Question Details

Kelly, Home Buyer in Chicago, IL

Question about buyer/seller agent; can a company represent both at once?

Asked by Kelly, Chicago, IL Thu Dec 13, 2007

Hi, I have a question about buying a condo in downtown Chicago, where I originally was not working with a buyer's agent. I have been going to open houses, and one of the realtors started sending me info on other condos. She calls herself a "buyer specialist" in the signature of her e-mail, but I am aware that she is working for the firm that represents the seller. I am interested in making an offer on one of the properties she sent to me to look at. Can I trust her to give me honest advice? She acknowledged that the asking price is a bit high (which is what I thought too), and has been forthcoming with information. However, I am a first-time buyer, so I don't know if this is commonplace (for a buyer agent and seller agent to work for the same firm). Isn't that a conflict?

I am getting ready to start preparing an offer with her next week. What should I keep an eye out for? If she gets a fee, shouldn't it just be out of the commission from the sale? Nothing additional? THANKS

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Answers

9
Hello all,

I liked the answer from Ian at first...., until he gave out his contact information and offered to recommend a good Realtor he knows in that area. Aaaaaaaaaaak!

People. (Agents...) We need to disclose that if we recommend another Agent in another area..., it is common practice to get a split of the fee when a property sells...for that referral. Also, check the Trulia Guidelines about advertising in this forum.

Elvis in the end has my vote. My office alone has 150 agents working out of just that one location, plus we own 2 other offices in nearby towns. If an Agent is in our office with a listing.... condo/loft or home etc, they are allowed contract with any other Agent to "sit" their open house or even do a Brokers Open for them. Even if that Agent is in their office or totally with another Agency. That Agent may not even know the owners, nor have they any obligation of a Listing Agent. That is because we are all Independent Licensed Agents. There are only a few Brokers that actually hire their agents as employees. Independent Licensed agents normally work totally on commission, no basic or minimum wage at all.

Disclose, disclose, disclose.... that is the motto. - Many listing agents just will NOT represent the buyer and seller at the same time due in fact to what is commonly known as implied representation, meaning that no matter what everyone agreed to....each party has the right to fair and impartial representation. Its just a law suit waiting to happen. Some agents will write up an offer and then on the offer "disclose" that they are a neutral 3rd party and do not represent either buyer nor seller, they act as a mediator or "facilitator" to the agreement. Be aware folks...., this can be seen differently by the courts. Consumers have a lot of rights, as they should, and we are held to a higher level of responsibility!

Yes.., in the end a company can represent both at once. It is legal in most states, if its disclosed properly. I have done it more than once, when I felt the situation warranted it. It was my risk to take. Normally I do not do this... as in my own home that is up for sale at $879k, …however I negotiated with another agent to list my own home to avoid any possible complications or later issues.

Don / Associate Broker
2 votes Thank Flag Link Thu Dec 13, 2007
Just to add to all the other advice here: Very often, if an agent with Firm X sells a property listed with Firm X, the commission is higher than if the agents were with two different firms. Nothing wrong with that, but it does/can encourage agents to show properties listed with their own firm before showing others. (An agent does have a whole slew of obligations to you, but the commission structure is deliberately set up to try to keep business in-house, if possible.) In some areas, to answer your question, yes, it can be common for a buyer agent and seller agent to work for the same firm. If they're the big fish in the pond, in a particular town, it can happen frequently.

Determine if you feel comfortable with the agent. If so, fine. If not, look for someone else, either in the same firm or elsewhere.

Good luck.
1 vote Thank Flag Link Fri Dec 14, 2007
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
An agent can represent both sides but it needs to be fully disclosed. It is called Dual Agency. It can be a tough thing to do well as an agent (for obvious reasons) and there is much rhetoric on the topic. If you feel that a conflict of interest is too great, then you should seek out your own agent to only represent you. However, laws do vary from state to state. If you call the local real estate board they can give you more helpful info. I happen to know an excellent agent in Chicago. If you want some more local guidance, just let me know and I'll give you his info. My email is ian@exitrealtygold.com. Another great tip: If you do a web search for "dual agency chicago" You should find all the answers you are looking for and more. Good luck to you.
1 vote Thank Flag Link Thu Dec 13, 2007
Dear Elvis
First of all the question is imposed as "All Locations" therefore you do not even know where she is buying the property.
Second I did say that dual agency requires disclosures and signed agreements, I do not understand your point? since you are saying the same thing as I did.
Third I did also say that dual agency definitely always creates conflicts for everyone involved, so what is your point by pharaphrasing my answer and just translating what I just said? Perhaps you do need to read and understand what is being said before commenting.
Thanks
0 votes Thank Flag Link Fri Dec 14, 2007
It is completely legal that an agent can enter into dual agency agreement with a client. This requires disclosures and signed agreements. You need to be in clear if the agent is working as a sellers agent or buyers agent or both. Why?
Seller’s agent represents the property and therefore sellers best interest and owes the seller fiduciary duties and responsibilities.
Buyers agent represents the buyer obviously with all the fiduciary duties and responsibilities.
The dual agent is basically just a paper pusher and has to represent both parties equally. That definitely always creates conflicts for everyone involved since the agent can not disclose as much yet keep everyone’s best interest in mind.

The company might find themselves in that situation of dual representation but it should not influence your agreement with the realtor.

If you are buying than obviously the buyer’s agent will help you the most.
Compensation is usually set and paid by the seller’s agent, or built in into the offer.
0 votes Thank Flag Link Thu Dec 13, 2007
Thanks to everyone for the helpful responses! I might have some more questions before I get this thing going, so I appreciate everyone's advice (in advance).
0 votes Thank Flag Link Thu Dec 13, 2007
Kelly,
Just want to answer the second part of your question . . . . I often host open houses for agents in my office and have never met the seller. Likewise, when I have several listings at the same time, I can't possibly host them all on the same Sunday. So, I'll ask another agent in my office to host.
0 votes Thank Flag Link Thu Dec 13, 2007
Yes. But you need to make sure both Buyer and Seller are aware. In San Francisco, Buyers and Sellers both sign Agency Disclosures which speaks to this question. One agent can represent both as well. I, however, prefer to ask someone from my company to represent the Buyer while I represent the Seller. Should my Buyer be the one whose offer is accepted, then I handle both ends of the escrow. Since we have many multiple offer situations in San Francisco, it is not always true that the Listing Agent's buyer "always" wins. Please feel free to email me for more information.
0 votes Thank Flag Link Thu Dec 13, 2007
Oh, and I just read that Illinois allows dual agency like this - but it sounded like she didn't even KNOW the sellers when we were in one of the open houses. She made some remark about how she would like to meet the people who owned the place, because it seemed like they were "cool," based on the decor of the place & the neighborhood. Is it normal for an agent to not have even met the owners?
0 votes Thank Flag Link Thu Dec 13, 2007
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