First time home buyer- Dual agent

Asked by Lucy, New York, NY Thu Dec 6, 2012

My sales agent just asked me to sign a disclosure form of understanding the fact he's a dual agent, meaning he's representing both the seller and the buyer(me). I read that I'd lose the "undivided royalty" and "full disclosure" from the agent. Does that mean I shouldn't go with him when it comes to buying my first apt in New York City( Manhattan)? With common sense, of course the agent is going to be on the seller's side because he makes money off of seller, not me.

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17
Mitchell Hall, Agent, New York, NY
Sun Dec 9, 2012
Lucy,

What do you mean "My sales agent"? How is he your agent?

Is he a listing agent that you contacted about his property?
Was he already acting as a buyer's agent showing you properties listed by other brokers?

It should only be dual agent if he previously was acting as buyer agent showing you properties listed by other brokers and you decide that the property that you want to purchase is his listing or a listing of another agent with the same brokerage. Then it would be dual agent with designated agents/seller/buyer.

If he is a listing agent and you are interested in buying his listing and had no previous buyer agent relationship with him you have two other options other then dual agent.

1. He is the sellers agent and represents seller. You sign that disclosure only. He must treat you fair and honestly and in good faith.

2. You hire a buyer's agent to represent you.

There is no need for dual agent unless he has already shown you other property listings. He may not understand agency law. Many agents don't. However, dealing directly as a buyer with an honest knowledgeable experienced listing agent albeit representing seller may still be a better option than hiring an in experienced weak buyer's agent.

Best,

Mitchell Hall
Lic. Associate RE Broker
Corcoran
347-921- 4255
mhall@corcoran.com
http://nycblogestate.com
http://corcoran.com/mhall
2 votes
Bill Eckler, Agent, Venice, FL
Fri Dec 7, 2012
Hi Lucy,

The best arrangement for both buyers and sellers is when each party has their own personal representation.

Simply stated, if you were going to trial, would you feel comfortable having the prosecuting attorney serve a dual capacity and defend you? This may be an over simplification but it should get the message across.

Good luck with your purchase.

Bill
2 votes
Terry Bell, Agent, Santa Rosa, CA
Tue Dec 10, 2013
Dear Lucy, the fact that your agent is disclosing this to you, and explaining it, shows some ethical sense of duty to you. I like to explain to my clients that when an agent is representing both parties, they have a duty not to disclose private information to either party that would not want it shared, you would certainly not want the agent to tell the seller too much, and so likewise, the agent has a duty not to share the seller's personal info with you. In a way there are some benefits, your agent knows the house inside out from listing it. Your logic about agent having loyalty to the seller because he gets paid by them is flawed. The fact of the matter, is that unless the agent also makes you happy, the deal could fall through. You are an integral part of the equation. I urge you to be direct and ask your agent about your concerns, and I think you may be surprised by the "common sense" answer you are given.
1 vote
Terry Farnsw…, Agent, Lisle, IL
Fri Dec 7, 2012
Lucy,

I like Bill's answer below, and the comparison to having an attorney represent both parties during a trial.

Although most agents will likely "guarantee" that they can represent the best interests of both parties effectively, in my opinion it's almost impossible to. How can they ensure they are getting you the "best deal possible" - when it's their duty to deliver that same promise to the other party as well?

In a dual agency situation - agents shouldn't be taking "sides", as they owe the same level of service and disclosure to both parties. If it were me, however, I would want an agent who is representing and protecting my, and ONLY my, best interests. At the end of the day - it's really up to your discretion and comfort level on which way to go.

Hope this helps!
1 vote
Tom Dawson, Agent, New York, NY
Fri Dec 7, 2012
Lucy, I'm also a broker here in Manhattan. The disclosure form is something we are required to provide to clients. As another commenter has said, it is extremely difficult to be a dual agent because, as you have stated, the seller's agent has fiduciary responsibility to his seller and must give undivided loyalty to his seller. So in my opinion its difficult to fairly represent both sides. For this particular apt, you may have no choice but to go with this person. But if I were you, I would find another agent to represent me when looking at other apts.
1 vote
James Furlong, Agent, Brookline, MA
Tue Dec 17, 2013
I am not a fan of dual agency because the agent cannot represent the best interests of both the buyer and the seller. Of course the agent likes getting the full commission. If the agent has already showed you a particular unit where he represents the seller I would suggest that he failed to satisfy the disclosure rules and you might not want to get involved with that particular property or agent. If he has not showed you the apartment I see no reason why you don't get another realtor to represent you and have that realtor show you the unit. Good Luck.
0 votes
Jim Simms, Mortgage Broker Or Lender, Louisville, KY
Wed Dec 11, 2013
I would much rather have a full-time, experienced, ethical, dual agent than someone that sells a home once in a blue moon. I hope this info is helpful, good luck,

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
I answer questions about financing real estate based on my decades of experience dealing with mortgage underwriters. This answer is my personal opinion, has not been reviewed or approved by the company I work for. I do not offer legal or tax advice, if you need answers from an attorney or CPA find one knowledgeable in your local market.
Web Reference:  http://jamessimms.com/
0 votes
"I would much rather have a full-time, experienced, ethical, dual agent than someone that sells a home once in a blue moon."

How about a full-time experienced ethical agent who isn't a dual agent? I think that is what myself and others were recommending.
Flag Wed Dec 11, 2013
James Deskins, Agent, Worthington, OH
Wed Dec 11, 2013
Yes, it means you shouldn't go with him. Dual Agency is a bad relationship, period. Google "dual agency" and you will see.
0 votes
Joseph Hasti…, Agent, Bayside, NY
Fri Dec 7, 2012
Don't do it Lucy. On the Agency Agreement form there is also a designation for "Dual Agent with Designated Sales Agents." In that scenario you could use another agent from the same firm but one represents you and the other represents the seller. They both have to sign off on the agreement. I just think it's cleaner that way. Of course, you are entitled to representation regardless and you can use a totally different agent/broker to represent you in the deal making the listing agent the sellers agent. I would not go for the dual agent thing. Good luck in whatever you decide.
0 votes
Veronika Baba, Agent, NY,
Fri Dec 7, 2012
Hi Lucy.
The disclosure form is just telling you the fact that the agent is representing the seller and you in case you don,t have an agent and you want to buy that the property without having an other agent to represent you.
If you decide to buy that property and have your own buyers agent you can do that. The disclosure form is not a contract and is not obligating you of anything.
When you come to buy your first place in New York City you can chose any agent you like.
I hope I answered to your question.

Veronika Baba Kian Realty NYC
email : Vbaba@kianrealtyNYC.com
phone 347 528 5573
0 votes
Elena Ravich,…, Agent, New York, NY
Fri Dec 7, 2012
You are right, a potential conflict of interest may arise, because this agent is hired by the seller and owes him a duty of acting in the seller's best interests, i.e. selling at the highest price to the most qualified buyer. If the same agent represents both parties, the seller and you, he will have to act in your best interests and get you the best deal possible. According to the Real Estate Board of New York rules, you can get your own representation and bring in your own agent at any time of the transaction, and every listing broker has to cooperate with a buyers broker. Both agents share commission at the closing. Negotiating the price, getting comparable sales and rental data, preparing board packages - these are some but not all examples where it is advisable to be represented by your own agent, who will watch out for your interests.
0 votes
Nicolas Puyg…, Agent, New York, NY
Fri Dec 7, 2012
Hello Lucy,

Whether you should go with him is a question that ultimately turns around whether you trust him enough to represent both you and the seller. This is a question that only you can answer but I think that it is always better to have your own representation. You want to obtain the best price possible on the property. As Terry said, it's always better to have somebody who represents you and only you.

I hope this helps.

Nicolas Puygrenier ǀ Licensed Real Estate Broker
Mona Lisa Real Estate Group LLC
419 Lafayette Street, New York, NY 10003
Telephone: 917 499 1917
Email: nicolas.puygrenier@monalisanyc.com
0 votes
Christopher…, Agent, Tarrytown, NY
Fri Dec 7, 2012
Hi Lucy, You should always have your own representation. It isn't possible to represent both buyer and seller and have both parties best interest in mind. The sellers agent represents the sellers best interst all of the time. Anything you say can and will be used agaiinst you in a negotiation. You've answered your own question now we will validate your answer :)

Christopher Pagli
Accredited Buyer Representative
914.406.9023
0 votes
Anna M Brocco, Agent, Williston Park, NY
Fri Dec 7, 2012
If you are comfortable with the agent, no reason not to consider dual agency; if you are not, you can ask his/her broker owner to assign you another agent from within for the duration of the transaction, or, you can choose to work with whoever you like.....
0 votes
Janet Nation,…, Agent, Baldwin, NY
Fri Dec 7, 2012
Here's the thing, and I am only talking about NYS, he can only be a dual agent if the listing that he shows you belongs to him ORr if he is the broker/owner and shows you a listing of one of his agents in his office. Most importantly he is working with you as a buyer's agent in both examples. If he working with you a buyer;s agent, you would have also signed a Buyer Broker Bgreement form in additional to the Agency Disclosure Form. I can't tell you how many agents are totally confused about agency. If you don't feel comfortable find an exclusive agent. However, note buyer agency is not common practiic e in Manhattan, so he may be doing his own incorrect version.
0 votes
James Furlong, Agent, Brookline, MA
Fri Dec 7, 2012
Hi Lucy. In dual agency the agent should not be on either "side", but it is a difficult path to follow. The dual role is not my personal preference, but I am sure that there are agents that do their best to be "fair" (in the absence of undivided loyalty) to both parties. I do think that it is important to point out that in dual agency the agent usually gets paid the complete sales commission and does not share it with a buyer's agent - $$ can be an evil motivator. There are some issues that cause me concern in your situation. At what stage in the process did the agent inform you that he would be in the role of "dual" agent? At some point in time (at least before you appeared in the picture) he was only the seller's agent and that should have been disclosed to you. Did he ever ask you if you were working with a buyer's agent? These are just some of the issues that make the dual role difficult. My advice to you is to find a buyer's agent to represent you - if the seller's agent is not willing to work with you on this particular property, move on to another property. Best of luck with your home purchase. James
0 votes
Tina Lam, Agent, San Jose, CA
Fri Dec 7, 2012
That's a common question for first time home buyers and the answer comes down to your personal level of comfort with the arrangement. There's no amount of debating here that will change your concerns about divided loyalties by the listing agent. We don't know who he is and no one can absolutely guarantee his conduct.

So, if you're not comfortable, you can choose to find another agent to represent your interests exclusively.
Web Reference:  http://www.archershomes.com
0 votes
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