Today let’s talk about dual and designated agency, which is applicable to both purchasing and selling. To give you simple definitions:
Dual agency – when one agent represents both the buyer and the seller.
Designated agency – when two agents from the same brokerage represent the buyer and seller separately.
Our team will not do dual agency simply because we believe a single individual cannot fully represent both sides of the transaction. When it comes down to it, we believe it’s a compromise of interest and in dual agent scenarios the clients are not getting the best representation possible.
In many states, the practice of dual agency is actually illegal. In fact, Maryland does not allow this, while Virginia and DC do. So why is this practice considered taboo?
Well let’s consider a hypothetical – Bob is purchasing a home from Tina, and Michelle is the Realtor representing both sides in the transaction. Bob, as the buyer, has his home inspection done and finds out that the expensive HVAC system is broken and very old. He then wants to negotiate with Tina on the home inspection item as part of this home inspection contingency. How can Michelle properly advocate for both sides when she represents both parties? Is it possible that she supports both sides equally, or would she likely end up leaning toward one side or the other? In my opinion, it’s the latter. This is why having two separate agents is, in my opinion, so important. With two agents, the parties can negotiate back and forth and **hopefully** come to a compromise with two professionals negotiating on their behalf.
When signing on with a Realtor, it’s important that you read the Buyer Broker Agreement and related disclosures to see your agent’s position on dual agency. If you can’t find it, never hesitate to ask!
You probably are thinking, what do you do, Alli, as a Realtor should your buyer clients want to purchase your listing? Though it would be a rare occurrence, this would be a situation where I would utilize designated agency. I would assign someone that I trust from my team to assist my buyers with their offer and subsequent inspections and activities so that they are fully represented throughout the transaction. My priority is my clients and their best interests even if it doesn’t benefit my pay check.
One other quick thought while we are on the topic, please never call the listing agent directly to go see a home. If you do, keep in mind they represent the seller and the seller’s interests, not yours. It’s important that you have your own buyer agent to take a look at the home and identify any possible issues, and to negotiate on your behalf.
Wishing everyone a happy Memorial Day Weekend! Thank you to those who defend our country and to those who have paid the ultimate sacrifice. Remembering and honoring these heroes.