Homebuyers and home sellers are notorious for giving more thought to pricing a property than choosing a real estate agent.
It’s common for consumers to visit open houses or answer ads and sign on with the first agent they encounter. In the excitement of a promising deal, the agent or broker seems secondary. But the agent you choose has plenty to do with the pricing and terms you envision—and ultimately obtain.
You should be able to trust an agent. By law, a professional broker or agent owes an obligation of undivided service and loyalty to a client. That agent is bound to such fiduciary duties as care, confidentiality, loyalty, obedience, accounting and full disclosure.
If you are a home seller, you expect to find a worthy listing agent or seller’s agent. If you are a homebuyer, you do well to find an exclusive buyer’s agent. But what many buyers and sellers don’t realize is plenty of buyer’s agents and seller’s agents want nothing more than to be your dual agent.
Dual Agent or Divided Loyalty?
In most states, the same real estate agent or brokerage can legally represent both the buyer and seller of a property (in a dual agency).
Using one agent to close a deal sounds convenient, efficient and even preferable, but keep in mind the clearest benefits belong to the dual agent who enjoys all the commissions without having to share with a competing agent.
There is also a fundamental price that comes with dual agency. As soon as you agree to work with a dual agent, you sign an agent disclosure form giving up any right to your agent’s undivided loyalty. At the same time, you acknowledge having considered all possible consequences of the dual agency relationship, an agreement, which is vague at best since real estate transactions can be full of unforeseen complexities.
What Your Dual Agent Might Not Be Telling You
Ask the agent who wants to sign you up for a dual agency to explain fully why a dual agent should be superior to an exclusive buyer’s agent or seller’s agent.
A well-meaning agent might assure you of fair treatment and other benefits of a dual agency—but remember a dual agent remains inherently in a compromising position—unable to provide full service and due diligence. More importantly, the dual agent no longer promises you the undivided loyalty of an exclusive agency.
Avoid the Bait and Switch of a Dual Agency
Since most real estate agents technically can work for a buyer or seller, there are many possible scenarios in which you can be drawn into a dual agency—often without realizing it. As an eager buyer, you might not realize the real estate agent you are signing with is also the listing agent whose original duty has been to the seller.
While agents are required to disclose any dual agency relationship to both the seller and buyer, many consumers in the midst of the excitement are not always clear about the details of such an arrangement. Be informed ahead of time and you will not be caught off guard.
Deal directly with smaller firms if you want to reduce the odds of encountering a dual agency. Even a buyer’s agent advertised through a broker could be associated with a large company, which has listings and encourages dual agencies.
If you are a buyer, be aware that the friendly agents offering to work with you at open houses already represent the home seller.
Choose the Real Estate Agent Who Will Work for You
Always ask who the agent represents from the start. If you do decide a dual agency is for you, comb the disclosure form carefully before signing. Better yet, consult with an attorney.
Whatever you do, it pays to know what you lose by agreeing to share the same agent between buyer and seller. Without the full disclosure and loyalty you enjoy with an exclusive agent, you are left at a disadvantage in a real estate transaction—whether you are a buyer or seller. If you have any doubt, insist on an exclusive relationship with a buyer or seller’s agent whose loyalties legally lie with you.
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