Dual Agency Does Not Benefit Consumers
When most people buy or sell a home they pick a great real estate agent they feel comfortable with. Quite often the agent is picked for various reasons including the following:
- A recommendation from a friend or relative.
- An online review or Google search.
- Seeing signs around the neighborhood.
- An advertisement in the local paper.
Whatever the method most smart people will do a careful interview to vet the real estate agent.
As a consumer you want to know there is a comfort level working with the agent.
Do they seem knowledgeable? Are they trustworthy? Do they know the local market?
Whether you are buying or selling you want to have a great experience with someone you feel comfortable giving you guidance.
The basics of real estate sales are pretty simple. A seller’s agent works for the seller and a buyer’s agent works for a buyer.
There is a third, however, that throws many people off. It is what’s known as dual agency. If you are buying or selling a home you should avoid it at all costs.
Depending on where you are located dual agency can have a couple of meanings. For purposes of this article, I am going to discuss dual agency as one agent representing both the buyer and seller in the same real estate transaction.
Let me state the obvious – it is impossible for a real estate agent to “represent the interests of both the buyer and seller in one transaction.”
It is a conflict of interest. You can’t serve two masters that each have a different set of goals. Typically a seller wants to sell for the most money and a buyer wants to pay the least money.
There could be a whole set of other goals as well.
Here is Why Dual Agency is Really Bad
A real estate agent is your trusted confidant. When you want guidance you turn to YOUR real estate agent for advice.
Before you even write up a contract you will want to ask them what to offer right?
When a problem comes up in the transactions like issues from a home inspection, you will want their advice correct?
Well, guess what? By law a real estate agent is no longer allowed to give a buyer or seller advice when they are acting as a dual agent!
Yes, you read that correctly. YOUR agent is now a neutral party in the transaction. They cannot favor or help either party. They essentially become a messenger and nothing more.
When you are selling a home it is really even worse. Think about this for a moment – you are paying your real estate agent tens of thousands of dollars and you get nothing from them. NO ADVICE. Sorry pal, you are out of luck!
Sounds awesome doesn’t it. The real estate agent, however, is going to make a double commission. They will get paid from both sides of the transaction.
Guess who is going to do everything in their power at all costs to make that sale happen. If you said the real estate agent then I say BINGO!
Here is who the real estate agent is really representing – THEMSELVES!
The Other Problem With Dual Agency
Real Estate agents are required by law to explain dual agency to buyers and sellers. There is usually a disclosure form that gives them consent to practice it.
The real estate agent is supposed to explain the pros and cons of dual agency.
What do you think happens when someone with a vested interest in having a buyer or seller agree to dual agency?
If you are guessing they explain it much differently than I just did then you are one hundred percent correct.
Real estate agents all over the country are fooling their clients on a daily basis when it comes to properly explaining dual agency.
They are explaining it away as no big deal. They might even tell you that if you agree to dual agency they will give you a discount in the commission.
Don’t be suckered by these con men and woman. Do you want to save $2500 only to make a $15,000 mistake?
Of course not but this is exactly what happens all the time.
The only party that benefits from it is the agent. Do yourself a favor – when buying or selling a home, reject dual agency.
In the article above at Maximum Real Estate Exposure, you will see a detailed overview of what dual agency is and how it works.
Do yourself a favor and read it. If you are buying or selling a home, you’ll be glad you did.
Other Real Estate Resources on Dual Agency
- How will dual agency work – Realty Times.
- Don’t be fooled by dual agency – Newswire.
- Dual agency should be banned in all states – Active Rain.
Use these additional resources to understand dual agency and why it should be rejected when buying or selling a home.