Agents Representing Both Sellers And Buyers
AGENTS REPRESENTING BOTH SELLERS AND BUYERS
A buyer's agent who works for a firm that has listings, in most states, is called a dual agent. The dual agent is an agent that sometimes represents sellers and sometimes represents buyers and sometimes even in the same transaction. Dual agents may try to convince a buyer that the service being offered is equal to that of an buyer broker or buyer agent. The simple truth is, it is not. Using a dual agent creates the possibility similar to that of having one's lawyer representing two sides of of a legal dispute. It is impossible to have any one's best interest represented when the buyer and the seller are working with real estate agents from the same firm. The larger the firm, the more listings they have. The more listings they have the less likelihood of a buyer getting the representation they deserve.
Some real estate brokerages and their agents choose to represent both the seller and the buyer in a transaction. Only with the knowledge and informed consent, in writing, of both the seller and the buyer, would this be allowable by most state laws.
This type of representation (or lack of representation) has been defined as Dual Agency. The agent will not be able to provide the full range of fiduciary duties to the buyer or the seller. The more listings the firm has, the more dual agency can occur.
The obligations the dual agent limits him or herself to are also subject to any specific provisions set forth in an agreement between the broker and the buyer and seller. A real estate agent acting as a dual agent must somehow carefully explain to both parties that the agent is acting for the other party as well, without being deceitful in any way.
The real estate agent should explain the possible effects of dual representation, including that, by consenting to the dual agency relationship the buyer and seller are giving up their right to undivided loyalty.
WHAT TO EXPECT FROM CONSENSUAL DUAL AGENCY
(Real Estate Agents That Call Both Buyer and Seller Their Clients)
What does the term consensual dual agency actually mean?
This happens to be the new practice of most of today's major real estate brokers. The broker who practices as a disclosed dual agent believes having consent by all parties to the transaction makes this practice legitimate. Disclosure of dual agency is not enough; most courts require yet another step: that the consent be informed. That is why it is referred to as "Consensual Dual Agency". The term encompasses both disclosure and informed consent. It is more than checking a box on a form. Knowing that this practice is essentially being done in virtually every state, you as a home buyer or seller should absolutely be sure you completely understand consensual dual agency.
buyer brokers and buyer agents are opponents of the concept of dual agency and protest that it is not morally possible for any real estate brokerage firm to "serve two masters" and simultaneously fulfill the duty of absolute fidelity to both regardless of some changing laws that may end up permitting it. agency, where each party has his or her own representative from separate real estate firms, in our opinion is ideal. However, major real estate firms are continuously trying to figure out a way to minimize the risk enough to keep justifying the practice.
An agent acting as a dual agent must explain carefully to both the buyer and seller that the agent is acting for the other party as well. The agent should also explain the possible effects of dual representation, including that by consenting to the dual agency relationship, the buyer and seller are giving up their right to undivided loyalty.
A buyer or seller should carefully consider the possible consequences of a dual agency relationship before agreeing to such representation.
Just how much advice is the average real estate agent or relocation company giving when it comes to dual agency? If the real estate agent has any doubt about the ability of a home buyer or seller to comprehend completely what he or she is signing, outside advice must be recommended by the real estate agent.
A very important aspect of consensual dual agency is the fact that the duty of loyalty is modified or limited according to the terms of a dual agency agreement. It is essentially impossible to act with absolute, full fidelity toward both parties in the transaction. Therefore, the parties must agree to compromise and limit the role of the real estate agent.
Most states vary as to when legal disclosure forms should be signed.
We believe full disclosure, of all the consequences from the various types of representation, be introduced to the buyer or seller before either the buyer or the seller hires a real estate firm and its agent to represent, what they believe to be, their best interests. We also believe that all advertisements of Real Estate firms should disclose fully the type of representation they offer.
WHEN AND HOW CAN DUAL AGENCY OCCUR
Dual agency most often occurs when in the same transaction one sales agent of the broker is the listing agent and the same agent, or even a different agent, of the same brokerage firm is the buyer's agent (even if the so called buyer's agent is from a totally different office yet still owned owned by the same broker). The broker would be a dual agent, as are all the real estate agents in the broker's company. Most state licensing laws, if not all, have made the designated broker/owner responsible for all the listings the company has. The broker/owner in that case would be responsible for all the buyer-clients of the company as well. Therefore the designated broker/owner owes the fiduciary duty to all the company's buyer and seller-clients.
The broker/owner delegates a portion of the broker's fiduciary duty and other responsibilities to his/her real estate agents. If dual agency is fully disclosed to the buyer and seller-clients alike and they have given their informed consent at the time required by state law, the risks of a law suit, against the broker is greatly reduced.
There is a common misconception, even amongst real estate agents and their brokers, that dual agency does not exist if the buyer is represented by one sales agent, and the seller is represented by another sales agent. This misconception occurs even more so when the sales agents work in different offices. In most cases it simply is not true, because of the fact that each of the sales agents are legally considered to be agents of the broker. Some states are now passing laws to allow designated Buyer Agents in a Real Estate firm which would legally do away with dual agency.
Consensual dual agency is a hopeful solution for companies that are attempting to keep both sides of the transaction by claiming to represent buyers and sellers as clients. Many companies, large and small, are adopting consensual dual agency as a company policy.
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