What Is a Dual Agency Consent Agreement
Depending on the scenario, some agents may be willing to reduce the commission if buyers and sellers agree to dual representation. It is recommended that the seller negotiate a double agency commission before listing the house for sale so that the seller and the real estate agent get along early. Or, if you don`t want to participate in a dual agency at all, this should also be discussed with your real estate agent before signing a listing contract. Dual agency can cause legal problems because real estate agents are bound by fiduciary duties. These tasks require unwavering loyalty to their customers. A buyer`s agent must act in the buyer`s best interest, and a seller`s agent must act in the seller`s best interest. A double agent would demand loyalty to both sides of the bargaining table – a delicate, if not impossible, task. Whether you are a seller or a buyer, there is nothing to fear from the dual agency: if you do not agree with the practice, it will not happen. “The dual agent broker has to make sure both parties know the deal and accept it,” says David Reiss, a law professor at Brooklyn Law School.
His advice: “Home sellers should review the terms of the listing agreement before signing it to see if dual representation is being considered.” “Dual agency is a difficult topic to understand, and it`s easy to make a mistake,” says Ailion. You may not know if the agent is really balancing the interests of both parties, which can lead to confusion. Dual agency is even banned in some states (ask your agent about your state`s rules). “In law, conflicts of interest in representing opposing parties are very discouraged,” says Ailion. And how is it for the confusion: in Kansas City, where the subway is located in two states, the dual agency is legal in one of those states (Missouri) and illegal in the other (Kansas). “Imagine you`re literally crossing a street and you can practice 20 more steps, which is strictly prohibited,” says Anthony West, a Kansas City agent who works in both states. A third example is when a real estate agent organizes an open house and meets a buyer interested in buying the house. If the buyer is not represented by a real estate agent, the buyer can ask the seller`s broker to represent him in the transaction. If the buyer and seller agree that the same real estate agent can represent both parties, the broker becomes a double agent in the transaction. If you look elsewhere, some articles suggest that dual agency is bad, and others say that dual agency is good. So, which one is it? Well, I think it`s fair to say that dual agency is acceptable in certain circumstances.
While this can pose a risk to all parties, it can save time and money overall. Our homes are probably the most important investments we have ever made in our lives. It`s important to get the best “deal” possible, but it`s often forgotten that it`s also important to get the best representation available. This is not something you will get with a dual agency contract. Why did these states ban dual agency? The answer is simple: it does not benefit consumers! Complications can arise with transactions with two agencies, which is problematic for all parties – including the agent. For example, a double agent cannot use his difficult negotiation skills to get both the highest price for his seller and the lowest price for his buyer. That`s impossible. In addition, a double agent might be tempted to opt for a higher selling price to put more money in their pockets via commission.
This is one of the few reasons why dual agency is not legal in all 50 states. The general term agency refers to the relationship an agent has with a buyer or seller (or, in our case, with both parties). A single licensee may act as a dual agent or a sponsoring broker may allow one or more of its sponsored licensees to act as dual agents in the same transaction only with the informed written consent of all clients. Statutes compiled by Illinois. “Dual Agency” means an agency relationship in which a Licensee works with both the buyer and seller, or with the Landlord and Tenant in the same transaction. However, such a relationship does not constitute double mediation if the licensee is the seller of the property he owns or if the property belongs to a real estate company whose sole owner and intermediary is the licensee. A dual agency relationship should not be interpreted as existing in a circumstance in which the licensee cooperates with both the landlord and the tenant in relation to a tenancy agreement that does not exceed a period of three years and the licensee is the lessor. According to the agency`s Louisiana law.
Dual agency bypasses a real estate agent`s fiduciary duty to be loyal to you. While the agent is still required by law to keep your private information confidential, and while they cannot use it to give their other client an unfair advantage over you in the transaction, a lawyer might advise you to be careful about what you say about your agent. A real estate agent is hired to sell the home of a client named Mary. This real estate agent has a second client named Rob who is in the market to buy a home. Rob visits Mary`s house and decides to buy the house. Since Rob and Mary are both clients of the same real estate agent, the transaction is considered an example of a double agency. Another example of a double agency is when Rob and Mary are represented by different real estate agents, but both real estate agents work for the same brokerage firm. It can be difficult for agents to remain neutral while acting as a double agent. Think about it; Sellers want to land at a high price, while buyers want to land at the lowest possible price. Remember that the higher the selling price, the more commissions an agent earns, which leads to an obvious conflict of interest. In some circumstances, when both a buyer and a seller work with the same agent, the agent and clients may feel that the process is a little more streamlined because the real estate agent can prepare forms and documents for the buyer and seller and communicate quickly between the two parties. Dual Agency removes a second real estate agent from the equation because the buyer and seller work with the same broker.
Buyers or sellers may be inclined to work with a double agent because they want to obtain confidential information about the person buying or selling the home. As a seller, you can assume that you can ask the real estate agent to tell you the highest price that the buyer is willing to go to buy your home. .
