Will anybody defend the practice of the same Realtor representing both a buyer and seller on the same transaction?Â Find out at VARBuzz.
“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 â€œinformed dislcosureâ€….Â It doesnâ€™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 â€œrepresentationâ€ of them will change once dual agency is invoked by him or his broker.Specific examples should be given such as â€œI can no longer advise you on value or offering priceâ€.Â They wonâ€™t be hearing information such as â€œI can no longer inform you about the wild and loud parties that go on every weekend at the house next doorâ€.When signing most listing agreements sellers agree in advance to go along with the a potential dual agency without this vital information.Â 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 â€œtheir agentâ€ 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 â€œrepresentâ€ 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.
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.Â 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.
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…. 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…. 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…. 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.”
From the head of the Commonwealth of Virginia’s Real Estate Board, Schaefer Oglesby:We are still seeing numerous cases involving dangerous practice of dual agency…. (italics and bolding mine)The newsletter is here (PDF)…. That’s a succinct summation of dual agency.If the head of the Real Estate Board finds dual agency dangerous, why do so many Realtors do it?… Dual agency should be a last resort, a reluctant decision reached only after full disclosure and explanation to all involved parties.Much more on Dual Agency here.
One of the primary values a Realtor brings to a transaction is representation – representation of his client’s best interests.Â How can a Realtor advocate for the best interests of both parties and still maintain the perception of fairness and full representation?Â In my mind, there is a difference between treating all parties fairly and honestly and being able to advocate with 100% vigor for one party.Â Realtors practice dual agency all the time – successfully.Â Never had I had someone remark how much they appreciated their agent representing both sides.Â I have been told numerous times by clients how they perceived their agent in a shady, less-than-honest manner because that agent had both the buyer and seller….Â In a divorce, would you have the same attorney represent both parties?* As I was researching another post, I came across this post on Dual Agency.Â I read just the headline before writing this post, as I didn’t want to be influenced.
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
…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. … 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 Translated : 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.