Real Estate Marketing & Beyond
When most people buy or sell a home, they pick a great real estate agent they feel comfortable with. Quite often the agent is chosen for various reasons including the following:
Whatever the method most smart people will do a careful interview to vet the real estate agent. As a consumer, you want to know there is a comfort level working with the agent.
Do they seem knowledgeable? Are they trustworthy? Do they know the local market?
Whether you are buying or selling you, want to have a great experience with someone you feel comfortable guiding you. The basics of real estate sales are pretty simple. A seller's agent works for the seller, and a buyer's agent works for a buyer.
There is a third, however, that throws many people off. It is what's known as dual agency. If you are buying or selling a home, you should avoid it at all costs.
Depending on where you are located dual agency can have a couple of meanings. For purposes of this article, I am going to discuss dual agency as one agent representing both the buyer and seller in the same real estate transaction. Hence, the term "single agent dual agency."
Let me state the obvious - it is impossible for a real estate agent to "represent the interests of both the buyer and seller in one transaction."
It is a conflict of interest. You can't serve two masters that each have a different set of goals. Typically a seller wants to sell for the most money, and a buyer wants to pay the least money. There could be a whole set of other goals as well.
Dual agency is the dark side of real estate driven by greed. Real Estate agents who practice dual agency are showing you their true colors right up front. Are you listening?
A real estate agent is your trusted confidant. When you want guidance, you turn to YOUR real estate agent for advice. Before you even write up a contract, you will want to ask them what to offer right?
When a problem comes up in the transactions like issues from a home inspection, you will want their advice correct? Well, guess what? By law, a real estate agent is no longer allowed to give a buyer or seller advice when they are acting as a dual agent!
Yes, you read that correctly. YOUR agent is now a neutral party in the transaction. They cannot favor or help either party. They essentially become a messenger and nothing more.
When you are selling a home, it is even worse. Think about this for a moment - you are paying your real estate agent tens of thousands of dollars, and you get nothing from them. NO ADVICE. Sorry pal, you are out of luck!
Sounds fantastic doesn't it? The real estate agent, however, is going to make a double commission. They will get paid from both sides of the transaction. Guess who is going to do everything in their power at all costs to make that sale happen. If you said the real estate agent, then I say BINGO!
Here is who the real estate agent is really representing - THEMSELVES! A significant percentage of real estate agents will violate the law and give both clients advice. Essentially they do whatever it takes for the transaction to come together. That's not representation.
Real Estate agents are required by law to explain dual agency to buyers and sellers. There is usually a disclosure form that gives them consent to practice it. The real estate agent is supposed to explain the pros and cons of dual agency.
What do you think happens when someone with a vested interest in having a buyer or seller agree to dual agency? If you are guessing they explain it much differently than I just did, then you are one hundred percent correct. Buyers and sellers are being fooled by dual agency all the time.
Agents all over the country are fooling their clients daily when it comes to properly explaining dual agency. They are describing it away as no big deal. They might even tell you that if you agree to dual agency, they will give you a discount on the commission.
Don't be suckered by these con men and woman. Do you want to save $2500 only to make a $15,000 mistake? You might be thinking you saved money for the property when in fact if you're the buyer, you over paid, or if you're the seller you accepted less than you should have.
Folks this is exactly what happens all the time!
The only party that benefits from it is the agent. Do yourself a favor - when buying or selling a home, reject dual agency. In the article above at Maximum Real Estate Exposure, you will see a detailed overview of what dual agency is and how it works.
Do yourself a favor and read it. If you are buying or selling a home, you'll be glad you did.
Some states have been smart enough to make single agent dual agency illegal. These states get the fact that one agent working with a buyer and seller in the same transaction does not offer any benefits to consumers. Here is a list of states where dual agency was outlawed:
There should be far more states making dual agency illegal. In fact, if every state truly cared about protecting a consumer's best interests, it would be dismissed everywhere.
It is a dangerous practice that should not be allowed to continue. As you can see from the above reference at Active Rain, lots of real estate agents don't have a clue when it comes to understanding what they are allowed to do as a dual agent.
Just read the comments and you will see what I mean. It is the blind leading the blind.
Do you really want to hire a real estate agent only for them to turn around and not truly represent you anymore? Do you want to forgo any expertise from the person you appointed as your agent? Hopefully, your answer is NO and you will reject dual agency.
If not, the only person to blame will be staring back at you in the mirror.
Use these additional resources to understand dual agency and why it should be rejected when buying or selling a home.
More Interesting Articles From Realty Biz News
Use these Realty Biz News resources to make the best decisions possible when you are going to be selling your home.
Loved it. This can't be said enough. The consumer needs to know. It is in everyone's best interest that the buyer and seller make informed decisions about representation. You nailed it, Bill.
Thanks Sheila. Dual agency is one of my favorite topics because I know how bad it is for buyers and sellers. I am doing my part to educate consumers to avoid it.