Dual Agency, selling advice and how to avoid getting sued

Jeremy has a nice summary of the perils of dual agency. Of note, he also gives an example of why it may be unwise to say never. My call to action is still in the works.

Often times as agents representing the seller, we receive calls or emails on our listings from potential buyers who are not working with an agent and who want to see our listing, or perhaps even write an offer.  As agents working for the seller, how can we do that and still represent the buyer?  It’s called Dual Agency, and it’s dangerous – like running with scissors.  So don’t do it.

Greg notes some of the ways to avoid potential lawsuits when selling your home:

Your Realtor should help prepare you properly to make sure you are not exposed to risk of lawsuit, but here are a few things to keep in mind.

Finally, Daniel writes a very succinct post about pricing one’s home and what to do with that first offer (hint: you may do well to take it) Normally I don’t quote such lengthy parts of posts, but Daniel gave permission and it is very worthwhile:

You are selling your house. Your agent has it listed for $300,000. The home has been on the market for 45 days, not bad for the area, and it is receiving fairly regular showings. Finally, an offer comes in from some interested buyers. The offer comes in at $275,000. The terms are fairly standard, and the house should close in 30 days. You are able to negotiate back and forth and come to an impasse at $290,000. That is $10,000 below your asking price. You aren’t thrilled with the idea of having to take $10,000 less than your asking price, so what do you do?

Remember, more is better sooner. In this case, you have the option of $290,000 today, or NOTHING tomorrow. I know what you are going to say, “but the house is getting showings, and someone could come and make an offer for full price in a week.” Sure, or the house could sit on the market for another 45 days, by which point you will probably have to reduce your price. Remember, in a market such as our current one, there is no shortage of inventory. Buyers have options.

There is also the cost of carrying the house to be considered. With the current offer, you will only have 30 more days of carrying costs. That means only one more mortgage payment, and 30 days of utilities and maintenance. If you wait, chances are you will have to make at least one additional mortgage payment, and continue to have maintenance costs. This doesn’t even take in to account the psychological and emotional value of having your home sold, as opposed to continuing the process.

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4 Comments

  1. Lenore Wilkas May 16, 2007 at 16:04

    My comment to sellers when they see the first offer and it’s lower than they had hoped? A bird in hand is worth two in the bush. The first offer is almost always the best offer they will see. If they won’t work with the buyer to negotiate price upwards, then they soon find out that they may have left money on the table and it’s too late to go back to the first offer because they will have already purchased another property.

  2. Frank May 16, 2007 at 17:12

    Take it and run. 9 times out of 10 in a slowing market the next offere will be for less. If you paid $150k for the place five years ago you made $140K for doing nothing much. 140/150–not much difference really. Be very happy.

  3. Jeremy Hart May 17, 2007 at 01:13

    You have an offer? Run with scissors! Take it! My sense is that the first offer is the best offer, take it and move on.

  4. Jim Duncan May 17, 2007 at 07:20

    Thanks for the comments. This market is different, and adjusting to this new reality, both from a pricing and an expectation point of view is crucial.