Dealing With Dual Real
Estate Agents
by Jakob
Jelling
Historically, real
estate agents have represented the seller of
a property. The seller, after all, is usually the one
who pays their commission, and agents therefore have
a fiduciary relationship with the seller. This in no
way means that agents may operate outside the bounds
of the law and ethical conduct of course. It just
means that the real estate agent is just that, an
authorized agent of the seller for a particular
transaction.
More recent
trends have introduced buyer's agents,
who usually work on a fee basis exclusively for the
buyer, and dual agents. Dual agents represent
both seller and buyer, particularly in cases
where the agent's company is the listing company. Dual
agency is legal in most U.S. states; however,
most consumer advocacy organizations recommend
against using a dual agent. This is because
there is an inherit conflict of interest for the
agent - they receive a commission based on the
selling price of the property. The higher the price,
the higher their commission, so their reasoning is
that dual agents never really have the buyer's best
interests at heart.
If you've
decided to work with a dual agent, this will need to
be disclosed to both the buyer and seller, and they
both have to agree, in writing. Dual agents are bound
by law and ethics to treat both buyers and sellers
honestly, equally, and fairly. Dual agents can be
prevented from divulging confidential information
about each party to the other. This could severely
harm negotiating positions.
The bottom line
in dealing with a dual agent is to remember that the
buyer and seller have conflicting interests in the
price and other terms of the sale. It's very
difficult for an agent to truly and equally represent
both parties, since the conflicting interests make
that inherently impossible. If you do choose to use a
dual agent, be sure the exact nature of your
relationship with the dual agent is clear, know what
services the agent will be performing for you during
the transaction, how the agent will be paid, and how
any conflicts that arise will be handled.
===============
About
the author
Jakob
Jelling is the founder of www.cashbazar.com. Visit his website
for the latest on personal finance, debt elimination,
budgeting, credit cards and real estate.
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