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Asked by CC, San Jose, CA Thu Feb 5, 2009

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CC, Home Buyer, San Jose, CA
Tue Feb 10, 2009
Hello Everyone,

Thank you so much for these answers. They make me rethink a lot. I really appreciate it!
0 votes
Steve Mun, Agent, Campbell, CA
Thu Feb 5, 2009
As you can see by the majority of the answers from Realtors here, dual agency is seen as being problematic.

Even if the agent tries their best to remain neutral, there always will be the issue of conflict that you raised. Real Estate is a zero sum game, a seller's gain is the buyer's loss and vice versa.

So like me and many other Realtors, the best practice it not to engage in it at all and eliminate the temptation.
Web Reference:  http://www.stevemungroup.com
0 votes
Erica Glessi…, Agent, San Jose, CA
Thu Feb 5, 2009
Well, I believe the right answer is what is right for this very situation. There is not one simple answer that can be applied for every situation.

With a short sale, it is imperative that the agent or agents working on the transaction understand how to progress with diligence. I am not clear that bringing in another agent to represent the seller -- you already have a contractual understanding that you will be buying this particular home -- would necessarily be in your best interest. Because some agents cannot wisely navigate a short sale. And an agent who is not talented in this regard may actually cause damage and blow things up.

I would say a good rule of thumb is to have each side have "an agent" yet some things are not black and white.

Something else to note is that banks prefer 4 percent total commission in a short sale. Wells Fargo said to me recently that 4 percent is the amount that can be approved without going higher up for an exception. The standard (well, if one can call it that) is 3 percent per side. It is extremely unlikely that your agent is going to be compensated 6 percent. Some homes right now are offering 4 percent for just one side (especially hard to sell foreclosures). So, the compensation should not be too far out of the realm of normal.

I would not say dual agency is bad in and of itself. Now, two very good agents, one each representing each side, is definitely best. But not every situation can provide that.

You can do some research on what your due diligence should be, and what appropriate steps should be taken to inspect the home once you get bank approval. If you don't get bank approval, the whole thing is "moot" and meaningless.

If your agent wins you bank approval, well, I'm not sure that the dual agency is something that worked against you.

I personally do not "double end" and do not seek opportunities to represent both sides. It is not the best place to be in when you get into a pinch. It is fine when things are smooth sailing.

However, because you chose the agent, you do have the upper hand, and the power of your agent wanting to represent you in the next purchase if anything with this one falls through.

If your agent's motivation is to have everything smooth, clear and as few complications as possible, then it might actually work in your favor.

I would say in general, bad idea. However, in this case, have a frank conversation with your agent and communicate your concerns. It could be the simplest path to a closer of escrow.

Erica Nelson
http://www.EricaNelsonEstates.com
0 votes
Andrea Wince…, Agent, Milpitas, CA
Thu Feb 5, 2009
A long time ago, dual agency was not allowed in California real estate. There is a reason for that.
0 votes
CJ Brasiel, Agent, San Jose, CA
Thu Feb 5, 2009
CC -

I think the biggest point not being discussed here is that when and agent is going to represent both buyer and seller, both clients should be in agreement. It does not sound like you are in agreement with the agent representing the seller as well.

For all the reasons other agents have pointed out below, let the agent know of your feelings about the situation and ask for sole representation. Mostly likely he/she will find someone else in the brokerage to represent the seller.

CJ
Web Reference:  http://www.TalkToCJ.com
0 votes
Everard Kort…, Agent, Lancaster, PA
Thu Feb 5, 2009
The tranaction of buying / selling a house involves more than the price. The price still needs negociation .The bank might have an idea what they want for it ,but that does not mean that the final price is set in stone. Often there are other issues involved like repairs that need to be made and negociated since banks usually don't want to spend the money.
Your agent has now a double incentive to sell you the house and you have the burden to look out for your self.This is not an ideal situation.Put your self in the shoes of an agent for a moment and think it through.
You, the amateur,are now dealing with professionals at the bank with a neutral advisor.I wishyou well.
0 votes
Arn Cenedella, Agent, Greenville, SC
Thu Feb 5, 2009
Hi CC

you are right to feel uncomfortable give the circumstances you describe.
the agent is probably right, the bank is going to do what the bank is going to without much regard to what agent says.
in general, as a buyer I would try to avoid a dual agency situation. as other agents have noted, how can one agent represent both parties? it is a difficult situation. it all depends on the integrity of the agent.
in a dual agency situation, i would tell agent what your top offer is.
i would just say I want to offer "X" even if you will pay "X" + $20,000.
do not tell agent you will pay "X" plus $20,000.

just a clarification, since the office/company is the legal agent, if two agents from the same company represent a buyer and seller, you have DUAL agency - since the company does represent both parties.
so dual agency is not just the SAME agent but it also includes the SAME copmpany.
in the case of the SAME company the responsibilites are more easily kept separate.
as one agent represents the buyer and one agent represents the seller.
this however is a preferable situation to when the same agent represents both.

hope this helps - good luck.
0 votes
Mario Tavares, , San Jose, CA
Thu Feb 5, 2009
Dual agency is a touchy subject and every Realtor has their own opinion about it. Personally, I don't see how you can do both jobs effectively while double "ending it". That being said, your agent does have a point. The negotiation of price will be primarily with the bank in the case of a short sale. By definition, the "seller" can't walk away from the deal with any gains. If you feel uncomfortable about the situation, let your agent know. He/She may be able to refer it to another agent within their office who can act as your agent exclusively (or as the sellers agent).
Web Reference:  http://www.marioforhomes.com
0 votes
Bill Eckler, Agent, Venice, FL
Thu Feb 5, 2009
CC,

From an agent's perspective, it's a great opportunity to make double the professiional services fee.

From a buyer or seller's point of view, eventhough this may be legal in some locations, the customers live with the doubt that the agent could exist in an impartial world.
0 votes
April Tavares, Agent, Campbell, CA
Thu Feb 5, 2009
Dear CC,

Dual agency when defined as the same agent (not office) representing both sides of the transaction is a practice that I do not engage in personally. In my opinion, it is very difficult to maintain fiduciary integrity to both sides of the transaction when negotiating the details of the transaction.

A buyer's agent is a Specialist in the field of real estate hired by the Buyer on an EXCLUSIVE basis to help them locate and negotiate the purchase of their property.

Some of the Many Benefits of having your own representation are:
• Act Independently of listing agent/broker
• Confidentiality concerning your money and your motivations
• Analysis of sales data to determine the true property value
• Expert negotiating to get you the best price and terms


By retaining the services of a Buyer’s Agent, you will have equal representation in real estate!

I hope this helps. Feel free to contact me if you would like to discuss further.
408.309.5471 or April@AprilTavares.com
Web Reference:  http://www.AprilTavares.com
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