I thought it was legal for a listing agent to represent the buyer?
Boy o boy do I hear this question a lot, I can’t tell you how many times this comes up and in this case it came up with a local real estate agent I was talking to the other day.
Well, here is my response.
Yes it is perfectly legal for a listing agent to represent the buyer in the state of California but when you do this, you create a dual agency relationship and so your Agency Disclosure has to be properly noted. You or your TC needs to insure that you have all your disclosures in order.
The other issue, and the more important one; California DRE permits an agent to act as a Dual Agent but that does not mean that they allow an agent to be less than Fair and Ethical in his dealings with Buyer, Seller and the other agents involved. In a case of Dual Agency most companies have very strict policies that outline the procedures for handling a dual agency transaction and some of the big names just won’t do it because of the liability.
Personally I agree with national trends which are that in most states the State DRE does not permit Dual Agency and some states that do permit it do so only if the agents follow set State guidelines regarding such representation. It is hard to believe that if one agent is representing both the Seller and Buyer that the agent will be representing each side to the highest standard possible. This is the same principal that applies to Lawyers; no way that the State Bar would permit an attorney to represent both sides of a case, how can he provide each side unbiased representation.
In summary; if we get into situations with Dual Agency we need to represent at the highest level so that we can never be questioned of our ethical or legal representation of both clients.
Alex Aguilar
Team Aguilar
Real Estate Agent, Blogger!
Alex@TeamAguilar.com
www.TeamAguilar.com
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March 6th, 2010 at 8:41 am
I have been updating with this Real Estate blog for sometime and its a great blog and very informative.
March 6th, 2010 at 1:44 pm
These ethical debates always turn a bit hairy, but I agree with you completely here. There’s nothing wrong at all with acting in a dual-agency capacity, but you better do so fairly. It can be really easy to favor one side of the transaction over another . . . the key is to ALWAYS be aware that you must look out for both parties. Sometimes that is easier said than done.
March 7th, 2010 at 11:40 am
Very informative; articles well written i will return. From Canada.
March 8th, 2010 at 1:13 pm
yes we have dual agency in Canada (ontario) as well. thank you for your explanation. the key word is ethical and treatment of both parties with the utmost fairness. I Enjoy reading about our US friends and their rel estate views.
March 8th, 2010 at 3:26 pm
In Texas we don’t have dual agency, but we have Intermediary Agency and I won’t touch that. If I have a listing, my first responsibility is to my seller. If I act as an Intermediary I can’t possibly have the best interests of my sellers come first. I would rather refer a buyer to another agent so both sides have representation.
March 8th, 2010 at 8:40 pm
@ Josh Thanks for stopping by the blog and having a read. I spend quite a bit of time reading articles on REI. You have a great informative website.
@ Ed – Thanks for stopping by as well. I have a couple friends in Canada and it seems like you have similar issues. Dual agency is dual agency no matter how you slice it. You have to work hard and make sure you are doing the right thing. It’s frustrating when you know certain agents are not fair and don’t bother doing the right thing.
@ Sam – I agree with everything you are saying. I am not very familiar with Intermediary Agency but it sounds like it may be similar and I am sure you have run into similar issues.
March 10th, 2010 at 1:59 pm
I agree, nothing wrong with dual agency as long as you disclose, disclose, disclose. If the buyers know what they are dealing with, then I don’t see a problem, however I always refer buyers on my listings to another agent. I don’t like to do both sides, just not my thing.
March 10th, 2010 at 8:42 pm
We work in a big office with over 600 agents, so we just do designated agent, still under the same brokerage, but a different agent represents the buyer and seller. It works for us and we avoid dual agency.
Shane @ Atlanta Short Sale Listings´s last blog ..Get Paid to do a Short Sale? Really? How You Can Get $1,500.
March 25th, 2010 at 1:48 pm
This is exactly the problem we face in the Central American market. Agents routinely represent both the buyer and the seller and no disclosure requirements exist (or are followed). The problem is compounded by lack of realtor licensing. Most buyers and sellers are completely unaware of how open they are to biased advice.
Claudia@International Real Estate´s last blog ..5 ways to make your overseas property listing convert like crazy
April 27th, 2010 at 9:26 pm
Guys! I agreed with Claudia point of view, quite sometimes many of them(Seller/Buyer) they are doing in dual purpose, maybe for interest of their Company or in their personal interest.
May 31st, 2010 at 9:30 pm
Great post topic. You better disclose and cover your behind with disclosures. Ethically, I would never do this. I have seen many partnerships turn south fast.
Chris@Housing Crisis´s last blog ..Handbook For Real Estate Buyers