Is dual agency necessarily a bad thing?
Dual agency is the term given when the same agent represents both the buyer and the seller in a real estate transaction. Typically this is where confusion and controversy intertwine and many agents stay far from this situation but is it really all that bad? Let’s discuss the circumstances and instances where dual agency is not the bane of Realtors® existence.
The most natural setting where this occurs is when a listing agent shows a buyer their own listing and the buyer decides to purchase the property. Simple, clean and easy. Most of the time, the agent will mention that the seller sought the services of the agent first so first come first serve, sort of situation, even though the listing agent will do all that is necessary to ensure that the buyer is well taken care of in addition to the seller. This usually happens at an open house but not always.
State law has different rules for whether dual agency is even allowed. For the state of Georgia a broker may act as a dual agent the written consent of all clients. According to Georgia US law, the written consent must contain:
- A description of the transactions or type of transactions in which the broker will serve as a dual agent
- A statement that, in serving as a dual agent, the broker represents to clients whose interest are at times could be different or even adverse
- A statement that a dual agent will disclose all adverse material facts relevant to the transaction
- A statement of the broker or the brokers affiliated licenses will time disclosed to each client in a real estate transaction the nature of any material relationship the broker in the brokers affiliated licensees have with the other clients
- A statement that the client does not have to consent to the dual agency
- A statement that the consent of the client has been given voluntarily and that the engagement has been read and understood
In some instances dual agency can even be referred to as one brokerage with the same real estate transaction even though there are two distinct agents involved. This typically is not an issue as each party has their own representing agent even though the brokerage is the same.
It’s very easy to understand why dual agency is wrapped in so much controversy. How is it possible for one agent to represent both parties whose interests are in conflict? Many agents feel that this simply can be done or can be done with at least one party being at a disadvantage. However, as long as the steps are taken above, both parties understand the situation and they should also understand that there are severe penalties for agents who fail to disclose dual agency. The law specifically prohibits someone acting as a dual agent from telling the buyer how low the seller will go over from telling the seller how high the buyer will go. This keeps the fiduciary duties but also protects the agent. The agent is simply facilitating the transaction on behalf of both the buyer and the seller.
Another natural consequence were dual agency might be applied in the case of your buyer and seller and need for real estate license involvement. For instance, let’s say two neighbors want to buy and sell particular properties. Perhaps one neighbor was a renter and now wants to buy his or her neighbor’s property. They’ve already discussed the details of the transaction and just need an agent to facilitate the deal. The buyer and seller are both well aware of dual agency and just prefer to have one agent involved in the transaction. The agnet is simply acting as a mediator between the two and facilitating the transaction with legal paperwork and documents needed.
While Dual Agency slippery slope can be done in the right context. For the buyer that comes to me to purchase one of my listed properties and informed them that I am the listing agent and will be conducting the transaction on behalf of both the buyer and the seller. If you agree to this in writing, we can have a fairly amicable transaction however, the buyer is free to acquire representation if they feel is necessary.
I always recommend my buyers to have full representation on any real estate transaction they conduct. It’s important to have your own representation for your interests as many details of a real estate transaction can be confidential and used as an leverage.
For more information on dual agency or for answers to your questions about this or similar buyer representation please contact my office today.
The buyer’s agent is like the buyer’s lawyer. Financing and negotiating tactics are kept confidential and used appropriately in strategies to get what the buyer really needs. It’s best to be open and honest with your agent and let them know your finances and if you are pre-approved. They can tailor the purchase and sale contract to benefit the buyer and make certain that it’s a solid offer. Buyer’s agent can help with negotiations and understanding the sometimes fuzzy legal jargon that can be confusing to most people. (However, buyer’s agent and any licensed real estate agent cannot give legal advice)
If you’re thinking about buying new construction or pre-construction throughout the Savannah real estate area you might be considering the benefits of enlisting the help of a buyer’s agent. Of course, you certainly don’t need one; you can visit the model showroom and the development without a buyer’s agent and have the assistance and help of the listing agent or the buyer’s agent on duty. They can help you with colors, styles and facilitate the transaction all the way through to closing. Buyer’s agents can be the mediator between the sellers or the developers and your negotiating strategies, answering questions along the way in helping you close on time.