Joe, sorry for any confusion- I learned the real estate business in Denver, Co. and relocated to NY five years ago. Just working through the differences- and expressing my horror. Dual agency? Worked through that dilemma YEARS ago, only to re-encounter it when I thought that it was clearly unethical, and gone.

Actually, no, Christian- at some "get it' point, I completely understood the need, in a HUGE purchase, to accept that there are two sides in a transaction, and each side should be represented with the highest standards available. Don't worry- the consumer will teach you.

We should all be like the majority of the Florida brokers who are transaction brokers.
Laurie, I am a little confused because your profile says you are from New York. Run for office and get things changed!

Get over it Laurie!!!! Why do you hate it so much? Every agent has had the opportunity.....why not you? I'm not trying to be personal here but, you have a scathing hate for it!! Let me guess what happened.... Before you were a Realtor. Your agent didn't explain it to you correctly and he made more than you that month. Sounds like you don't like it when people are offered the chance to double their money! Its called capitalism! If you don't like it move to France!! Wait not France they hate us enough there!! How about Canada!

I should add that as a real estate company in NY, we don't accept dual agency. If a buyer is interested in a listing, they are immediately advised (and acknowledge on the disclosure) that we work for the seller, as intially provided to the seller, period. We'd rather see a buyer get an agent that compromise an agreement that we've made with our sellers.

I don't usually question TDs, but I find it interesting that i received two TDs for my real story. Wonder why? Agreeing with Dual Agency or not, I do want to bring up another side where there is clearly disclosure what the seller is looking for and what happened. I'd be interested to find that out.

Sylvia

I find it STUNNING, really, that in a state such as NY, attorneys (who run real estate- make no mistake about it) are aware of dual agency, and as the forced go-tos (NYDOS complicit, permitting the insipid "no legal advice" pertaining to real estate contracts) don't eliminate dual agency as an impossibility, as many states have. Just goes to show you, New York is a different "cat", and Realtors here are content with their second class forced citizenship in the real estate arena. Can you tell I'm from out of state (Denver)? :) If more buyers and sellers understood dual agency, it would be gone.

I agree with both Elvis and Brecht. Maybe I should have restructured my response to Christian to be that implied agency or undisclosed agency is not good business practice. Exactly what both of you are saying can happen especially if what you are describing happens to you with a tester!
Now, lets sell some real estate!

Implied agency is a reality once you find yourself in court. I was at a national conference last week with my auction company Tranzon and we have the benefit of having 2 attorney/broker/auctioneer partners, one in NY and one in ME each licensed in multiple states. Each cited specific examples that validate exactly what is being discussed - remember anyone can be sued for anything at any time. Even with disclosures and written terms and conditions like we use in the auction business which go to extraordinary lengths - your actions can imply your relationship and judges agree.
Elvis lives!

Joe...

I respectfully beg to differ... there IS such a thing as "implied agency"... I don't know if New York has rules that state that "no agency can exist unless written"... but read the following from "about.com". But even if it didn't exist, I'd think that ethically it should.

Implied Agency: It is also possible to create an agency relationship by the actions of the parties. If a real estate agent takes on responsibilities that are normally those of an agent, but hasn't signed an agency agreement, she may still be considered an agent via implied agency. By the same token, if the customer asks the agent for advice or actions that are normally those in agency, then an implied agency could be created.

Some states have created specific legislation that states that no agency can exist without a written agency agreement. This helps to avoid accidental implied agency.

I agree with Tammy. No matter what the laws dictate, professional discretion is what works best in most of these situations.

I also agree with Christian that if all parties are happy, we are in the end doing the right thing. There are some great points from Sylvia about walking the tightrope transaction that is good for all.

I raised the question mainly because I see so many buyers on Trulia with issues where agents are trying to work the buyer side when initially they were the seller's agent. I am not sure if the TRULIA consumers were brought in on this discussion they would believe that we represent both sides equally or fairly based on their experience.

Great comments from all. Thanks for the thoughts.
CJ

I moved the Question out of the Dual Agency topic and bumped it to it's own topic heading. Just to respond to Christian and Elvis, in New York State, there is no such thing as implied agency and you DO have a responsibility to every seller and prospective seller you meet with to discuss the sale of their property. Discussing money, offering advise and discussing any material facts that affect the value or desirability of their property as provided by law requires that you present the seller/s with the NYS Disclosure Form and ask that they sign it acknowledging that you will be acting and advising on their behalf. This is supposed to be done prior to the actual discussion. I realize your viewpoints and quite frankly, it is virtually impossible to adhere strictly to the laws 100%. The big thing in violations is what are your intentions?
OK, this is getting good! Keep on responding and offering your own opinions.

Replying to Joe's follow up question:

If I met with a seller who divulged personal info with me (i.e. they must sell due to a divorce) while on a listing presentation, and they chose to list with another company, I would still keep that info in confidence.

Let's say I bring a buyer to that house, the property itself has not changed, it's still worth whatever it's worth. For me to tell a buyer that "hey, you can get a great deal because the sellers are divorcing" is unethical. It also does not change the old roof or the updated kitchen, etc...

And as stated below, what happens if that listing expires and the seller hires me? If I shared that personal info with other agents, and THEY then brought a buyer, it can come back to haunt me in negotiation.

What would my buyer think of me? A person tells me something in confidence and here I am blabbing it away. How is my buyer going to trust me? Will my buyer then trust me when it comes time to sell his house (hopefully not in a divorce situation)!

I think agents get into trouble when they take their focus off the house. (Real estate is what we sell, save the gossip for TMZ.com!). We can't assume to really know anyone's motivation to buy or sell. Anyone who has been in this business for a while can probably testify to being fooled at least once by a seller or buyer.

If you are in this business for the long term, the trick is to be your clients' agent for life! Referrals are so valuable. Don't blow it over one sale.

I don't agree, Christian, I feel that during the listing presentation, there is an "assumed agency situation and privilege" that should be taken just as seriously as a "dual agency" situation. It may be a temporary agency situation, but the agency isn't vacated, simply because you didn't get the listing, and you're not free to disclose what you've learned in that interview, in my opinion.

Without that honesty and candor from the seller, it's difficult to come up with a true market evaluation, and we don't want sellers to feel it necessary to "hide" information from us as we interview for listings. I think the same would apply to expired or cancelled listings, too Jim. Our agreement to "client privilege" doesn't end if we're cancelled or expired

Great tangent ! How about an expired listing ? Someone calls on your old ad, but it is now listed with your competitor. You used to have an agency relationship. Confidential yada yada. what are you gonna do?

What if the new guy got the listing because you demanded a price reduction which they almost agreed to but he was willing to list it at the old high list price?

In my opinion You do not have any responsibility to that seller. The agency relationship was never entered in to. You know at some point seller's would have to realize that if they interview enough agents it might be to their detriment. I make it a point to not know too much info about anyone. Bed's bath's and sq. ft. That's all I need to know. Getting too personal could get you in a pinch.

I think this topic is getting worn out now. There are different opinions and different practices from state to state. Buyers don't seem to care much, nor do sellers as long as they are happy, treated fairly and get the deal. When it seems to become a problem is when a unscrupulous agent is working in their OWN best interest and someone files a complaint because of it (as they should).

Let me pose this one to all of you agents:
What are you to do when you go on a listing appointment, discuss confidential and financial information with the sellers, they sign disclosure understanding that you are talking to them as a disclosed sellers agent. Then, you don't get the listing. 2 weeks later, you are showing homes to a buyer and acting as a buyer's agent with signed disclosure as such. They call you and want to see the house that you did not get the listing for.
How are you supposed to handle Agency Disclosure and how are you legally supposed to act in an agency relationship? How will the seller react when you make an appointment as a buyer's agent for your customer? How does your State Real Estate board view this?
I'd love to hear your viewpoints.
Joe

I vote with Christian H from norleans. Disclosed Dual agency, when properly understood and practiced by all parties is, where legal, also ethical.

I really can not believe what I am reading!! Why are agents not trying to figure out ways to make this situation better with dual agency?..... Why even put a sign in the ground with your number on it? The sign should read " Don't call me... Call another agent to call me" That is where this is leading if you would get your way.... OUR CLIENTS HIRE US TO SELL THEIR HOMES!!!! THEY KNOW THAT PEOPLE WILL CALL US!!! THEY ALSO DO NOT CARE IF WE BRING THEM A CONTRACT!....IN FACT WE ARE DOING WHAT THEY TOLD US TO DO!!! WHY SHOULD I SIT AROUND AND WAIT FOR THE MLS TO SELL MY CLIENTS HOME? I CAN FIND A BUYER FASTER THAN THE MLS!!! I FIND BUYERS FOR MY SELLERS!!! THAT IS WHAT THEY WANT!!!

Dual agency was outlawed in many states (New York is WAY behind the times). Fortunately, as buyer agency continues to grow and make those offering SA and dual agency antiquated and unfair (as it has been deemed in most places), it should disappear. Kind of ironic that it still exists in a state that has a real estate market run by attorneys- what does THAT indicate? :)

Disclaimer - The following and some comments I made earlier are just discussion points because I have already mentioned my position in my earliest post on this thread -

We have a local independent brokerage who used to take out 1/4 page ad on the front page of Real Estate section in the local paper. One of those, in a nutshell, says that he will match sellers with buyers so the sellers do not have to prepare the house for sale.

Sure enough, next thing you see on MLS is a new sold listing with him representing both buyers and sellers and comment (enter for Comp purposes only). I have to presume this is what the seller and buyer wanted.

Sylvia

In New York the COMPANY is the agent. On first subtantive discussion, I explain to people that I can represent them as a buyers agent EXCEPT when it is my company's listing and in that case the COMPANY is representing both parties and I can go on to represent that customer as a designated agent. I also explain to them that in the event that I am the listing agent, I have already made a promise to my seller client to represent them, thus that buyer customer may choose to work with another agent (this must be offered by law) or that person can continue to work with me - HOWEVER I must share anything the buyer tells me with the seller, therefore don't tell me anything you don't want to share.

Now, this is all discussed up front which is the law in New York. If a buyer is calling on one of my listings, I show that property first and offer to show others of course. If they like my listing, I remind them that they may use another agent to represent them in this transaction. But usually people will continue to work with me because I am being honest and up front with them. I never divulge my clients personal info unless they tell me to, and if I need to convey buyer customer (not client) info to my seller client, I remind the buyer that since I work for the seller, I must share.

Since the commission is a written agreement between the seller and my company well in advance of the transaction, no reduction of commission is required. It is whatever it is.

If all of this is confusing to US, you know our clients and customers must also get confused. I will remind them from time to time who I represent whether they are a client or customer.

Honesty applies to both clients and customers. If you are treating everyone with honesty and full disclosure (in writing), they will likely not complain about representation.

I don't really have an issue when "dual agency" is formed, simply by having two agents within the same agency... in that case, I feel that they are both equally and aggressively represented by the agents they've chosen, and those agent will make certain they're well taken care of.

Illinois does not have "same agency" dual agency.. we're only dual agents when one agent represents both sides of the transaction.

It's not a matter of not double ending it's a matter of understanding with the buyer as to representation. I double end all day long but when I do I'm always a Seller's agent. The thing that really complicates this discussion is that laws vary from state to state. You will always be less prone to suit when you represent a single party - truly the idea that you can "represent" both sides of a transaction is false. You can service both sides but can you really REPRESENT both sides - I don't think so.

Thanks, Christian, I think this picture is better, but which one is you?

No, you did not understand me.

I always wonder if two parties are very happy with a certain price, then who are we, as agents, to say that this is not the best thing for the two parties.

Remember, we are discussing Dual Agency here, so you are dual agency in this case - unless you have a perfect world with a perfect price right to the penny; then you either have a buyer that pays more than the perfect price or a seller who accepts less than the perfect price.

However, if both parties are happy with the not so perfect price, then who are we to say that this is not a perfect price for them? Dual agency or not?

Glad you asked?

Sylvia

Scary mask? Sylvia, you became a Realtor to make money? My clients are fully informed! Who says they have to accept less just because of dual agency or do I not understand you correctly?

I do have to agree with Christian on his point (although he is hiding behind a scary mask if you ask me, so that can be a bit of suspicious :-) ).

I sometimes wonder if a seller is very happy with getting $500K (Hypothetically, of course) for his house. So he does not quite care even if he might be able to get $520K for the house if it is on open market.

The listing agent brings him a buyer for $500K (who is very happy to get the discount). The seller loves the fact that he does not have to prepare the house for sale and put up with inconveniences of showing the house, and is thrilled with getting a $200K instead of $220K profit, then what;'s wrong with putting the two parties together and make a winning sale?

Who are we to say that this is not the best deal for both? - After you disclose everything, including explain to the seller that you might be able to bring a better offer (or not) should the house go on the open market, of course.

Just curious, what's everybody's thought on that? Too bad this is in Agent2Agent. I'd love to have some consumer's feedback.

Sylvia

I cannot believe what I'm reading!!! I let all my clients know that it is a strong possibility that I will bring them a buyer for their home! I have yet to run into anyone who would not be for that! I aggressively follow up on every web-based or other lead I get! Disclosure! Disclosure! Disclosure! Remember to go over them thoroughly!!! I talk disclosure first at my listing appointments when it's time for paperwork. Make sure you do not know too many details about your clients motivation or financial info. I agree that it is not for everyone so refer them all to me!! Ha ha!

In New York State they have modified the Dual Agency category in the written disclosure because there seem to be more multi-office single brokers who are growing through mergers and acquisitions. We now have an option of dual agency with designated sales associates. The brokerage is in dual agency, agent #1 is appointed to represent the seller, agent #2 is designated to represent the purchaser. It seems to work pretty well as long as both the buyer and the seller are explained their rights and options to choose full representation and offer their informed consent.

I guess to further the discussion...

If the referral is within the same brokerage, how representative is everyone being? To me there is still the potential for a conflict of interest because the agents have even more pressure to make the deal go through (because of referral - etc) when someone within their office sent the client. I know some agents get a better commission if the brokerage double ends the transaction.

If we are really concerned about the client's representation, seems to me we should remover ourselves completely from the equation and therefore advise the client to find a representative for their best interest.

If an agent is getting a referral fee, I am not sure it isn't just one step below representing both. If they are truly advising the client on representation, it is quite another situation.

Thanks for the answers.

As Brecht said it is possible to double end the transactionw without being a dual agent. I just finished my renewal classes and this was discussed at length. I have been the only agent involved in a transaction, however, the seller found the buyer and just needed someone to execute the contract.

Personally, I will advoid it in the furture- refer to another agent and take a referral fee. However, the TRUE definition of DUAL agent would be you and ANYONE else in your brokerage. So that even if I did refer it to someone in my office, DUAL agentcy would stll be in play.

As the second part of your question, IF I have found the buyer to one of my listings, MOST if not all sellers will expect me to cut my commission - however I would only do so IF it was going to benefit both parties-- as in both parites got a $1000 credit.

In California, a client is actually represented by the brokerage, not an individual agent who is associated with the brokerage (we are independent contractors).

So, a dual agency is created when both sides are represented by the same brokerage, which is quite common in my company - we have 500+ agents and 25+% of the market so it's difficult to not bump into another agent from the same company, one represents the buyer, the other represents the seller.

There is a CAR Dual Agency Disclosure advising the clients on their rights and what not.

The real problem with dual agency is when a single agent represents both the seller and the buyer, then there is a risk of which side gets the benefit and best representation.

I have never personally done this because I disagree with the concept. However, I have seen it handled different ways - 1) refer the one transaction another agent (the listing agent gets the referral fee if the offer is accepted and went into escrow) but still retain the clients or 2) have the manager sit in and negotiate the contract for the buyer but the contract was still submitted by the listing agent

I had one client who told me in no uncertain terms that he does not want me to do dual agency when we first met and signed the contract (not that I wanted to anyway). However, after he got to know me, he told me that he'd love to have me being the one who brought in a buyer because he thought I'd be honest and that I really deserved the whole commission.

I thought that's quite a compliment. :-)

Sylvia .

I will NOT be a dual agent on any house that I have listed. If a buyer comes to me direct, I disclose to them that I am a seller's agent and that they have the right to full representation of their own. If they choose at that point to continue and want to make a purchase offer through me, I explain that I would be happy to draw up the contract and present their offer. We use attorneys here so, I refer them to their attorney if they have any questions. I am seeing more and more (maybe because of the direct access of the property info through the internet) people are NOT associating themselves with a particular agent. Commissions do not come into the discussion because the price is the same regardless. When there are two parties involved, two attorneys, two files, two hands to hold, it is the double the amount of work so there is no less service being provided.
This same direct-buy mentality applys to other types of purchases; cars, cd's, clothes (ala-Amazon or BJ's). You think you are saving a lot of money by eliminating the sales clerk and the middle man but when you go into a store and realize that many times you could have got that item for the same price or less, you realize the genius of the retailer.

Dual agency is legal in Illinois, but as Brecht said, it's a lawsuit waiting to happen.

How can we, in good conscience, tell our seller that we will bring them the highest offer we can, and then suddenly when we have the buyer as well, tell the buyer that we'll get them the lowest possible. It's impossible to serve both mistresses.

In addition, now since we have to be totally neutral, we can no longer advise either side regarding negotiations, we can no longer advise regarding inspection issues, or any other issues that arise along the path to closing. How many times have we all had a buyer-client panic, and ask whether or not they should walk away from the deal. We need to be able to advise them without bias.

Buyers and Sellers both hire us, in part, due to our expertise, experience and negotiating ability. To suddenly take that expertise away from them, and tell them that we're now required to be neutral (even as a transactional agent, in those states that don't have dual), and for that privilege of no longer having our expert opinion, we're coincidentally going to be getting BOTH sides of the commission...

to quote my father-in-law, who was born in the wonderful city of Savannah, Georgia... "it just ain't right".

Dual agency is acceptable in Delaware and Pennsylvania. I have participated in dual agency once (I was the listing agent and found the buyer) I did everything I could to be impartial and walk right down the middle of the transaction. If was very difficult and in the end I felt that the buyer did not feel represented. I feel that if I had this situation arise again I would be sure to bring another agent in to represent the buyer.
I have represented a buyer that bought a home that was listed by my broker (In De. that is not considered dual agency)and that was no problem at all. Agents are independent enough for it to not be a problem as long as they realize that as soon as they get near that situation with a buyer they need to keep all information about the transaction closed to other agents.

We have the ability in Massachusetts but it seems to me it's litigation-in-waiting regardless of whether or not you have your disclosures signed.