This might seem like inside baseball to some, but if you’re involved or thinking about being involved in a real estate transaction in the Commonwealth of Virginia, it’s important.
Dual Agency – Who benefits?
Now … single agent dual agency comes with some required some disclosures (there are still loopholes … and this doesn’t take effect until July 2012).
HB1907 is law. (this is me discussing the bill a few months ago)
From the General Assembly’s site (pdf): (boldings are mine)
“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
Single Agent Dual Agency will be allowed, so long as the following disclosures are made:
The disclosure shall contain the following provisions:
1. That following the commencement of dual standard agency, the licensee will be unable to advise either party as to the terms, offers or counteroffers; however, under the limited circumstances specified in subsection C, the licensee may have previously discussed such terms with one party prior to the commencement of dual standard agency;
2. That the licensee cannot advise a buyer client as to the suitability of the property, its condition (other than to make any disclosures as required by law of any licensee representing a seller), and cannot advise either party as to repairs of the property to make or request;
3. That the licensee cannot advise either party in any dispute that might later arise relating to the transaction;
4. That the licensee will be acting without knowledge of the client’s needs, client’s experience in the market, or client’s experience in handling real estate transactions unless he has gained that information from earlier contact with the client under the limited circumstances specified in subsection C; and
5. That either party may engage another licensee if he requires additional representation.
B. Such disclosures shall not be deemed to comply with the requirements set out in this section if (i) not signed by the client or (ii) given in a purchase agreement, lease or any other document related to a transaction
1 – The agent can’t tell you about price, terms, etc, but may have already (and probably has) advised the opposing party
2 – The agent can’t tell you anything about the property that’s useful or isn’t something you don’t already know.
3 – The agent is an impartial advisor (rather than an advocate for one party)
4 – The agent doesn’t and can’t know anything about the clients wants or needs.
5 – Get another agent to get actual representation.
So … if you’re a consumer interviewing buyer’s agents or listing representation, ask ’em … “do you do single agent dual agency?”
If you’re interested in one perspective about what a buyer or seller gives up in single agent dual agency situation:
From the Washington Post:
— Dual agents: This arrangement may also be called “dual representation.” Both buyer and seller are represented by the same agent. Both parties must sign a form, prepared under the auspices of the local real estate commission. The form requires informed consent. For example, in the District of Columbia, sellers and buyers are put on notice that “when the parties agree to dual representation, the ability of the licensee [the agent] and the brokerage firm to represent either party fully and exclusively is limited.” Maryland law does not allow such dual representation.
On a personal note, this is something I have worked on for years through the various channels and back channels of the real estate world. I’m proud of the Virginia Association of Realtors for listening to their members and for acting so effectively on this. It’s not as strong as I would have liked, but it’ll do. 🙂