It’s legal, but why we avoid this…
Posted by Daniel Keeton on Thursday, February 23, 2023 at 6:00 PM By Daniel Keeton / February 23, 2023 Comment
No, this is not another James Bond movie title.
But dual agency is the practice of representing two opposing parties.
In real estate, it’s when one agent represents both the buyer AND the seller in a transaction. Sounds crazy right?
Before we bash the practice, it’s important to note that I have many good willed agent friends who practice this in Virginia, and (maybe) find a way to balance it. It’s illegal in some states, but Virginia does allow it….
However, we at KeetonCo make it a policy to stay away from this practice like a skunk at a picnic.
Early in my career I was representing some buyers who had their eye on a FSBO (For sale by owner). I did my job as the buyers agent and negotiated a deal for them.
Everyone was happy… for a while…
At one point during the inspection negotiations, while I was fighting for my client’s interest, the seller’s in frustration asked me “Who’s side are you on anyway?”
I had to politely remind them that I was on my buyer’s side, and they signed a disclosure that acknowledged that. But even with that document, the seller’s still had a perception that I was working for them.
Dual agency in real estate is like asking a fox to watch over the henhouse. It's a bad idea that puts both parties at risk
Think about it - the real estate agent is supposed to represent both the buyer and the seller, and negotiate on their behalf. But how can they do that effectively when they have conflicting interests?
It's like trying to be friends with both of your ex and your current significant other at the same time - it's just not going to end well.
As a buyer, you want to get the best deal possible. You want your agent to negotiate hard on your behalf, to point out flaws in the property, and to get you the best possible price. But...
If that same agent is also representing the seller, they're going to be pulling in two different directions.
And if you're the seller, you want your agent to get you the highest price for your property with the least headache. But if that same agent is also representing the buyer, they might not be as aggressive in negotiating. They might not want to push too hard and risk losing the sale.
Dual agency creates a potential conflict of interest that can lead to a lot of confusion and hurt feelings.
In a dual agency scenario, an agent is simply supposed to be a "paper passer", not giving any advice.
Who wants to hire an agent to do that?
What do we do in our company when we have a listing and the buyer comes directly to us? …
We give that buyer one of two options...
1. Designated agency, where we assign another agent at our company to represent them or…
2. Sign an unrepresented party agreement, disclosing that we are not representing them and only representing the other party.
So, when it comes to buying or selling real estate, it's best to choose an agent who will represent you and only you. That way, you can be sure that your interests are being put first.
Don't let a fox guard your henhouse - choose an agent who will work hard for you and only you.
Thinking about selling, or buying, and want an agent dedicated to you alone? Give us a call or text.