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MLM, Home Buyer in 19130

Working with a dual agent - good idea or not?

Asked by MLM, 19130 Sun Mar 9, 2008

We saw a house this weekend that we love and want to put in an offer. We're not working with an agent, though, and the agent we were going to ask to be our buyer's agent is actually the seller's agent for this property. I know there is a clause for a dual agency but doesn't that defeat the purpose of having an agent in the first place? Should I quickly secure the services of a buyer's agent? Or should we just get an attorney and go at this by ourselves?

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Alan May’s answer
Dual agency is, in my opinion, not a good idea. In fact, I'll go so far as to say it's a bad idea. While legal, here in Illinois, it's really a lawsuit waiting to happen. As you point out, it's a conflict-of-interest. She is contractually obligated to represent the seller. Once she goes into dual-agency mode, she doesn't really represent either of you, the only person she represents is herself.

If you're interested in pursuing this house, ask her (or her managing broker) to designate a different agent in the office to represent YOU. In Illinois this is called "designated agency" and the fact that they're the same office, or same company has no bearing... they would be your representative and watch our for your interests.

Or, of course, if you have a different agent that you've met along the way, that you like. (maybe someone you've met at an open house, or someone a friend or relative recommended) you can bring that agent in to represent you on the purchase of this home.

While it is occasionally possible to get a "dual agent" to reduce a portion of their commission, saving you some money, the potential liability, in my opinion, is not worth the risk.
3 votes Thank Flag Link Sun Mar 9, 2008
Alan May, Real Estate Pro in Evanston, IL
MVP'08
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BEST ANSWER
Your question has a few questions rolled up together.

1. You need to find out what type of agency the agents office pratices. Dual agency or designated agency. Sit down and take a read as to what the benefits and detriments are for you with each method.

2. Alot of agents in offices that pratice designated agency might refer you to a buyers agent from another office who will represent your interests or discuss with you what your options are.

3. In a dual agency office it only becomes dual agency if the agent and you agree to work together in a buyer agency relationship. Then it would have to be disclosed to all parties, buyer,seller and broker. There are specific laws that regulate this relationship.

4. Your in essence paying for the representation of a buyers agent when you purchase because the co-broke compensation has already been contracted between the seller & the brokerage. You should look into a top buyers agent to represent your interests & discuss options & negotiating methods and techniques.

5. There are attorney's out there that will work with you in a buyers agent capacity. Most will sit with you for a free consultation and flesh out the bullet points of what their services and assistance can do.

6. The sellers agent is bound by state law and if the agent is a Realtor to a code of ethics. Before you divulge important financial information & motivations on your part, find answers to the above 5 before delving too deeply into negotiations with the agent. Until there is a buyers agency relationship the agent will be working in the best interest of his client (the seller).

My office pratices dual agency and it has to be handled very carefully and all parties have to understand and agree to the rules & regulations for this special type of relationship.

Hope that helps
0 votes Thank Flag Link Sun Mar 9, 2008
I made the mistake of doing the "dual-agent" sale once before and I'll never do it again. I never got the feeling that I had someone working "for me."

Today, you need a junk yard dog of a buyers agent - and the sellers' agent isn't going to be that for you.

There are a lot of hungry agents out there. Act accordingly.
2 votes Thank Flag Link Sun Mar 9, 2008
Dual agency can workout for the buyer as well as the seller, because the agent with the MOST interest in getting the job done is the one working to make it happen. You should feel comfortable with this agent and that they have fully explained to you what it means to be a dual agent. Thye should be as staight forward about the arrangement as they are able, need the sellers permission, and it works best on uncomplicated transaction ( ie newer properties, new construction)
Web Reference: http://homesinlitiz.com
1 vote Thank Flag Link Mon Mar 17, 2008
Represent yourself and negotiate with the seller's agent to get 3% of the commission back.
0 votes Thank Flag Link Tue Oct 20, 2009
Duel Agency is not a problem when they find you the home, however, it does become a problem when issues arise. We suggest hiring an attorney to review and negotiate the agreement of sale and the contingencies. Good Luck.

Michael Kuldiner, Esq.
Law Offices of Michael Kuldiner, P.C.
T (215) 942-2100 | F (215) 942-9664
Michael@phillyesq.com | http://www.PhillyEsquire.com

Bucks County Office (Main Office)
922 Bustleton Pike, 1st Fl.
Feasterville, PA 19053

Philadelphia Office
1420 Walnut St, Ste 800
Philadelphia, PA 19102
0 votes Thank Flag Link Sun Jun 7, 2009
Simply find another agent to represent you as the buyer. If you were on trial for murder would you want the prosecuter to double as your defense attorney? I am sure there are many reputable agents who would treat you fairly but I would want someone with only MY best interests at heart.

Jim Dixon
ERA Adams-Pevey Realty
Rincon, Ga.
0 votes Thank Flag Link Mon May 4, 2009
Dear MLM,

I have done numerous deals where I've been a dual agent. In my opinion, the transactions run much smoother, there's no "second" middle man and the seller gets a break on the commission which, in most cases, has been used as concessions for the buyers. I haven't had any complaints, but my advice to you is to make sure that agent representing the seller is honest and truly has your best interest in mind as well. It's a great selling feature to be able to tell the prospective buyers everything they know about the home....other agents wouldn't know as much as the listing agent, The listing agent, of course, can not divulge anything that would hinder the negotiation process, but as far as knowing of any flaws with the home or the history of the home...that agent would be the best to be working with. Good luck in your endeavor and let us all know which way you decided.

If you feel this agency has been violated, the best thing to do is start with the agents broker. From there the broker can advise you on what your next steps could be. Also, you could go to the local board of Realtors and submit a complaint.

Crissy Kremin
Community Best Real Estate
Office: 435-789-2828
homes@crissykremin.com
0 votes Thank Flag Link Mon May 4, 2009
What do you do if you feel the dual agency has been violated?
0 votes Thank Flag Link Mon May 4, 2009
MLM,
Dual Ageny is legal in Pennsylvania. Dual agency practiced competently may even make the transaction quicker or smoother, less co-ordinating. The consumer notice handles proper notification to both buyer and seller, its the law. The agent has to be competent to separate required legal disclosure from private information keeping in mind the agency relationships. In most cases the agent would be working with buyers and sellers at different times giving 100% to all offers or counteroffers.
If you do not feel the agent is competent or trustworthy, then by all means do not use dual agency, bring in a buyer's agent you trust and can rely on. If the agent is doubtful of dual agency, then I would recommend not using dual agency with that agent.
Web Reference: http://husevansrealty.com
0 votes Thank Flag Link Wed May 14, 2008
I bought my house owner to owner.. no agent in the middle and it has been the best deal ever. I know that is not your situation, but I said the least number of people between you and the buyer the better you'll end up. At the end, everybody is looking out for their own interest, andyways. You just have to have common sense, this is a buyer's market right now, so offer as little as possible, then go from there. Do not be afraid to loose your house, believe me, there is no body buying or what is worst not getting approved through their loans. I don't know how much the house is set for but I usually start at 85% of the price of the house, then you go from there. DO NOT BE SCARE TO OFFER A LOW NUMBER.. AND SET UP YOUR NUMBER TOO...AND don't change it no matter what.. REMEMBER, THERE ARE ABOUT 9 MONTHS OF house inventory..WATCH THE NEWS....TAKE ADVANTAGE
0 votes Thank Flag Link Wed Mar 26, 2008
NOT a good idea - As a buyer it is in your best interest to work with a buyers agent, they are working for you and ONLY you.
0 votes Thank Flag Link Wed Mar 26, 2008
If you love the house and want it, you need someone interested in helping you achieve the "best possible price." You will not get that kind of focus from either a seller agency or dual agency agreement. The result is that you will likely pay too much, and not have an experience in which you have complete comfort with the purchase. Just an opinion.
Web Reference: http://optionsrealty.com
0 votes Thank Flag Link Wed Mar 26, 2008
If you think the agent is a good person, and will be ethical, then by all means, use the seller's agent. They must disclose any conflicts, and can even appoint an agent in their office to represent you. Why should you pick some name out of a hat and give an agent free money just to show up now and write an offer, unless of course that agent is me! lol
0 votes Thank Flag Link Tue Mar 25, 2008
I do not think that would be a good idea. If you are getting a mortgage done for the property, it's best to check with the concerned company, your agent could be of help here! Going with the attorney is feasable!
Would be glad to be of help if needed . feel free to call me at 866-207-5340 ext 2534.
0 votes Thank Flag Link Fri Mar 21, 2008
Good morning. Dual Agency has been banned in many states exactly for the concerns you stated. Getting an attorney is one option, however he atorney will not likely accomany you on inspection, walk thrus or have the data and experience that can help you evaluate value. Look for another agent with expertise in the area and since you found this one on your own, you might negotiate some benefit for yourself.
0 votes Thank Flag Link Mon Mar 10, 2008
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