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This Old House - Do-it-Yourself

Never Agree to Dual Agency Representation

Written by Posted On Sunday, 20 October 2013 19:11

Dual agency occurs when real estate agent represent both the buyer and seller on the same transaction. This occurs when a Buyer goes to a builder's showroom and talks to one of their sales people, or when you call a Seller's agent directly from a sign or ad to view a home you are considering.  It also occurs when you buy a house listed with the same Real Estate Brokerage company that your agent represents.

Dual agency means the Realtor is serving two masters. Other professionals like lawyers are not permitted to engage in this practice.  Many real estate agents are not experienced and qualified to handle this conflict. It is illegal in every other fiduciary profession except under the most extreme circumstances.   Under Dual Agency, real estate agents/brokers collect a double commission and theoretically they are prohibited from doing anything to the detriment of either party.  

Dual agents are legally prevented from negotiating price or terms (two of the most important reasons consumers hire Realtors). Dual Agency is a conflict relationship that strips buyers and sellers of the Realtor's service to a level that is essentially abandonment. It means that they are getting paid twice as much for doing much less work. In other words, all the reasons you hired your broker vanish - often with little warning. The broker could be acting in the client's best interests all the way up to finding the house that creates a dual agency. At that point the buyer or seller are on their own.

Instead, when you use only an independent Buyer’s Agent they have a fiduciary duty to serve only your best interests.   With Dual Agency representation you are taking a much higher risk.

Realtors, many who typically have little or no understanding of the legal ramifications of their own fiduciary relationship with their clients, can illegally counsel their clients of claimed "benefits" of dual agency or that it is "Not a Problem" as they ask you to sign the Dual Agency waiver. There are NO benefits to dual agency and you should NEVER agree to dual agency. In my opinion, find a small brokerage firm with highly qualified real estate agents and insist that they not engage in dual agency. The likelihood of dual agency arising with a smaller firm is far less than with a large real estate firm.


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