Learn what you must know about dual agency, why it fails to provide effective real estate representation and other reasons to avoid it.
The phrase "dual agent" may have you thinking double agent, an operative adept at playing both ends against the middle. And, while the motive of real estate dual agents are rarely sinister, the effect for the home buyer seeking effective representation can be the same.
Making the terrain even more perilous: Most real estate agents are dual agents. Many home buyers are shocked to learn that their trusted real estate broker actually is obligated to look out for the sellers' interests.
There's much to risk by settling for this kind of representation. By splitting loyalty between you and the seller, a dual agent:
Is legally obligated to tell the seller things you’d like to keep confidential!
Is legally obligated to help the seller get the highest fair price!
May be biased toward houses listed with his or her agency, whether or not they’re right for you! May skip homes that are for sale by owner, no matter how perfect they may be!
Beware Dual Agency
Most all real estate agencies attempt to represent both home buyers and home sellers. That makes them dual agents. And that means a home buyer who is not careful could very likely end up with an agent who is not representing his or her interests one hundred percent.
Know the Three Types of Agents
The type of agency you choose can make a big difference. To really understand why an exclusive buyer agent is the home buyer's best choice, it helps to know that there is a real difference between exclusive buyer agents, exclusive seller agents and dual agents. Choose the right type of real estate agency and you can get more choices of homes, better information, better guidance and a higher quality home,
all for a lower price.
MORE REASONS TO BEWARE DUAL AGENCY!
As hinted above, there’s an ironic twist at play. Obeying the law and following the code of ethics actually works to pit dual agents against home buyers. That’s not to say there’s anything wrong-headed with the law, unethical about the code or evil about human nature. The problem is the double-bind that comes from the very idea that an agent can serve the opposite interests of buyer and seller.
HOW TO SPOT A DUAL AGENT!
No one is saying dual agents are evil or subhuman. The problem is the opposite. Dual agents fall prey to the same temptations any of us. Even though real estate agents have a legal obligation to disclose which relationship option they're proposing, it's up to you to know for sure: Is the real estate who wants to represent you a dual agent?
There’s one clear way to prevent representation from a dual agent: Assume most real estate agents are.
You can take some comfort that Georgia and the other states where dual agency is legal do require the real estate agent to make the disclosure. But, as you probably know if you’re buying a home, there’s more than a little wiggle room when defining “appropriate.” That mean’s you have to ask. In fact, there is more to it than simply asking, “Are you a dual agent?”
The problem is that this question doesn’t get to the heart of the matter, leaving a little too much room for interpretation. An agent assigned solely to representing that firm’s home buyers could reasonably answer, “Of course not.” Meanwhile, his or her colleagues are at work adding houses for sale on the multiple listing service.
Here’s the question that gets right to it, leaving no wiggle room: “Do you, or anyone in your firm ever list homes for sale?”
Some agencies might reassure saying the two functions are kept completely separate, with different agents representing buyers and sellers. But remember, when a house sells, real estate agencies split a commission of the purchase price. When an agency represents both seller and buyer, it also splits the commission—and then gets to keep both halves!
So ask yourself, how big a firewall would you need to be sure your agent isn’t influenced by bringing thousands more dollars to his or her firm? If there’s any connection to homes listed for sale, that’s your cue to move on.
