Oct 21, 2008
Time to Look Again at Agency in Virginia
21 Oct 2008
Posted by VAR
It is incumbent upon us, as the keepers and practitioners of the industry, to constantly evaluate ourselves and our profession. The time has come to re-evaluate Agency as we know it.
We had a great discussion here in March - Part One and Part Two and an eloquent defense (albeit flawed in my humble opinion) of Single Agent Dual Agency by Candy Lynn.
VAR looked at Agency from 1992 until 1994 and the law went into effect on July 1 1995.
A lot has changed since our Association last looked at Agency (for starters, the Internet has redefined our world).
The time has come to re-examine the state of Agency.
“Realizing that cooperation with other real estate professionals promotes the best interests of those who utilize their services, REALTORS® urge exclusive representation of clients; do not attempt to gain any unfair advantage over their competitors; and they refrain from making unsolicited comments about other practitioners.”
~ Paragraph 5 of the Preamble to the REALTOR® Code of Ethics (emphasis mine)
“Don’t forget the problems caused by being a Dual Agent. The difficulties associated with this perfectly legal agency relationship seem to be on the increase. Be very careful to communicate and explain dual agency to prospects and clients and avoid dual representation if at all possible.””
~ Schafer Oglesby, Virginia Real Estate Board Chairman – 2006 Newsletter
“Virginia law merely permits you to engage in it with the informed consent of the parties provided you act accordingly. Their informed consent, once obtained, does not mean the conflict ceases to exist, merely that the clients consent to your acting as a dual agent notwithstanding the existence of the conflict. This is an important point to remember: the conflict does not go away just because you get the requisite consent. You still must act in a manner consistent with the conflicting interests of your clients.”
~ Lem Marshall, VAR Legal Counsel “Commonwealth Magazine 2004″
If you’re an agent practicing Dual Agency and get sued, how long do you think it’ll take an attorney to pull up these documents and the large number of posts warning against Dual Agency? A jury is going to have a hard time understanding why agents still pursue this archaic practice, while everyone is warning against it.
The purpose of writing this post is to reaffirm the need to examine and study at the continued viability of Single Agent Dual Agency and to clarify once again that this is not a call for an end to Designated Agency (whereby one company represents both sides of a transaction) but a request to look at one agent representing both parties. Let us look at the greater good of the industry and profession and the perception of the industry by the consumers whom we are purportedly “representing” rather than a short-sighted look at our pocketbooks.
(Did you know that Dual Agency has been illegal in Colorado since 1 January 1994?)
It would be far better to take the lead in examining this than to be lead by the courts/legislators/regulators, no?
Other than Candy’s argument, I’d love to hear an ethical argument that doesn’t begin or end with, “but I want both sides of the commission!” (if you really want to go this route, who wants to tackle Divorcing the Commissions?)
Update 22 October 2008: If you happen to feel strongly enough about this, please comment below and/or email VAR’s Leadership Team.
Dual versus Single Agency