Stepping up to the plate – Single Agent Dual Agency

OK OK I’m going to step up to plate. (do I need a flame proof suit?)

First of all DISCLOSURE: Often I am a dual agent, I work in a niche market – horse properties & farms. I am broker/owner of a small firm Valley of Virginia Real Estate, within my firm I have no possibility of Designated Dual Agency.

Horse Property

When I started in Real Estate I thought seriously about being an Exclusive Buyers Representative but as I started working with buyers & showing farms I discovered many, not all, listing agents of horse properties just did not understand the horse aspects of the property. They were trying to sell the house that oh btw there is a “barn out there too, I’ve never been in it but I think you can store about 6 ponies in it & there’s a riding rink too”. Hint – horse folk usually could care less about the house -they want all the details about the horse facilities. After seeing this type of information more times than I want to count, I started listing horse properties so I could better serve the clients – both sellers & buyers. I guess you could say lack of specific knowledge on other agents part drove me to Dual Agency.

My average time from first contact with a seller or buyer client to closing is often well over a year. I build relationships with clients based on the expected Real Estate expertise & my clients very specific needs which require special knowledge of horses, land, riding styles, hay sources, local instructors, equine vets, show schedules, just to name a few. Most of my sellers require & expect me to be present for all showings – most live in fear of something happening to their horses, dogs, cats. They also know most agents just flat don’t know enough about the horse world to be effective. Buyer clients seek me out because they know I have specialized knowledge of horses & riding.

“Candy has had horses and ridden for a long time and so she was able to understand how functional the farm was. Also, horse people have their own language and she “fit right in” with whoever she showed the farm to”

I’ve had more than one client tell me that if I’d shown up in a fancy car with a dress & heels they would have shared a cup of coffee with me, thanked me for my time & said goodbye. I am one of those blue jean wearing , big loud truck driving agent! So what does all this have to do with dual agency?

On first contact with each seller or buyer I explain agency with emphasis on Single Agent Dual Agency. I let them know up front that my firm cannot offer Dual Designated Agency. I send them home with information on Agency to read. If they are not comfortable with Dual Agency as a possibility, we either make arrangements for referral, identify another agent with another firm that can represent their interests or part ways on good informed basis. This conversation is repeated throughout the process.
Do I recommend Single Agent Dual Agency for everyone? NO!!!
It takes a special REALTOR. One that is a stickler for COE & one that is willing to work hard to do it right. Agency & Agency Law must go hand & hand with the COE. Its hard work, it takes extra time, specific education (I highly recommend taking Marcie Roggow’s Class: Negotiating in Dual Agency), specific consent ( IMHO – above & beyond signing the VAR Form on Agency), specific rules during negotiations, specific education to all parties & above & before all – DISCLOSURE!

My farm at the end of the rainbow

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16 Responses to Stepping up to the plate – Single Agent Dual Agency

  1. Candy, You bring up an excellent point about working in niche markets such as yours. You are actually in a position that leads to opportunities for dual agency just based on your expertise.

    You are exactly right about disclosure, as well. Disclosure and education is KEY. The fact that you address these issues up front with your clients is a credit to you as a professional.

    Dual Agency CAN be practiced properly. The problem is that for many agents, the motivation behind dual agency creates problems that might not otherwise exist. There is also a tremendous amount of misunderstanding amongst professionals about what can and can’t be done.

    I often wonder how eager agents would be to practice dual agency if the commission was only one side, and not two. . .

  2. Candy Lynn says:

    Zebra:
    Good point: “I often wonder how eager agents would be to practice dual agency if the commission was only one side, and not two”

    I recently went to a re-list appointment where clients had been interviewing other firms. They asked the Broker why no one from their firm had shown the farm “we only sell our listings”. I had educated my clients well enough that they threw him out! The re-listed with me.

  3. Daniel make a good point and I couldn’t agree more. Great post and gives you much to think about.

  4. Tony Arko says:

    Your situation definitely makes a strong case for not abolishing dual agency all together. And I am sure there are other areas of the state where single agent dual agency make sense. And you also recommend a course on how to negotiate dual agency. What if the state of Virginia required a special designation for dual agency before an agent is allow to be on both sides of a negotiation and collect both paychecks? Any thoughts?

  5. Candy Lynn says:

    Tony:
    Good point – I like that. Marcie’s course was certainly eye opening to quite a few agents & Brokers in the room. It’s the only time I’ve seen it offered.
    I’m going to go in DPOR’s course site to see what courses are offered in this area.
    c

  6. Jay Thompson says:

    Candy – I think a niche property/market like you describe is a valid reason for single-agent dual agency. We have a lot of horse properties out here (yes, there are horses in the desert…). I know *nothing* about the nuances of such properties or the folks that buy or sell them, so I refer them out. If I were to represent clients in this niche, they wouldn’t get nearly the attention they deserve.

    Disclosure and education are critical. I’m not familiar with VA law of course, but in AZ we have a standard dual agency form from our state association. In my opinion, it’s a little weak, so in the past if we were in dual agency situations we supplemented it with much discussion and education.

    The form (and education) are still required in AZ if the brokerage is in a dual agency situation. I think different agents in the same brokerage can fairly represent both parties. But — in a “normal” transaction — I really struggle with same-agent dual agency.

  7. Bill Burruss says:

    For twenty-years I’ve worked only in land. It’s been maybe eight years that I’ve called myself a niche Realtor. – Others first called me the land Realtor. The toughest part of educating the public today has been the Seller, not the Purchaser. The Seller knew me and my reputation. Today I have to place my knowledge of agency above my reputation. I have to educate those that have known and trusted me because it is the best thing for them, our association, and me.

  8. Jim Duncan says:

    While I certainly understand the need for niche-agency and tentatively/hesitatingly like the concept of a separate, distinct license/certification for single-agent dual agency …

    How does one negotiate price? If you try to, as the “buyer’s agent” negotiate downwards, aren’t you violating your fiduciary duty to the seller to get them the best and highest price for their property?

    And vice-versa, if, as the “seller’s agent” – you try for a higher price, aren’t you possibly working against your buyers’ best interests?

    It’s a tight-rope, and one that has far too many downsides – for all concerned.

  9. Hmmm……Negotiating the price can be a problem then.

  10. Randy Morrow says:

    Dual Agency requires a total commitment by the realtor to ensure that both parties understand my role. I do 5-7 dual sales a year of co-ops in VA. I explain that I become a ‘passer’ of information. Each client has to understand that I will do dual agency only if there will not be a large amount of negotiating. If there is (and I determine this in my intial conversations) they are told that I will get another agent to do the negotiating, or they may chose one. Each client is given the same comps for the past three months–active, undercontract, & sold. Educating the client up front is definitely the first key to successful dual agency; making sure that I understand my fiduciary duties is key.

  11. Why not just represetn the Seller and treat the Buyers as customers? Under Virginia law full disclosure is required as to the condition of the property and you can do all the ministerial work necessary. You can offer price advice but of course they may look at it with a jaundiced eye unless it makes sense standing on its own.

  12. The entire process takes over one year. I’m not sure if I could stomach this. However, its seems as though you have discovered your niche. I bet you do very well with word of mouth advertising. I’m sure with your knowledge people seek you out based on your expertise. How many agents really know about horses and real estate?

  13. Bob in Texas says:

    Its does seem as you have found a specific niche and I am sure you get a whole bunch of referrals as well. And how confusing is dual agencies to the buyers and sellers. Are most people open to the idea of dual agency with you or must you refer them to another agent.

  14. Jim Rake says:

    Jim – good questions.

  15. Candy Lynn says:

    Jim & Jim:
    Yes it can be a tightrope but with full disclosure it can work.

    Price negotiation: I often have both parties around the kitchen table where I act as a moderator.

    Bob in Texas:
    Most prefer the dual agency because of the educational process & relationship that has been formed BUT there are times that I do indeed refer a buyer to another agent. Examples: Complicated negotiations, potential hostility towards other party.

  16. This is very up-to-date info. I think I’ll share it on Delicious.

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