What exactly is dual agency? Who does it benefit?

Asked by Chris Johnson, Sacramento, CA Wed Dec 31, 2008

My agent doesn't pressure us too much, but when we see homes that are listed by her company she seems to bring up the nice features a little bit more. I have read a couple brief blog articles on dual agency and only understand it somewhat. It seems like my agent would benefit by selling me one of her own company's listings. My husband and I get along well with our agent, but we're not sure she is always looking out for our best interests.

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Bill Gassett, Agent, Hopkinton, MA
Mon Apr 10, 2017
There is only one person who benefits from dual agency and that is the real estate agent. If you find an agent trying to defend dual agency run for the hills. There is one word to describe this kind of agent and that is GREED.

With dual agency a buyer and seller give up having representation. The exact reason why so many people hire an agent to begin with. In the web reference, you will see one of the most detailed posts on dual agency ever written.

Take my advice and stay away from this arrangement!
1 vote
Exactly right! Well said, Bill.
Flag Mon Apr 10, 2017
Jeni Walker, Agent, Carmichael, CA
Wed Dec 31, 2008
She might be talking up the features of her colleagues homes because she is more familiar with those homes.
Her colleagues have probably pitched these houses in office meetings that she attended and she may have gone on an office "caravan" touring her colleagues listings.

She may not even be aware that she is cheerleading for her co-workers listings. The better a sales person knows the available inventory, the better she is able to present the product.

No agent is perfect, but it sounds like yours is trying to do a good job.
1 vote
Sue Archer R…, Agent, Palm Harbor, FL
Thu Jan 1, 2009
Everyone is answering your questions correctly but I want to point out something more specific to help you understand better, (hopefully).

Dual agency is regarding the BROKER, in that a buyer is buying a home where the BROKER also represents the seller. Dual representation is where the individual agent, who works for the broker is representing both the buyer and the seller. There is a document that you sign with any offer you present that is called the Disclosure regarding Agency relationship. The second page is the actual civil code that describes the responsibilities of the agent.

Personally, I will not represent both a buyer and a seller on the same transaction, but it can be done. I have no qualms repesenting a client in one of my broker's listings by another agent. Not that I get any financial gain, but I normally know the property better, know how to negotiate better for my client with that agent and generally can make the transaction go smoother when it's an agent I know, and they know me.

So it might be in your best interest that the agent is able to describe the property better, but if you have a question on their motivation, ask your agent!

And best of luck in finding your new home!
Web Reference:  http://www.suearcher.com
0 votes
Actually, the listing is the brokerages, not an individual agent's in the office. Dual agency occurs when the brokerage represents buyer and seller, individual agents do not affect the dual agency relationship.
Flag Fri Feb 24, 2017
Joseph Finne…, Agent, Bethlehem, PA
Wed Dec 31, 2008
Dual Agency is when your agent represents BOTH you and the seller. Showing you listings by other agents in the office does not put your agent in dual agency since another agent represents the seller although the broker would be considered a dual agent since both agents fall under the broker's umbrella.

True Dual Agency occurs when your agent attempts to sell you one of her listings. In Pennsylvania, if this were to occur then the buyer and the seller would have to sign an addendum acknowledging that the agent is representing both the buyer and the seller.

The problem with Dual Agency is that since the agent is representing both the buyer and the seller the agent must ensure that they don't disclose any confidential information to the other party. For instance, if the agent knows the buyer will pay more for the house they can't tell the seller. As a result, the agent must be careful to ensure that neither party feels this has happened. In some cases, they have to remain so neutral that they can't offer the best advice to the buyer or the seller.

Companies like to list and sell the house so that they receive both sides of the commission. As a result, these listings are promoted in sales meetings. Also, your agent is probably friends with the other agents so she would like to help sell their listings.

As another agent recommended, I would probably mention it to her so that it is clear what you expect from her services.
0 votes
Not the law in CA. Brokerages own listings, two different agents same listing owner = dual agency.
Flag Fri Feb 24, 2017
;, , Riverhead, NY
Wed Dec 31, 2008
Dual agency benefits the broker. With this agency, the real estate salespeople involved are forced into a position of neutrality (as opposed to advocating for one side or the other). The brokerage company receives the full commission offered by the seller, but in the process, switch gears from "representing" the seller to more of a facilitator capacity- you become the second party facilitated, but not offered fiduciary.
If you get your own outside representation on a listing within your agents company, you'll have the benefit (if you choose buyer agency) of someone offering the true value/most aggressive offer on a property, as opposed to a neutral position in which they can't advocate for either side.
Get your own representation when dealing with in house listings whenever possible- your gut feeling is correct. She CAN'T look out for your best interest when in a dual agency situation.
Web Reference:  http://optionsrealty.com
0 votes
What do you mean by "not offered fiduciary"? One brokerage representing buyer and seller owes fiduciary duty to both, different agents in the same brokerage does not change the fiduciary relationship. Brokerages (the broker) own the listing, not the agent who procured it. Each agent (or one agent) in the brokerage owes the same duty to both buyer and seller, a fiduciary duty. See Horiike v. Coldwell Banker, etc. (2016) 1 Cal.5th 1024 find at http://www.lexisnexis.com/clients/CACourts/
Flag Fri Feb 24, 2017
Dallas Texas, Agent, Dallas, TN
Wed Dec 31, 2008
Dual agency occurs when a real estate agent is representing both buyer and seller in the same transaction. Since the agent has promised a duty of confidentiality, loyalty and full disclosure to both parties simultaneously, it is necessary to limit these duties in this situation, if both parties consent.

If you find yourself involved in a dual agency relationship, make sure that you completely understand dual agency definition

Keep in mind if she sales you one of her listings her benefit is financial she would earn approx. 6% closing vs. 3% approx. for showing another listing agent home for you to purchase.
Web Reference:  http://www.lynn911.com
0 votes
By this thread, I can see that many real estate agents do not understand the concept of "dual agency". That may be because agents don't understand listings. Listings are owned by the brokerage where listed, not the agent who gets the listing. A brokerage is in dual agency when the listing brokerage represents buyer and seller. See Horiike v. Coldwell Banker, etc. (2016) 1 Cal.5th 1024 Double ending a deal is when the brokerage (the owner of the listing) sells a listing in-house.
Flag Fri Feb 24, 2017
Deborah Lon…, , Torrance, CA
Wed Dec 31, 2008
Dual agency with your agent showing you homes listed by other agents in her company will not give her any additional commission or unusual incentive, like a bonus if in escrow by a particular date, that is not also offered to a non-dual agent. In other words, she doesn't profit monetarily unless she herself has a listing she sells to you. In that case, she will earn "both sides" of the commission, a commission for being the Buyer's agent and one for being the Seller's agent.. In what ways do you think she is not looking out for your interests?
0 votes
Eric H. Wong , Agent, Albany, CA
Wed Dec 31, 2008
Hi Chris;
I think you should talk to your agent about your feelings. It could just be a big misunderstanding. I know that if I sell a house to my buyers that is being represented by my broker, but I am not the listing agent, I do not get any extra cash or benefits from the transaction. Of course my broker is happy, because they make money from both ends of the deal, but I do not get any thing extra out of it.
I have heard of some offices where the agent will get a bonus for selling a home that is represented by their own office, but this should be disclosed to the client to avoid any misgivings as you are feeling, and also for the purposes of full disclosure.
0 votes
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