Question Details

Aisa, Home Buyer in New Jersey

Ethics when agent is both buyer and seller's agent

Asked by Aisa, New Jersey Mon Jan 7, 2008

Hi. There is a property I like in which case, both the seller and my(the buyer) agent is the same. I want to put a bid on the property. There are bids from other people with different buyer agents. It is quite obvious that I can put a lower bid than the others, our agent can ask for a lower commission (as she is going to get a double commission) and everybody turns out ahead (i.e. seller gets a more net, agent gets more commission and I get a lower price). The question is: Is it allowed /ethical for the agent to let us know of a good price based on the other bids that come in? She has indicated that it would not be right to let us know the other bids (she might be right / she might want us to pay more as she knows our limits / she might be hoping for a full double commission). I just want to know how much can I ask of our agent in this case. Thanks.

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This is a particularly difficult situation to navigate, when you find your buyer's agent is also the agent on the house you want to place an offer (dual-agency). She is absolutely correct, that she cannot share any information about the other offers, and if you think about it, I think you'll agree, since you wouldn't want her to share any information about YOUR offer, to the other agents either!!

When you find yourself in this dual-agency situation, as C.J. suggests, you'll find that your agent has to become almost neutral, and you find yourself floundering a bit, because there are many areas where she would normally be advising you, and because of the conflict, she has to remain almost mute.

I hope that she has had you sign a "dual-agency" representation form, and has explained to you the hazards of entering into dual-agency. If you find yourself truly uncomfortable, your agent should be able to refer you to another agent in her office, to represent you fully. Your agent could still get a nice referral fee from that agent, but at least you would be fully represented.

Good Luck with your purchase.
1 vote Thank Flag Link Mon Jan 7, 2008
Alan May, Real Estate Pro in Evanston, IL
MVP'08
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Aisa,

This is one of the challenges of representing both sides. Owing fiduciary duties to both clients would imply the agent would need to be as neutral as possible as to not tilt favor in the direction of one client or another. If it were me, I would agree that I could not share what the other offers were. That is not something the buyer's agent (assuming there were two agents involved) would know. It can become a catch 22 situation. Good luck.

CJ
1 vote Thank Flag Link Mon Jan 7, 2008
Clarification - I do not want to shortchange the seller in any way. Just to clear any misunderstandings, I wanted to know if the agent, based on the other offers, can suggest us an amount beneficial to all. Thanks
0 votes Thank Flag Link Mon Jan 7, 2008
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