Is Dual Agency in the public’s best interest? Part 1 of 2

I have an agenda, and have for a couple of years, and that is to rid the real estate profession of the scourge of Single-Agent Dual Agency. I’ve written about the problems and solutions extensively over the years, and my position has evolved from advocating against all forms of Dual Agency to acquiescing to the reality that Designated Agency may be a necessary evil. This post has been percolating for some time, but the time is right, and I have found an eloquent ally as well …

Who benefits from Dual Agency? The Realtor.

One of the primary values a Realtor brings to a transaction is representation – representation of his client’s best interests. How can a Realtor advocate for the best interests of both parties and still maintain the perception of fairness and full representation? In my mind, there is a difference between treating all parties fairly and honestly and being able to advocate with 100% vigor for one party.

Realtors practice dual agency all the time – successfully. Never had I had someone remark how much they appreciated their agent representing both sides. I have been told numerous times by clients how they perceived their agent in a shady, less-than-honest manner because that agent had both the buyer and seller.

Dual agency devalues Exclusive Representation.

In a divorce, would you have the same attorney represent both parties?

I am privileged and please to have found a member of the VAR Policy Board is another vehement advocate against Dual Agency. What follows is an email from Joe Vita, an Exclusive Buyer’s Agent in Lexington and Rockbridge County.

—————————————-

While it may seem like an easy issue for people like you and I to address and defend, it would take quite a lot to get the majority of Virginia’s agents to go along with the abolition of dual agency.  While the problems with dual agency are easy to identify, the solution will be complicated.

I know that there are members of the Real Estate Board that recognize the problems with dual agency as it seems to come up at seminars they have conducted at VAR’s meetings as one of the most serious and common complaints about agents they receive.  But I don’t know if they have ever given any serious thought to a proposal to eliminate of dual agency.  While they could be the source of some change themselves, it is much more likely that either consumers or VAR would have to drive the agenda.

I doubt very seriously that VAR’s leadership has ever considered it for a minute as there isn’t any impetus coming from membership that I am aware of at this time .

I don’t know if any legislators are even aware of any problems with dual agency or would care about it unless a demand for change came from the public or VAR.

I’m not aware of any consumer organizations in our state that have expressed concern about it but believe that there are national groups that may be concerned.  I suppose that a consumer’s revolt could occur but it doesn’t look like something that will be coming down the road any time soon.

I’m not aware of the federal government getting interested in this area of our business practice though they always seem to be looking into something involving our business practices.
MLS operations appear to be their soup du jour.

So, it would appear that unless at least one of the five main sources for change decides that it is in their best interest to get behind the eradication of dual agency, it will not get done.

Part 2 to be published on Thursday.

Part 2 is here.

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37 Responses to Is Dual Agency in the public’s best interest? Part 1 of 2

  1. Jim: You have another policy board member, me, who is an advocate for the end of single agent dual agency. I have “preached” to my 60 plus agents the dangers of such representation to the degree that I require that if I call either party to the transaction they must be able to explain to me that they understand and agree that the agent is now “beige” or neutral to the transaction. Over the past years of the 800 plus transaction we do, less than 10 have been dual agency. It’s a step.

  2. Jim, I am very much against Dual Agency, and don’t understand why it exists other than to benefit the Broker and agent. But the reality is that it doesn’t. I don’t really care how ethical you are, as an agent you are not delivering the services your client initially felt they were entitled to. VA requires an expressed (written) disclosure…. Let me author it – no one will EVER sign it.

    In the March/April 2004 issue Lem Marshall (VAR’s legal counsel) wrote an article warning Realtors away from Dual Agency. In 2005 Schafer Oglesby the Chair of the Real Estate board at the time, also issued issued a warning and 2005 NAR printed an article in REALTOR magazine with cautions.

    How long will it take an attorney who is using you in a dual agency situation to submit these three exhibits in the case? I would imagine it would be something like this “Your Honor, the three most influential entities in the Virginia Realtor business have warned their members to NOT practice this unnecessary level of dis-service…”

    Having said this, I will not argue that there are rare occasions where you “might” not be able to get out of it, but they are few and far between.

  3. Tony Arko says:

    Even though I have no power and I am not a member of any governing body, I am behind you in your efforts to eliminate Single Agent – Dual Agency.

  4. Scott Rogers says:

    Jim, you wrote: “How can a Realtor advocate for the best interests of both parties and still maintain the perception of fairness and full representation?

    I actually see that happen quite often — a dual agent maintaining the perception of fairness and full representation. But neither really exist unless it is one of the rare transactions where not a single conflict exists between the parties, and neither party wants to negotiate the terms of the contract.

    Just this evening I was looking back at an article I authored in 2005 that was published in our local Business Journal about the dangers of dual agency. I was surprised by the backlash from (a few) agents in my market who were angry that I had written such an article — lambasting their common practice.

    I hope we can get some of those opinions here — certainly some VARbuzz readers must think dual agency is acceptable? Please — speak up!

  5. As a company policy we do NOT do Dual Agency. We aren’t paper pushers (ie giving neither side representation). But we WILL do “Unrepresented Buyer” for all those buyers that don’t want an agent and think a buyer agent is worthless.

    They have to sign a strongly worded document that says “We 100% represent the seller and not the purchaser in this transaction.”

    What I consider borderline is when a listing agent says “Oh you want representation from another agent? I can refer you to an agent in my office.” And then they proceed to get a referral fee AND the buyer agent that gets the lead is LESS likely to negotiate as hard. I also find that to be shady.

    Frank

  6. Jim Duncan says:

    Please, please, please – somebody defend the practice of Single-Agent Dual Agency.

    If no one steps to the plate in its defense, won’t that be implicit acceptance of the argument that Single-Agent Dual Agency is, in fact, bad?

  7. Jeremy Hart says:

    thank you, Jim, for putting this on the table for discussion. My group does not do Dual Agency, and will not … Although our brokerage does. We’ve asked to have it eliminated, but I think we’re shouting into the dark.

    DA is the “have your cake and eat it too” adage, and I’ve wondered if it’ll ever change until the public decides they’ve had enough – unfortunately, that might come at the expense of some major lawsuits against agents and brokers. If we are hit in our wallets, I wonder what our response would be then?

  8. I don’t really like it myself either and had it explain to me when I was goiing to write a contract for a house I was interested in and by that time I was ready to buy and moved forward with it but didn’t like the idea.

  9. Joe Vita says:

    Would anyone venture a guess as to the possible reasons that may be given by an agent or agency for encouraging the use of single agent dual agency?

    Is it a necessary or preferred practice in our profession for any good reason?

    Is it something that anyone ever recommends to clients?

    How do our office policy manuals address it?
    How should they address it?

  10. Pingback: Seeking a defense of Single-Agent Dual Agency | Real Central VA

  11. Pavel says:

    A few years ago, I had a real estate class instructor who was (and still is, I think) a specialist in a very niche market: sales of “B & Bs”. I believe he mentioned he prefers dual agency for every single transaction he does since he brokers a good number of sales without the use of MLS (Seller confidentiality reasons) and the transaction requires someone who understands the inner-workings of this very specific niche market.

  12. Great Article and good comments. Dual Agency is the single worst problem in real estate. No Consumer benefits from dual agency (Seller or Buyer). I posted an informative blog post a few months ago. http://homebuyersadvocate.wordpress.com/2007/10/28/dual-agency-should-be-illegal/

    Good Luck Out There!

    Home Buyer Advocate Mike

  13. Jay Thompson says:

    Sorry Jim, I can’t argue for single-agent dual agency. It’s forbidden in my brokerage in the policy manual.

    I had an interesting discussion with my E&O rep about dual agency. E&O claims are overwhelmingly a result of dual agency.

  14. Scott Rogers says:

    One argument I have heard in favor of single agent dual agency is that it can make a transaction smoother, since someone knows the entire situation and all of the variables at play.

    This just sounds dangerous to me . . .

  15. Al Patel says:

    Jim writes, “I have an agenda, and have for a couple of years, and that is to rid the real estate profession of the scourge of Single-Agent Dual Agency.” He also writes, “Please, please, please – somebody defend the practice of Single-Agent Dual Agency.”

    I will attempt to defend this practice.

    First of all let us remember who the “Dual Agent” is. The Broker is the Agent for the principal; not the Sales Associate. Getting rid of Single-Agent Dual Agency will seriously impact The Broker who represents a new home community. The Broker will not be able to represent (designated, which is still dual) buyers for that community. They will not be able to earn that income which may cause them to increase the fee they are charging the seller. Guess what the seller will do? Yes, they will pass it on to the buyer. Do we really want to increase the cost of the transaction? What about the resale brokers doing large numbers of transactions, don’t you think their income will suffer as well? Who do you think those brokers will pass the cost on to?

    Let’s also think of the Commercial practitioners who deal with sophisticated investors. These clients may not need the “representation” as we have come to know in the residential world. They operate under the same agency law as the residential brokers. It may not make much sense in some of the commercial transactions to involve more than one Agent. Adding another person to the transaction can only mean increasing the cost of the transaction.

    You ask, “In a divorce, would you have the same attorney represent both parties?” Who do you think usually comes out ahead in a divorce, the divorcing couple or the attorneys? If the divorce is amicable, or the couple doesn’t really have any assets or children, do they really need the additional expense (attorney)? Isn’t divorce, by definition, costly enough?

    What exactly does it mean to represent the client’s best interest? What really is the client’s interest? I agree with Lem Marshall, agents get into a mess when we don’t keep in mind why a buyer is talking to us in the first place. Is the buyer looking to buy a house or are they looking to hire an agent? I have rarely heard of a buyer calling an office looking for a “Buyer’s Agent”, exclusive or otherwise. Almost always, buyers call us to buy a house. Instead of selling them a house we sell them us (in the form of our representation). Almost half the problems of ‘Single-Agent’ dual agency will simply go away if we just keep that in mind.

    Getting rid of Dual agency isn’t the answer. Listening to the customer and selling them what they want is.

  16. Pingback: Stepping up to the plate - Single Agent Dual Agency | VARbuzz

  17. I respect Al and Candy’s attempts here. It is difficult at best to go the mat over this issue, as it isn’t usually PC to defend Dual Agency. However, in both cases the defense seems to be in the “company’s best interest”. I think this is why it’s still around, but as a consumer that just isn’t good enough. Seriously impairing the company’s ability to represent the new construction transaction means that the company simply needs better policy and referral practices.

    As far as commercial goes, I can’t say as I have no expertise in that arena…

    As I said in my first comment there are rare occasions when it is the best or only option and single brokers in a rural area with special market conditions would be one. But a large company has no excuse not to refer to a designated agent; with the exception of pre-existing Buyer Agency and Listing agreements in which the consumers simply do not wish to be referred.

    Regardless of our best advise there will be those consumers who simply don’t care and are “in love” with their practitioner.

    It’s complicated at best, but I just can’t help but think that with the significant number of licensed real estate professionals in Virginia that we can do better than purposefully go after the “double commission” as so many agents do.

    Of it’s very nature it’s not putting the clients needs (even those needs they don’t understand they have) first.

    But here’s my real issue… We’re talking about trusting this level of representation to folks who only need minimal hours to keep their license, and many have issues doing just that… I don’t know, too many agents simply aren’t prepared enough to do this as the law intended it to be done.

    For Brokers, I think that if you’re going to permit your agents to do this, it should be clear that you want it done as a last resort. I think that agents must me some standard level of care outside of pre-licensing which doesn’t preparing them for this. They should be either CRS, Associate Broker, GRI, ABR etc… to enter into this relationship or required to have the BROKER (not the agent) to designate another agent. Referral fees are a seperate issue, if the agent is picking the least common denominator in the office to refer the consumer to. It makes no sense to allow an agent to pick a lesser agent to refer to in a designated situation.

    Just some simple thoughts, from a simply mind….

  18. Joe Vita says:

    Representing a client’s best interests means looking out for them and being their advocate though not being adversarial in the process.

    Our services include providing/discovering/verifying accurate information of all kinds for their consideration and evaluation.

    It also mean assisting with advice and providing negotiation skills so that they may get the best terms and conditions possible. Don’t both listing and buyer agents rightfully assure that they will try to get their new clients the best deal they can?

    Single agent dual agency limits our services to ministerial duties and transaction management services. No advice of any kind can be legally provided to either side at any time. They cannot assure either party that they will even try to get them a great deal. So there is a disappearance of certain services once the very opprtunity they are looking for arrives on the scene.

    When an agent takes a listing he doesn’t offer such limited service. He sells his experience as an advocate in addition to his marketing and negotiation skills. He offers the same range of services to his buyer client at the time they agree to work with him. He learns all sorts of things about both parties during the course of his time with them. Then, as soon as he finds himself in between the interests of both clients he attempts to put on his dual agent hat. Now both clients will get less than what they thought they were getting from him, though they may not really know that and wouldn’t choose such “representation” had they been fully informed at the start of their relationship with their agent. Typically, there is no reduction in fees for the limited services rendered.

    Whereas he was expected to tell his buyer client the reason a seller was placing his property on the market, a buyer agent must not do so because of the change in his status.
    Whereas he was expected to reveal to his seller client what he knows about the buyer’s financial circumstances, he must not do so because of a change in his status.

    Should he feel conflicted if he knew something that would make a difference to either client but he was not permitted to reveal as a result of his choice to turn into a dual agent? For instance, he can’t reveal to his out of town buyer, without his seller’s permission, that the local news reported about a new county landfill that may be placed close to a property belonging to his seller client. He can be the most honest agent there is but he cannot legally reveal to a client what he would have had to otherwise disclose by law. Will the buyer be understanding after he and the county both move into their new digs? (pun intended)

    As Lem Marshall has written in a past Legal Lines column: “Dual Agency is ALWAYS a conflict of interest…..The conflict doesn’t go away just because you get the requisite consent. You still must act in a manner consistent with the conflicting interests of your clients.”

    Why would any agent choose to place themselves in that position?
    How is either client’s interest being best served by this arrangement?
    Who actually does benefit from single agent dual agency?

  19. Pingback: Practical dual agency in real life: It is possible to have a fiduciary duty to your sellers — that you cannot get away from — that feels like a complete betrayal of your buyers. What then? | BloodhoundBlog: Real estate marketing and technology

  20. “I will attempt to defend dual agency”

    As a person experienced with new home construction, irrespective of the status (employee or broker)of the individual selling the properties, letting customers know that the on-site agent represents the seller is simple: just have them acknowledge that they understand that the on-site agent represents the seller. No need for dual agency. While some may go out and obtain representation others will accept the notion that the broker represents the seller, and proceed, making an educated choice (those that proceed generally have had a bad real estate experience). Changing agency status mid-stream is worthy of the consumer complaints that it has drawn- it’s fundamentally dishonest.

  21. Jim Duncan says:

    Al –

    With regards to this statement:

    Is the buyer looking to buy a house or are they looking to hire an agent? I have rarely heard of a buyer calling an office looking for a “Buyer’s Agent”, exclusive or otherwise. Almost always, buyers call us to buy a house.

    I suggest that Buyers are beginning to do just that. I have been interviewed numerous times in the past year by Buyers specifically seeking out buyer representation.

    There’s more to the equation than “selling.”

    Matt – Commercial is a different animal, so much so that the question has been asked – should commercial agents have a separate license?

    Laurie – taking your comment one step further – it is (or at least should be) incumbent upon the builder’s rep to educate the customer about the benefits of having buyer representation, lest that buyer unwittingly may end up signing, and regretting signing, a contract like this.

    Now, on to Candy …

  22. Pingback: Is Dual Agency in the Public’s best interest? Part 2 of 2 | VARbuzz

  23. Pingback: FBS Blog » Blog Archive » How Do Consumers Choose An Agent? Part I

  24. Jay Ovalle says:

    We have been stirring this issue for over twenty-some years now. Back when, it took many years for the industry to accommodate a newcomer: the buyer broker. It also took another great deal of effort to get disclosure laws and rules enacted. While I believe single agency is the solution to the dual-agency controversy, I also believe that as long as we perceive this evolution as a risk of economic loss, the industry, as a whole, will drag dual-agency as long as it has to.

    The real estate business is based on the long-standing marketing dictum that a listing will procure buyers. We promise this to the sellers when we take a listing: I will get a buyer for your home. I don’t have to explain to practitioners the windfall that comes from procuring buyers for your own listings. These practices are the pillars of our industry, the core of a successful real estate business. So the system is rigged to respond in predictable ways.

    However, it is refreshing to see a new generation of agents interested and vocal about this very thorny issue; carrying over the flag of advocacy, as it were, to a new battlefield. I recently commented to Greg Swann that in 1995, after Barry Miller sold REBAC, the then militant arm of exclusive buyer brokers, to the NAR, the issue went under the radar and I said ‘…the horse was totally and sincerely dead.’ To this Greg responded with a quotation from Victor Hugo: “An invasion of armies can be resisted, but not an idea whose time has come.”

  25. Mike Anastasia says:

    Duel Agency should be abolished! Whom are we kidding but ourselves. You cannot represent both sides of the transaction continuously without conflict. In my short 4 years of practice, I have already seen multiple times where a consumer could have negotiated a better price or received more concessions had they been represented by another agent in the transaction. I have also seen listing agents negotiate up front, a lower commission, for handling both sides. Come on Virginia, outlaw this practice immediately, and let’s get the public trust back!

  26. Jim Mellen says:

    Thanks Jim for bringing this discussion to the table. I’ve gotten on my soapbox too many times to count advocating in my office against Dual Agency. Greed and ignorance are the only two possible reasons a REALTOR would suggest it as “legal and OK” to a buyer and seller. It usually starts with an agent saying it is legal for an agent to represent both a seller and buyer in Virginia. But an agent cannot “represent” a customer can they? But that is the language the agent will use and that leads to the perception that it is OK. It boils down to a trust issue and I believe all successful agents can and will earn the trust of most people we deal with, but a dual Agent may be misusing that trust. When something goes wrong in a dual Agency deal it is not just that agent that can’t be trusted but all agents.

    Designated Agency must also be carefully watched as I’ve seen and heard where a selling agent can be a little too willing to help the designated agent get a deal done which can easily become undisclosed dual agency. A lose/lose situation for all of us.

  27. Carlos Cardo says:

    “Single Agent- Dual Agency” Was the original topic and it seems we have strayed a bit.
    In this current country and market we have huge brokerages through attrition and mergers. The Dual Agency “Designated Representative” is arguable and in my view just fine. If a Brokerage spans 3 states and listed a house and another agent within that Brokerage represented the buyer, Then That Is Fine. Bottom line One Agent represents One Party. The brokerage’s fee is NOT dependent on the outcome (if the price goes down then it does % wise minutely).

    Al Patel Writes “First of all let us remember who the “Dual Agent” is. The Broker is the Agent for the principal; not the Sales Associate. Getting rid of Single-Agent Dual Agency will seriously impact …..Getting rid of Dual agency isn’t the answer. Listening to the customer and selling them what they want is.”

    I disagree with Al’s remarks on two parts:
    1. Dual Agency isn’t the issue here, it is Single Agent-Dual Agency (a world of difference). The State of Virginia has wisely made that distinction. Yes, the Brokerage represents the client, however who is doing the actual negotiation, definetely NOT the Brokerage, it is that actual agent (person not business)!
    2. I listen to my CLIENT and look out for their best interest not the CUSTOMER.

    In the whole real estate transaction the Real Estate Agent is truly the only one other than possibly the Attorney that has a CLIENT and states that they will look out for their best interest (the agent does that in writing). The loan officer does not state that nor the appraiser. Every one of my clients appreciate that and tell me so.
    If you try to represent both sides, and do it honestly, you are truly acting as a FACILITATOR. WHY???
    You know too much!!! When you take a listing you told your CLIENT that you would act on their behalf (that is why you are called their agent) and negotiate to get them the best (Highest) possible price and terms. You have knowledge of the payoff, their situation, their timeline and so on.
    If I was another agent with that knowledge (aquired by research) would I use that info for my buyer? YES, I have to. Why??? I told my buyer I would represent their best interest and negotiate to get them the best (lowest) price and terms.
    The only way I could reason that I could honestly represent both parties is if I had a dual personality disorder and neither of my personalities had personal insight into the other client’s issues. Can you picture that? An agent with two cell phones (one in each ear) negotiating price and terms. What a movie that would make. “The Dual Agent” -Frank Smith and John Doe both the same person looking out for your best interest and battling it out 24 hours a day!
    Situation:
    A buyer client stated that they like your listing and would be interested in making an offer.
    My Remedy:
    Inform the client that you represent the seller and would ask permission from the seller to become a FACILITATOR (Not a Representative), likewise inform the seller of the buyer’s intent and if it is alright to act as a facilitator. If both parties agree, inform both parties that private information is not going to be initiated by the agent, and that you will sit will both parties at the table to discuss the offer and the agent will “Facilitate” the transaction ensuring all necessary real estate matters such as the disclosures and the process is adhered to. If both parties do not agree to this, refer the buyer out.
    In Summary:
    Remember, as an agent you are to keep all confidential information about your client confidential. You are also to use any information of the other party to your client’s advantage. It is in my view impossible to perform Single Agent-Dual Agency

  28. Leslie Hutchison says:

    Personally, I will never do dual agency as I cannot serve two masters and agree with Joe Vita for all the reasons he stated.

    I have experienced an agent try to get my client by saying they won’t cooperate with other agents, so if the buyer doesn’t use them as a dual agent, they can’t buy the house! Luckily my buyer wouldn’t deal with such a shady type, and they saw they would not be represented at all.

    As a listing agent, how can I promise to do the best job possible for the seller, who hired me to protect his interest and sell his home for the best price and terms, then turn around under dual agency where I cannot give him any advice that would harm the buyer? It takes away the ability to negotiate on either party’s behalf. As the seller’s agent, if I think that the buyer is in love with the house and would come up $20,000 to avoid losing it, I am in a much stronger position to negotiate. As a dual agent, my hands are tied and I become a mediocre agent for both parties and truly feel I have been stripped of all my skills and have to keep tape over my mouth. I have to walk a fine line that serves no one except filling the agent and brokers pockets.

    In my listing agreement, I fill in 3% for buyer’s agent, 0% for sub agent and 0% for non agent. I explain to my seller that I will not represent the buyer on the sale of his house, and all the reasons why it wouldn’t be in his best interest to have dual agency. If a buyer chooses to have me write the contract, he is then only obligated to pay me a 3% commission, as we are offering the other 3% to a buyers agent. My seller knows that I am not just looking for a bigger commission, as I earn only 3% either way, so there is no incentive for me to find my own buyer, and he knows I will fully market the listing to and cooperate with other agents.

    This philosophy has earned me many listings against agents that come in telling the seller they will market the home themselves for the first few weeks for a reduced commission if they find the buyer. Sellers see right through greed and self serving agents.

  29. Pingback: The Single-agent Dual Agency debate is revitalized at VARBuzz | Real Central VA

  30. For those of you who have come out in opposition to single agent dual agency, what do you say to this defense of the practice? As I read it, there are some cases where single agent dual agency makes a lot of sense for clients.

  31. Ben – I see the point that Candy makes, but that’s because the option of Dual Agency has left a void of Buyer’s Agents in the state. If Dual Agency was abolished (as I think it should be), then more Buyer’s Agents would start emerging and would step up their game to become experts in their local markets.

    As far as the way Candy handles it, I give her a lot of credit. She is one of the few…the VERY few…that actually handle it properly and ethically. She actually explains Dual Agency in detail and offers a referral to other agents.

    But I still disagree with Dual Agency being allowed in Virginia or anywhere for that matter. It is NOT in the best interest of any consumer in any situation.

  32. Julie Emery says:

    I think it’s obvious that dual agency does a disservice to the consumer. But I think it’s bad for us as agents! And maybe that’s the way to move towards change.
    It’s bad for us because it hurts our reputation. We’ve all heard Lem talk about the statistics on how many of the lawsuits in real estate are generated out of dual agency situations.
    And, it’s bad because even if both parties agree and sign the disclosures at the time, they’re likely to wonder later if they really got the best deal they could. I’ve had plenty of people tell me that while they didn’t object to dual agency at the time they’ve subsequently come to feel that they didn’t get adequate representation.
    If someone has a bad taste in their mouth after a deal, or even a suspicion about their representation, their business and their referrals are lost forever.
    It is, plain and simple, bad business to practice single agent dual agency!

  33. Tina Merritt says:

    I’d like to go back to Al’s example of the attorney representing both parties in a divorce. You stated that if a divorce is amicable, why not save an added expense and just use 1 attorney? Well, the answer lies in the same answer I give agents who want to practive dual agency…it may be amicable now, but what happens as soon as there is an “issue”? Real estate is a business transaction – plain and simple. Dual agency has no place in a business transaction. Would A-Rod allow the team attorney to represent him in his contract negotiation?

  34. Jim Mellen says:

    Credibility is one of the keys to long term success. you’ve got to have credibility with the public, that’s a given. It’s not something you can learn. It’s not something you can borrow and it’s not something can copy from another agent. But credibilty is equally if not more important when dealing with our fellow agents. There’s just enough doubt created whenever I am working with an agent on the other side of a deal that has done dual agency. I watch them carefully because if they’ll take a chance with their own client or customer, how far will they go with me and my client? Consumers are intelligent, they will weed the bad agents out.

    I do agree with Candy’s situation and respect her approach. With her unique niche and understanding of who she’s dealing with and what she’s selling, the COE is written well and allows her to conduct her business appropriately and successfully by the sound of it. My problem is with the agent who has the choice to do the right thing but doesn’t.

  35. Donna Carpenter says:

    Full disclosure is the key! I think it’s all in the delivery of that disclousre that might help or hinder the understanding of dual agency. If one explains simply – without spin – that there is “no representation” when dual agency enters the picture, one must ask how many buyers and sellers will join up! They must understand – and the agent too – that the agent’s role changes dramatically. If the seller has sold a home before, and the buyer has also owned previously, possibly representation during any negotiation is not a critical component to the transaction. However, if the first-time seller is told that “it’s just another way to get a buyer”, or, “the buyer can’t have my assistance either” …are they really going to fully comprehend what they’re giving up? …probably not until a dual agent offer comes in, at which time they may feel somewhat abandoned by their agent. I was both the listing and selling agent on a sale recently. The seller had declined dual agency when the listing was signed because she wanted full representation. I explained to the buyer at the first showing that the seller was my client who needed full representation, and that I could offer them the same in the form of designated agency by asking my broker to select an agent to help them. Further, I explained that if they chose to make an offer with me as the seller’s agent, I promised honesty and full disclosure of any material defect. It took about a month for the buyer to come back and make their offer, and the whole transaction went very smoothly. I credit “full” disclosure of agency, AND, the buyer’s educated market sense in bringing about a satisfactory closing. If the buyer understands that more falls on their shoulders …especially in making decisions about price and terms of an offer, that’s fine. Buyers today are more savvy, but I do worry about the folks who lack market/area knowledge before making a decision to purchase, especially first time buyers. Sellers too deserve guidance at a time when it can be an emotional roller coaster, especially if the reason for selling is a family crisis …if they perceive that the buyer is being aided by the agent in gaining the upperhand, things can go south fast. Yes, we as agents are salespersons, but we are also educators in helping the public understand the market …it is in this role that we need to be generous with our knowledge, and competent in its delivery.

  36. Pingback: Forging a Vision, Dropping Rhetoric & Leading Foward | national real estate opinion column - agentgenius.com

  37. Jim Mellen says:

    I would love to see this single agent dual agency abolished. I’ve gotten on my pulpit many times when I come across the agents who have done it. They have argued that both sides agreed to it in writing after fully explaining the process and what the clients/customers would be giving up. And I can’t believe that any client would agree to that when it is explained fully. I’ve been successful in converting some of these agents and I know it will only be a matter of time before everyone agrees that no one wins in single agent dual agency.

    I use one example when I am confronting a seller or buyer who doesn’t understand and have yet to come across the one who after thinking about it for 6 seconds, thinks dual agency with one agent is OK. I simply say to the client “If my seller finds out the buyer might have paid more, or my buyer finds out the seller would have accepted less, would you ever recommend me to your friends?” Can it be explained any easier?

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