dead for a while in order for the listing agent to first write/present his own contract, get it accepted and win the jackpot. Who is benefiting from the crime, you might say.
OK, let me give you my take on the matter. First, a disclaimer: what I am about to say is only my personal opinion. My corporate attorney is likely to have a view on the subject quite different from mine. As usual, however, I will speak my mind, rather than keep quiet as to avoid making waves.
What I think is that we are getting more & more paranoid in this business, seeing evil intentions in just about every thought or action. We are thinking like lawyers, not Realtors. In a way, it’s a good thing, as we need to be aware of the risks in everything we do. But, in a way, it’s excessive, as it paralyses our actions and could negatively affect our ability to get the job done for the benefit of… Our buyers & sellers.
It is true that some real estate agents are somewhat devious and may not hesitate to cheat the system to reap a financial reward. Bad apples belong to any profession and industry. They are, however, a tiny-tiny minority. Not anywhere close to a good enough reason to jumble up all scenarios and vilify one million agents who are devoted to serving the best interest of the principals.
I am not advocating dual agency. Far from it. I am just using whatever common sense I have to present the two opposite points of view with fairness and reasonable arguments.
The fact is dual agency can sometimes be a good thing. It may prove to be a positive course of action. For example:
- It cannot be argued that the listing agent is likely the agent who knows the property best, giving the agent an advantage over others when trying to identify possible buyers. After all, we have to assume that this is a good reason (if not the main) why the sellers chose this agent in the first place. You don’t just expect your agent to babysit the listing, you want him to sell it.
- It cannot be argued that an agent working with a buyer is likely to know that buyer best, in terms of needs & means. Knowing the peculiarities of the subject property and the sellers’ wants & aspirations represents a non-negligible advantage that may result in a happy sale.
- If and when a situation arises that an agent is in a position to create a “Perfect Match” in between a seller and a buyer, that agent is only doing his job. Granted, the agent could refer the buyer to another agent, but, honestly speaking, we are getting more into cunning alternatives than meaningful substitutes.
Again, it’s only my opinion. OK to agree or disagree. Let the ultimate objective of doing the best possible job for both buyers and sellers be your guide.