Category Archives: dual agency
The Single-agent Dual Agency debate is revitalized at VARBuzz
I know some members of the Virginia Real Estate Board have opinions; why don’t they share them now?A sampling: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?… 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….Sellers see right through greed and self serving agents.
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Seeking a defense of Single-Agent Dual Agency
Will anybody defend the practice of the same Realtor representing both a buyer and seller on the same transaction? Find out at VARBuzz.
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Why Should You Use a Realtor instead of a Builder Sales Agent?
Simple. If you hire an exclusive Buyer’s Agent to represent your best interests, you will have representation. If you work with a builder’s sales agent, in my opinion, you are on your own. (Thanks to the person in Las Vegas who came to my site searching for this answer)I mentioned this a few weeks ago as well.
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Stupid is as stupid does
Recounting a tale from the trenches in the Charlottesville Realtor/real estate world …Another Realtor was showing buyers a development in Charlottesville and an agent was onsite holding an open house. As the buyers looked around, the Buyer’s Agent (BA) and the sellers’ agent (SA) got to talking.BA: This road in front of the development: It goes into a neighborhood, correct?SA: Yes, but you don’t want to take them that way. It looks much better the way you came in.BA: I understand, but I want them to see what’s around this property, going both ways.SA: If you go back the way you came, you can show them how close the grocery store is.BA: Thanks, but I can do both.SA: You should really go out this way – it’s much better.When the Buyers and the Buyers’ Agent got in the car – the wife asked, “Which way are we leaving?”… Then, I’ll show you how close this is to grocery store, restaurant, etc.” Turns out, the wife had heard the Realtors’ conversation.1 – Your Buyer Agent is supposed to look out for your best interests.2 – Had this been a Dual Agency situation, do you think the buyers would have been more or less likely to see the “other” areas?3 – Realtors don’t have an obligation to assess an area’s safety level, but they do have an obligation to be the “source of the source” – provide references by which the clients can determine for themselves.4 – Recognize two things – not all Realtors are focused solely on “making the sale”; but some are.
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Clarifying my stance against Dual Agency
I have long argued against Dual Agency, and need to slightly redefine/clarify my opposition – My beef is with Single Agent Dual Agency where the same agent represents both sides of a transaction. In principle and practice, Dual Agency, also known as Designated Agency, when practiced by agents in the same firm should be legal and ethical.From the Virginia code:”Designated agent” or “designated representative” means a licensee who has been assigned by a principal or supervising broker to represent a client when a different client is also represented by such principal or broker in the same transaction.”Dual agent” or “dual representative” means a licensee who has a brokerage relationship with both seller and buyer, or both landlord and tenant, in the same real estate transaction.
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Another reason blog “leads” are better
The differences between leads generated from blogs and “leads” purchased through one of the various blood-sucking non-value-adding referral companies are many. Some of the most crucial differences are that blog clients:1) Are typically further along in the process of hiring an agent (whether buyer’s or seller’s representation)2) Have vetted me, at least a little bit, by reading what I have written over the past 34 months, which makes the process more efficient for both of us.3) Frequently are more aware of the current market and some of the factors impacting the market.4) They’re not “leads” per se, they’re typically conversations about whether we might work well together.4) I would never have gotten this question from a blind internet lead:(b) We’d obviously prefer to avoid dual agency if at all possible. If an appropriate listing comes up through your C21 office, though, what safeguards are in place to protect both sides?I love that this question is asked up front! Fortunately, I have an opinion on dual agency – get rid of it.All in all, the hours spent reading and writing every day are worth it for my own knowledge and ability to represent my clients.
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A call for an end Cooperative Compensation
As a profession, we need to rid ourselves of Cooperative Compensation and the practice of the listing broker paying the Buyer’s Agent.Cooperation between Brokers need not go away…. That is always a fun conversation with first-time homebuyers as well as more-savvy ones.Buyer: So, how do you get paid?Buyer’s Agent: Well, the Seller pays me.B: What?BA: Well, not really, you are paying for the house, and you are getting the mortgage, but the Seller has agreed to compensate my company for my services.B: What do you mean?BA: It’s complicated.B: Well, am I bringing the check to closing?BA: Yes.B: Then how and why is the Seller paying you?BA: Because that’s the way it’s always been, and the laws have not changed sufficiently to allow for buyers to finance their representations’ commissions into the mortgage, Realtors have not adapted to the new realities and they are stuck in the mindset from when all agents represented the Sellers.B: But why is the Seller paying you?It’s easier for the Buyer’s Agent to just take whatever the Seller is offering – there is no negotiation with the Buyer about the Realtor’s compensation, so much so that often times the answer to the “How much is your fee” question is “It’s free to you – the Seller pays me!”I went around and around with some of my clients for several hours one time, agreeing with them the entire time how convoluted, antiquated and archaic the Buyer’s Agent’s compensation arrangement is, but there was nothing we could do to change it…. If Realtors want to equate themselves with other professionals, we need to be paid that way, heck we could lead the charge towards transparency in fees.Attorneys are paid by their clients, except when they lose, and do we really want to equate ourselves with that side of the legal profession?… The time may be right, and beneficial to everybody – consumers, Realtors, regulators – to change how we do business to a more transparent, ethical and professional way of working and compensating.Maybe we can rid ourselves of Dual Agency while we’re at it.
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Pulled from the comments – More on Dual Agency
“Dual agency practiced by one agent is always a conflict of interest for the agent even if legal dislcosure is made.In a designated agent situation, the principal broker is by law acting as a dual agent and is in a conflict of interest position even if legal disclosure is made.Virginia law requires disclosure of dual agency but our Code of Ethics requires “informed dislcosure”…. It doesn’t go far enough in my opinion.Unfortunately, the laws in our state regarding dual agency (including designated agency) do not require an agent to specifically disclose to either seller or buyer the number of ways in which his “representation” of them will change once dual agency is invoked by him or his broker.Specific examples should be given such as “I can no longer advise you on value or offering price”. They won’t be hearing information such as “I can no longer inform you about the wild and loud parties that go on every weekend at the house next door”.When signing most listing agreements sellers agree in advance to go along with the a potential dual agency without this vital information. The agent is already free on the seller side to work as a dual agent as long as his buyer client agrees.I wonder how many well informed sellers or buyers would agree to go along with it when offered if they knew that “their agent” could no longer be their advocate but would merely be providing ministerial services?I wonder how many times the request to agree to dual agency is presented to a seller as the agent is holding an offer in hand.I wonder how many times the act of bringing in a second agent to “represent” one side in a designated agency situation is accomplished at the last minute with little knowledge of the new client by the new agent and without actually being familiar with the property or showing it to him.Our Code of Ethics requires Realtors to ALWAYS place the best interests of our clients ahead of our own.
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