Did You Know: Dual Agency

Dual Agency Dilemma

FYI: “Dual Agency” can be harmful to your health.

The things you have to be careful of continue to multiply. Even a large percentage of the things which are completely legal can come back to bite you in the proverbial “you know where”. One of those things is dual agency. Such a nice sounding phrase. Could end up hurting you about as much as a friendly rattlesnake.

You may not know the word but you have probably been involved in a dual agency relationship without being aware of it. Dual agency exists when a professional represents a person to handle an issue and then also agrees to represent the other party in that same transaction. Most folks would think you were crazy if you decided to use the attorney who is representing your spouse in a divorce against you. You would clearly see that is not likely to end up with the result that is best for you.

Yet, in the real estate world, not only is dual agency common practice; it is totally legal. Most real estate agents are unhappy if anyone (especially me) says that dual agency is seldom your best choice. When an agent represents both sides of the transaction, they get both sides of the commission. That is good for them; not necessarily so good for you. It’s called a “conflict of interest”. Suffice to say that just because the law allows it, that does not mean that regular professionals can balance the opposing needs of two different parties and get the resolution which is best for EACH party. Consequently, the professional is happy, most often the other individuals feel a tad bit taken advantage of.

Anyone who has ever bought a house using the agent who had it listed has participated in a “dual agency” situation where the agent represented both sides of the transaction—the SELLER and the BUYER. If you take a poll of the folks who have done this, most of the buyers and some of the sellers think they got a raw deal BECAUSE their agent was looking out for the other party. Some will tell you that they did not understand that the agent WAS representing the other party as well. You may be surprised when informed that you signed a document which stated you were agreeing to the “dual agency" representation. You made it legal by virtue of your signature.

Dual agency is legal; requires the signature of both parties that they understand and agree to such representation; and is likely to give you heartburn.

Solution: Don’t Do It! Select your own representation, someone who has an exclusive commitment to represent your best interests. You want your agent to recommend the toughest inspection company and then fight to have all the repairs completed which are reasonable under the law in your state. A dual agent has to look out for both parties and is much more likely to find an “easy” inspection company, go light on recommendations for repairs and try to placate everyone, thereby satisfying nobody but themselves.

Would you like to share your spouse??? Is dual agency really in your best interest?? I told you, “don’t do it.”

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(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)