What Is Dual Agency? – Real Estate News and Advice – realtor.com

Dual Agency Cons for the Seller: Your agent cannot advise you as thoroughly when acting as a dual agent. Impartial facilitation is required.The opportunity to earn the full commission might tempt an agent to coerce a deal you would not otherwise accept.

Your listing agent cannot negotiate the highest and best price for you if also negotiating the lowest and best terms for the buyer.

Your agent might inhibit access to your listing by other agents with buyers.

Remember, every real estate transaction is different. The best way to ensure you are properly represented is to clarify your relationship with your agent either through a listing agreement or an exclusive buyer agency agreement.Once everyone’s roles are outlined, there is little room for surprises—even with dual agency.

Source: What Is Dual Agency? – Real Estate News and Advice – realtor.com

Dual Agent: A Misunderstood Concept

DUAL AGENT: A MISUNDERSTOOD CONCEPT Written by Benny L. Kass on Monday, 25 November 2013 2:27 pm

Is the real estate agent you are working with representing your interests? Is she your agent? Is he a designated agent? Is she a dual agent? Do you know, and more importantly, does your agent completely understand his/her role?For many years, the agent represented only the seller. If you were selling, you would list your home with a real estate broker – called the “listing agent”. If another broker/agent found a potential buyer who entered into a sales contract, that agent was the “selling agent”.Today, however, there are many forms of agency: single agency: the agent represents either the seller or the buyer, but not both in the same transaction;designated agency: (also referred to as “designated representation”). Here, the seller has a listing agreement with a broker and the buyer has an agreement to be represented by another agent/broker – but who is affiliated with the same real estate company.Brokers and agents in the Washington metropolitan area are required to provide disclosure of their role to prospective clients. If there is a designated representation, all parties are put on notice that the agent must not disclose information obtained in confidence to other parties in the transaction.Dual representation: (also called dual agency). Here, the agent represents both the seller and the buyer. According to the District’s disclosure form, “the ability of the licensee (the broker) and the brokerage firm to represent either party fully and exclusively is limited. The confidentiality of all clients must be maintained.”This is the area of real estate brokerage that is extremely confusing. According to a survey compiled this year by the National Association of Realtors, many agents who responded do not understand dual agency, cannot explain it to their clients and in fact do not provide the State required disclosures.In Maryland, although the disclosure forms use the term “dual agency”, in fact it really is the same as the District’s “designated agency”. The form that potential clients must sign states “if all parties consent in writing, the real estate broker … (the “dual agent”) will assign one real estate agent affiliated with the broker to represent the seller… and another agent affiliated with the broker to represent the buyer…” Agents in Maryland are not permitted to represent both buyer and seller.Virginia has a new law which will take effect July 1, 2012. It is a comprehensive approach to enhance the agency relationship disclosure requirements between agents and those they represent. Accordingly, single dual agency is permitted, so long as the agent has provided the potential client the written consequences of such practice and obtains the written consent of the client.What does the agent have to disclose?the agent will be unable to advise either party as to the terms, offers or counteroffers;that the agent cannot advise the potential buyer of the suitability or condition of the property;that the agent will be acting without knowledge of the client’s needs, or experience in real estate, andthat either party may engage another agent if either requires additional representation.The question then becomes: why should I – as a potential buyer or seller – agree to a single dual agency arrangement? What’s the benefit to me?Recently, the New York Office of General Counsel issued a memorandum entitled “Be Wary of Dual Agency”. The memo cautioned consumers that “by consenting to a dual agency, you are giving up your right to have your agent be loyal to you, since your agent is now also representing your adversary. Once you give up that duty of loyalty, the agent can advance interests adverse to yours. For example, once you agree to dual agency, you may need to be careful about what you say to your agent, because, although your agent still cannot breach any confidences, your agent may not use the information you give him or her in a way that advances your interests.”And, while most agents are honest, there is always the possibility that what you tell the agent will get back to the other side.Many brokers – and legislators who allow dual agency – believe that it is not a problem so long as buyers and sellers are fully informed and sign a written disclosure form. But in my opinion, that is not the real world. Buyers get excited about a new house and do not pay attention to the various documents they sign – including the real estate sales contract. Similarly, often the issue of dual agency arises only after the seller has signed the standard listing agreement ; the seller’s broker suddenly finds a potential buyer who is not represented by counsel or by another agent.My advice to buyers and seller. While I have serious reservations about the designated agency arrangement, I can live with it since there are at least two agents involved – one r

Source: Dual Agent: A Misunderstood Concept

Dual Agency is “Bait and Switch.” | CAARE – Consumer Advocates in American Real Estate

Dual Agency is “Bait and Switch.”Dual agency is a way for brokers to unfairly get paid double. It is most prevalent at large brokerage firms (we recommend avoiding these). Commissions are already arguably too high and savvy consumers can avoid paying a double fee while also preserving their right to representation.Dual agency occurs when real estate agents from the same firm claim to represent both the buyer and the seller in the same transaction. Representing adversarial interests at the same time is a legally impossible situation (“serving two masters”) and is illegal in every other profession. Worse, brokers are incentivized with a double fee if they manipulate you to agree to this.Dual agency (also known as Designated Agency) is often  branded (even marketed) to consumers by large brokerage firms as a thing of value – it is not. Although the term “dual agency” seems to infer an important relationship of trust and reliance, dual agency is a betrayal in which the firm becomes a secret double agent that only gets paid double if they can convince you to do it.In order to avoid dual agency, seek out smaller, highly qualified and independent brokerage firms that understand and agree to other more favorable relationships such as Exclusive or Single Agency representation.Negotiating Tip: Sellers, instead of negotiating a bundled commission, negotiate each part of the commission. Do it yourself (“unrepresented”) buyers typically receive no financial benefit for their work. Instead the listing broker confiscates the entire amount (a hogger). So instead of negotiating a 5% commission, negotiate how much your listing broker will get (2% for example), negotiate how much will be offered to buyer brokers and do it yourself buyers (3%). When buyers are searching, yours will stand out because buyers stand to save 3% only on your house by doing it themselves. Listing brokers should not care whether the 3% is paid to buyer brokers or buyers. If they claim that they have to do more work, then keep shopping until you find a listing broker that is willing.Looks like this:Listing Broker: 2%Buyer Broker or Do It Yourself Buyer: 3% Bait and SwitchDual agency is potentially one of the worst “bait and switches” possible because it involves the “switch” (abandonment) of a trusted advisor and advocate. Even with disclosures, consumers rarely expect the change in relationship (and often never even know that it occured) that comes with dual agency and they are almost never prepared for the complete abandonment that defines dual agency. And despite the degradation in the level of services in a dual agency situation, the client ends up paying double. Should Less Service Equate to a Lesser Fee?The Consumer Federation of America came up with a recommended fee schedule that suggests a sliding downward scale to align the degradation of services that results from dual agency with a lowering of the fee Realtors charge.  According to them, less service should translate into a lower fee.  It is Illegal for Attorneys to Practice Dual AgencyIt is illegal for attorneys to engage in dual agency in adversarial relationships. Yet, attorneys possess far higher entry level licensing standards and education requirements than do Realtors.  In addition, attorneys are trained in how to manage conflicts of interest. Realtors are not.Attorneys must have a post graduate doctorate degree and pass a State Bar Exam in order to become licensed. They also have a meaningful Code of Ethics that provides substantial and public penalties for infractions. Even with their thorough training in agency relationships and conflict management, attorneys avoid dual agency because it places too much risk on their clients.Licensing requirements for real estate agents are essentially non-existent.  The minimum standard to obtain a real estate license in the United States doesn’t even require a high school diploma and an individual can often obtain their license after taking only a 30 hour class on how to pass the exam.  And their “Code of Ethics” is designed to protect Realtors, not clients and is enforced by peers who are members of their trade association and all decisions are kept private.  Real estate licensing laws are typically lax as is enforcement of those laws.There really is no comparison. Realtors do not possess the necessary training or education to engage in such a complex relationship as dual agency.Despite the complete lack of minimum standards and the incredible complexity and danger of dual agency, it is now legal in most states for Realtors to practice dual agency.Attorneys run conflict checks to avoid dual agency and have for the most part bifurcated their profession into plaintiff and defendant firms. Nothing like that system exists for Realtors. We believe that it should. To make matters worse, Realtors don’t understand dual agency, they have little training in conflict management,and disclosure forms are misleading and inadequate.  Consumers don’t understan

Source: Dual Agency is “Bait and Switch.” | CAARE – Consumer Advocates in American Real Estate