Dual agency is legal in NJ. I do find quite a bit of difference in having the same agent represent both parties versus two different agents within the same office. While dual agency is legal, it is asking one to serve two masters, which can only be done when both want exactly the same thing. While I have been a dual agent in transactions, I believe it would be better for the industry if such were not an option. Since real estate is regulated at a state level, we will never find consistency.
For years, the value of the real estate agent was access to info. While a small percentage of the public found value in â€œrepresentationâ€, in the eyes of most, Realtors were a commodity. Any one of us with a lockbox key and MLS access were the answer to what the consumer wanted, and that was information. Listings were (and to a large extent remain) the key to leads. We, as an industry, taught the consumers to look to us first to open the gate to information. While the best in this industry have long been strong advocates for their clients, and pride themselves in skillful negotiations, the public looks at us in mass, not for the value of the best.
Why does a buyer end up in a dual agent transaction? Because the buyer made an inquiry on a listing? Thatâ€™s a lead, and we all look for new biz, and we want to sell the properties for the sellers we represent. Is the agent working with the buyer and happens to take them to a listing of their own, because they really believe it is a good oppty for that buyer? Does a buyer receive a referral to an agent and coincidentally, one of that agentâ€™s listings meets their needs well?
When dual agency happens because the buyer calls for info or steps into an open house and becomes interested in the subject property, has that buyer chosen to be in dual agency, or did they happen to fall into it? Despite all the disclosures, many do not understand agency. Typically, even when handed a disclosure or the subject of agency is mentioned, buyers will often quickly say, â€œyes, I know all about that.â€ Often we donâ€™t really know how well they understand.
Once an agent acts between two parties on a transaction, it becomes impossible to advocate for one party over the other. You may try to find a middle ground that makes everyone happy, but is that true agency? In dual agency, the scales may tip ever so slightly toward the seller, particularly when the buyer is previously unknown to the agent. Clearly, I am not saying the agent is dismissing the buyer, only that an established relationship on one side may tip the scale, even if ever so slightly.
I once had a buyer call me who told me he only dealt with listing agents when buying property . His reasoning, he believed he had the advantage in gaining inside info and the agent would push the sale since they could double end the commission. I told him I would not represent him as a buyer (as a dual agent), but I would show him the property on behalf of my sellers. I did show him the property and asked him not to disclose any info to me that he did not want me to pass on to the seller. I advised that I would be happy to provide any and all info about the property to him as a sellers agent.
I have been a dual agent, and may find myself there again. I will not turn away the business when my best assessment indicates I can make a smooth transaction for all. I have had another agent help with the negotiations of offer and acceptance and then picked up and handled the rest of the details of the transaction individually. There are benefits to dual agency in faster and smoother communications and less chance of mix ups.
Bottom line: I think it is better in almost all cases, for each client to have separate and individual representation. Many transactions conducted by a dual agent close successfully with all parties pleased. Still, the risk for potential problems supersedes the benefit.