A stone with two faces carved into it

The Two Faces of Dual Agency

In the world of commercial real estate, it is common for a listing agent to sell a property to a buyer who is happy to represent himself, thus the agent would be entitled to the entire brokerage fee. This frequently happens because commercial buyers are typically savvy about the process, and comfortable with its “buyer beware” environment. But, in the residential world, this is rarely the case, although a surprising percentage of buyers brush aside the opportunity to have a buyer agent represent them, be their advocate, their “bad cop”, and their research resource. Perhaps savvy commercial buyers also are savvy residential buyers, or so it would seem. 

Yet, there are pitfalls in the residential environment that even a savvy buyer may stumble over.

Obtaining sales comparables is one that informs a buyer whether she is considering too high an offer price. Only a real estate agent can provide that information accurately. Writing up the contract to make an offer must be done by someone who knows how to do it, how to word special contingencies, and knows what deadlines are required by law. A buyer foregoing this service, especially since it is free to the buyer, seems cavalier at best, and possibly disastrous at worst.

In such a situation, the buyer can elect to be represented by the listing agent. This is the way it used to be done until 2005 when the practice of buyer agency in Maine began. A buyer being represented by the listing agent is entering into what is known as “dual agency”, a practice that for some agents is the third rail to be avoided at all costs, and to others is an opportunity to practice specialized skills which provide equal protection for seller and buyer.

I have heard from other brokers that no dual agent can provide the same service and protection to the buyer as a dedicated buyer agent. I beg to differ. There are four duties for which both a dedicated listing agent and dedicated buyer agent are responsible: 1) Confidentiality in personal information; 2) Not to disclose neither what amount a buyer will pay, nor what a seller will accept; 3) Not disclose motivation or negotiation strategy;  and 4) unique to a dual agent, not to advocate for one party over the other.

These are the same duties, with the exception of #4 to which all agents of buyer and sellers must adhere. In a dual agent situation, the distrust that an agent may not faithfully respect these rules would be the only reason not to give permission for dual agency. In such a case, it would set the clock back to pre-2005, when listing agents had all the advantage, with no allegiance to the buyer, putting buyers at a distinct disadvantage.

So, dual requires an agent with integrity, one who understands that buyer and seller should be treated equally, and who takes the care necessary to perform his or her duties with an even hand. This is no place for loose lips! Should you encounter an agent who appears to have this characteristic, it may be an indication that the person is not good at keeping a closed mouth. Time to say “no” to dual agency. Having another agent in the same agency representing you is a safe bet.

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