Beware of Dual Agency
Avoiding the pitfalls of Dual Agency Representation
By Leslie Hancock
Most consumers today assume that when they hire a real estate agent to sell their home that the agent is making a commitment to them to represent their best interests. After all, they're being paid to do just that—are they not?
I would answer, “YES!” What most sellers are not aware of is that when they sign an Exclusive Sale and Listing Agreement (the standard form used by most real estate companies today) they are actually giving their agent permission to represent them and the buyer of their home.
To give you a brief background on agency we need to go back to the late 1980s. At that time real estate agents represented sellers exclusively. When I began my career in 1990 Buyer Agency was just coming to the forefront. It was meant to provide a level playing field for both sellers and buyers, giving each equal representation. Unfortunately, the real estate industry did not respond as many had anticipated.
Rather than eagerly agreeing to represent and be loyal to either a buyer or a seller, a large percentage of the agents decided they wanted to represent both parties in the transaction. Why? Because it meant more commission dollars for that agent.
This practice is called Dual Agency and many agents practice it today. You may say, “How can one agent represent two opposing parties; is it morally and ethically possible?” I would propose that it is not.
Practically speaking, your agent-turned-dual-agent can no longer be an advocate for you. Nor can he or she provide you with answers to many of your questions if that information could be detrimental to the buyer. Even if your agent-turned-dual-agent has an answer to such a question, their legal responsibilities prohibit them from sharing that information with you. As one real estate attorney said, “An agent cannot be true to his or her client responsibilities and flirt with both parties. It’s like being engaged to two people at the same time.”
Having heard that, let me reaffirm my belief that single agency is true representation. That is why I chose many years ago to always represent my buyers and my sellers exclusively. When you are ready to buy a home I will exclusively represent you as your Buyer’s Agent and when you are ready to sell I will exclusively represent you as your Seller’s Agent. In fact, I always cross out the language in the Exclusive Sale and Listing Agreement which gives an agent permission to be a Dual Agent.
Of all the decisions you face when buying and selling a home there is none more important than the agent you choose to represent you. My clients deserve and receive representation without conflict of interest.