Dual Agency-Why Buyers and Sellers Should Avoid It

There can be some confusion when it comes to the role of real estate agents whenever a real estate transaction is being executed. In most states, an agency disclosure form is required and should be signed by both seller and buyer. This form is typically a disclosure, not an agreement and details the roles of each party in the real estate transaction.

In a typical real estate transaction, there is either a single agent or a dual agent. A dual agent is a real estate broker who represents both the seller and the buyer. This is important because, in a traditional real estate deal, the broker only represents the seller. Sometimes the lines become blurred and the broker crosses over to the buyer and negotiates a better buying price. While this is a common practice in the real estate arena, it is considered unethical and can even illegal in many states. In a dual agency setting, the broker is required to disclose that he or she is working with both the seller and the buyer.

Single Agency

In a typical real estate setting, the buyer works with a single buying agent. Sellers, on the other hand, work with brokers or selling agents who are working in a single agent capacity listing agents. Legally, these single agents owe a fiduciary responsibility to their clients and documents are signed to this effect. For instance, they cannot share confidential information with the other party or the other party's agent. Single agency agents must exercise due diligence in the performance of all their duties, be forthright, and disclose all material facts.

Dissecting Dual Agency

Owing to the fact that all real estate agents are licensed under a real estate brokerage, it is not uncommon to find the same agent licensed by the same broker as the listing agent. This situation creates a dual agency. Even if the agents are located in separate offices and do not know each other, nevertheless a dual agency scenario exists because they are both licensed by the broker (one representing the buyer and the other representing the seller).

Here is how dual agency essentially plays out in the real world: after qualifying for a home, the buyer works with a real estate agent who in turn is registered under the same brokerage firm that has listed the home. In this scenario, a dual agency has been created by that real estate agent. In many cases, the agent proceeds as if it is a single agency transaction. The law, however, requires that this dual agency is disclosed.

A listing agent for a property who also represents the buyer of that property automatically becomes a dual agent. Because dual agents cannot operate in a fiduciary relationship with both the seller and buyer, they must treat both equally. They can offer advice to both but cannot disclose confidential information. There are instances where real estate agents have found themselves embroiled in lawsuits for failing to adhere to these standards.

Consider the complications that a dual agency can cause.  If an agent is adamant about proceeding in the representation of both transactions be careful and consider hiring an attorney to review the transaction thoroughly before signing on the dotted line.

Learn more about C21 Lady of the Lakes Realtors and the numerous services they offer including: buying a new home, selling a home, or renting a home at www.ladyofthelakes.com.  To contact one of our real estate agents call 734-426-6060 today.

Essential Questions to Ask When Choosing a Realtor

When it comes to buying or selling property it is extremely important that you enlist the assistance of a real estate professional in the area you are looking to buy or sell the property. Regardless of whether you have some amount of real estate experience you cannot equal the knowledge that an agent that is from the area that you are looking at has of the local market.

When you find a local realtor that you think you might be interested in working with you should sit down and discuss things in order to select the best one for your needs. We put together a list of essential questions that should help you to glean all of the information from that you will be able to use to make your final selection.

10 Essential Question to Ask When Choosing a Realtor

How many years have you been in the area?
This is extremely important to get to know whether or not they have enough knowledge of the local community. If they don't have many years of experience, this should give you a reason not to go with them.

How many clients are you currently working with?
Finding out how many people they are working with will give you an idea of how much time they could devote to your needs.

Do you work with most buyers as compared to sellers or vice versa?
If an agent works mostly buyers or mostly sellers, they may not have as much experience with the other and that could be an issue.

Is there a specific area that you cover?
Finding out up front if your agent is tied to a specific area can end up limiting you in your opportunities.

Does your agency use teams and are you part of one?
Knowing if your agent is part of a larger team is a good thing to know so that you know that you could be working with another agent at some point.

Are you able to handle a few of these unique situations?
Put together a list of unique situations and see how they respond to each specific situation.

How do you prefer to handle communication with your clients?
It is a really good idea to find out right off the bat how you will be communicating with your agent.

 Do you have a rapport with some of the local professional groups?
It is really important for an agent to have a really good working relationship with the key vendors that work in the areas related to real estate.

Can I get 3 references with contact information?
It is always important to get references so that you can find out what other people who already worked with think about them.

Do you have any questions for me?
Last but certainly the least, ask if they have any questions.

Learn more about C21 Lady of the Lakes Realtors and the numerous services they offer including: buying a new home, selling a home, or renting a home at www.ladyofthelakes.com.  To contact one of our real estate agents call 734-426-6060 today.