What Is It?
Multiple representation is also called dual agency or double-ending. It occurs when two (or more) parties are represented by the same brokerage. A brokerage could be an agency of real estate agent or just an agent.
Double-ending could be when two agents from the same brokerage represent multiple parties, but usually, it is when one agent represents two parties, usually the buyer and seller. And this is where the problem comes in. Multiple representation is completely legal in Ontario, but both parties have to agree. Many people don’t realize what they are agreeing too.
Pros
While double ending has gotten a bad reputation, it can actually be beneficial to both parties when done correctly. Here are a few pros to legitimate multiple representation.
Reduced Commission Price: If the same agent is acting on behalf of the seller and buyer they will usually reduce their total commission price. This means that both parties could end up spending less.
Logistical, administrative, and Communication: There is a lot of paperwork and phone calls involved in buying and selling real estate. Having one person, or two people in the same agency, handle all this makes things smoother. It will also probably get done sooner and the chances of miscommunication go down.
Improved and Increased Listing Knowledge: When one brokerage represents multiple parties for a listing, it means they will have more knowledge available to provide everyone. For a seller, it means getting to know more about the potential buyer. For the buyer, it means getting to know about the history and condition of the home.
Cons
There’s a reason multiple representation has been under fire. While it can be done correctly, most agents that do it don’t follow the rules, laws, and regulations that they’re supposed to. This ends up hurting one, or all, of the parties they are representing. Here are a few cons you should keep in mind.
They Reveal Privileged Information: Even when representing both parties, a brokerage isn’t supposed to reveal certain information. This could be other offers, details about the house, or financial information. For the buyers, it means you could spend more than you should, and for sellers, it means getting a lower price than you want.
Buyers and Sellers Have Opposite Interests: At the end of the day, buyers and sellers have completely opposite goals. A buyer wants to get the property for the least amount of money and for the seller they want to get the highest price for their property. Double ending is problematic as one agent can’t satisfy both clients.
Sharing Confidential Information: For most people, they rely heavily on the guidance of their real estate agent when it comes to pricing and offers. With multiple representation, a brokerage could potentially be sharing confidential information with the other party that could impact their bargaining position. A common tactic by a sketchy dual agency is to reveal other higher offers to the buyers to up the price.
Real Property Information: When selling a property, there are certain things that the seller has to reveal. Sometimes though they don’t have to reveal every hidden issue. For double ending though, a seller’s brokerage could end up revealing information about the property to the buyer they are representing that hurts the desired selling price.
Contact a Custom Home Builder with any questions, comments, or concerns.
