Friday, December 11, 2015

Could Dual Agency in Real Estate be outlawed across the nation in the future?

Now before anyone gets excited about leaving a comment, (Please Read) this post!
Otherwise I may leave a reply to your comment knowing you didn't read it.

Dual Agency:

Legal in all 50 states. Dual agency occurs when a real estate firm representing the buyer shows the buyer properties where the firm has also agreed to be an agent of the seller. A real estate firm can be an agent of both the buyer and seller in a transaction with the knowledge and written consent of the buyer and seller. 

A real estate firm acting as a dual agent must carefully explain to both buyer and seller that they are representing both parties and their fiduciary duties are different if they represent both parties. 

When representing both seller and buyer, the agent must have the express permission of the respective party in order to disclose confidential information to the other party, such as price, terms and motivation to sell or buy. A Dual Agent owes both the buyer and seller equal representation, and must:
  • Treat both parties fairly.
  • Not knowingly represent one party to the detriment of the other.
  • Disclose facts each party needs to make an informed decision.
  • To assist, as the Buyer and Seller are empowered to negotiate on their own behalf.
  • Assure confidentiality on each party's price, terms and personal information.

Now there are going to some comments stating we have been doing Dual Agency transaction for many years and never had a problem.
That is great, no problems yet!
It only takes once... twice and then the reputation of your firm is under fire.

The number one reason that brokers & agents practice Dual Agency is ... GREED = $$$
There have been so many classes, articles, blogs, and lawsuits on Dual Agency so think very hard about this question.

Can you represent both parties, the Buyers & Sellers equally,
100% equally to both parties?

My answer & opinion to this question is (NO)!

Ethically there are really only two ways to protect yourself practicing Dual Agency, and still there is no guarantee.

1.   If you work on a team and have associates that can either represent the buyers side or sellers side on a transaction.

2.   Or if your doing a Dual Agency transaction, sit down together with the seller & buyer and let the two parties agree on a Dual Agency and let the two parties work together agreeing on the transaction.

We live in the 21st Century and times are changing, clients are becoming more apt to lawsuits and litigation. 
This not be the last time you will read about Dual Agency and I seriously believe in the future that Dual Agency will start being outlawed across the nation.
There are some brokerages that don't practice Dual Agency.

Don't let GREED get in the way of a lawsuit!

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