The Age Old Dual Agency in Real Estate Debate

February 16, 2010
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flynn The Age Old Dual Agency in Real Estate DebatePlease welcome AG’s newest writer, Patrick Flynn who has been a practicing real estate professional for 13 years and a Designated Broker for going on seven of those years. Patrick is a Certified Real Estate Instructor who has coached many agents in their business and joins us to talk about a variety of real estate topics, starting today with the divisive dual agency debate. Please welcome Patrick in the comments!

Dual Agency

2207307656 b71dc9d2ef The Age Old Dual Agency in Real Estate DebateAs a 13 year veteran of the real estate fray (7 of those as a Designated Broker), I’m always taken when I speak to a group of my peers about this highly charged subject. I can’t imagine there are many in our profession that will champion the questionable ethics of this practice, but the fact is that Dual Agency is still legal in Washington as in other States in the Union. I know this is an age old debate and it has been hashed out online and off, but there still seems to be a great deal of unrest about the issue AND many people new to real estate blogging haven’t fully considered the debate.



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Not to put too fine a point on it, but what other commission based business in the world allows a single agent or Broker to represent two separate parties, both emotionally divided with separate agendas and needs? It just doesn’t happen anywhere else…except in real estate!

The two sides of the argument:

Since Dual Agency is legal, there will always be that sect that thinks it’s acceptable. So, I would submit to you, “Change my mind.” Offer me some logical explanation that Dual Agency is a tolerable practice in our industry. And, no I will no accept the answer, “Because we can make more money.” That’s the real problem with Dual Agency to begin with, isn’t it?

Dual Agency is the ultimate no win Scenario. Even if all parties agree in writing (and if you explained the likely pitfalls and risks to both parties…they never would agree) you simply cannot perform your prescribed duties of agency. Whether your state prescribes to a fiduciary or statutory list of responsibilities to a principle, you immediately violate both once you engage in an agency relationship with separate parties. You simply cannot perform… you can’t! And, when you make this arrangement contractual, you double your risk for lawsuits, forfeiture of your license and most certainly a quick exit out the door! Your prescribed duties, among others, are to be loyal to the seller or buyer by taking no action that is adverse or detrimental to the seller’s or buyer’s interest in a transaction; to timely disclose to the seller and buyer any conflicts of interest and (in a fiduciary agreement) put your client’s interests ahead of all others, including your own. How can you possibly do that ‘faithfully’ for two separate parties? Well…I’m listening!

If it’s so bad, why is still around?

MONEY! Plain and simple. In essence, Dual Agency is a hold over from the days before we had agency laws that protected buyers. I view Dual Agency sorta like your appendix, it no longer has any practical use but for whatever reason, we’ve not evolved enough to purge them from our DNA. And, both can kill you when they go bad!

Despite all the potential damage and irreparable harm that can be done to both your clients and you, every once in a great while, a Dual Agency transaction goes off without a hitch and all of the sudden, common sense and integrity are somehow replaced with that little devil on your shoulder that tells you, “Look at all the money you made!”

In my view, the real tragedy in a Dual Agency transaction is the fact that by supposedly offering to be faithful to both parties, you are withholding vital information if it at all conflicts with the others interests. In essence, stealing from them the one thing they need most…your skill, knowledge and most of all, your professional insight to help them make the best decision.

So, what should I do to avoid Dual Agency?

The first question I would ask as a buyer or seller is, “Do you practice dual agency?” As I said, this may be a mute point to many in our Union because their State has wisely outlawed Dual Agency. But, if you are unsure of your States laws, ASK! The ethical agents out there will avoid Dual Agency like the plague. So, common sense would dictate that if you get a sense of apprehension or evasiveness from your agent or they flat tell you they do practice Dual Agency…you may want to look for a new agent.

Dual Agency is a huge liability for many Brokers and fruitful grounds for lawsuits.

So what should you do? Stick to your guns and insist on working with only agents and Brokers who do not practice Dual Agency and will solemnly commit to referring any buyer to a cooperative Broker who wants to buy your listing and the same for any seller that might want to look at an offer from a buyer you already represent.

Hopefully, states will come around and abolish this archaic business practice but until that time, all I ask is that you only work with principled agents and Brokers that have the integrity to forego the lure of a big paycheck for proper practice of putting the client first!

Patrick Flynn is a 13 year Veteran of this Real Estate fray and a blogger on mySeattleblogs and is active in various social networks. Like many writers at Agent Genius, Patrick wears a few hats other than a Broker's lid- he is also a Certified Real Estate Instructor for the State of Washington and has enjoyed delivering 1,000+ hours of clock hour and non-clock hour approved courses in his career. Patrick has also been a Designated Broker since 2003 and revels in being able to coach and mentor fellow real estate professionals.


  • http://flatfeerealty.com Fred Romano

    Oh what fun it is… I agree and disagree. Here is why…

    I disagree because I have been a dual agent about 4 or 5 times in the last 7 years, and all have closed without any issues, HOWEVER… I was very upfront and ethical with all clients to let them know that my duties would be diminished – None of them cared and all of them had the option of not allowing it.

    I do agree that it is an “old school” method that really has no place in today’s real estate business. And I will likely never be a dual agent again. The reason? I am a flat fee broker for the last 3 years and all the leads from my listings go straight back to the seller.

    There can be no conflict – I have eliminated the chance for it to happen. I am much happier now and getting paid for my services. Plus I rarely work with buyers (more for others!) becuase I am too busy listing. – Great post!

    • http://www.reneeporsia.com/ Renee Porsia

      Fred, you told your clients that your duties would be diminished? You should have told your clients that your duties would be non existent because when an agent is a dual agent, first you HAVE to get in writing from both parties that they are fine with it and then you can’t do anything for either one of them. All you can do is find out from the buyer how much they want to offer and then take it to the seller. That’s it! You can’t be just a little pregnant!

      Also, I wanted to ask you, why you are a flat fee broker now?

  • http://www.4SaleByToni.com Toni Dalrymple

    Thanks for bringing this up for discussion. I have been on the fence for awhile about this subject. Ouch!!

    Personally I have made a decision to not be a Dual Agent on my short sale listings. There are 2 reasons I have adopted this position. First, the potential legal issues that can come about with the nature of a short sale. These transactions are already a bit more risky and I dont want to add any other reason for a Lawyer to salivate. Secondly, banks regularly cut the commission paid to agents that represent both buyer and seller. Bank of America has a position not to pay more than 4% on investor owned dual transactions per a discussion I had with their management last week. Representing the Seller and referring out to a Buyers Agent equals more commission.

  • http://www.yankeenewengland.com Dan Toman

    I disagree, pretty much wholeheartedly.
    I mostly disagree because your argument is about money. I have this saying. “Everything is not a dollar”. Any agent who goes into any transaction whether it be as buyer’s agent, listing agent or dual agent or even designated agent; who does so to simply earn a commission is already poised to violate some part of their code.
    Clearly, there are situations where are dual agency would not serve anyone’s interest and that is why also the laws stipulate VERY CLEARLY what steps need to be taken before a dual agency situation can exist.
    Agency rules were not pulled out of thin air, and they are constantly scrutinized. Put me in the column of being in favor of dual agency. I’ve had contracts signed in the presence of both parties at the same time, right in the living room. Real estate doesn’t have to be an ‘us versus them” process, provided that all parties, and I mean all of them, have full material disclosure of the property and goals of everyone involved.
    Dan

  • http://www.teambenya.com Jonathan Benya

    Dual Agency Definitions Vary from state to state though. For example, in MD (My state), the BROKER is the dual agent. A single agent cannot act as representative for both parties, but a broker can. So, for dual agency to occur in MD, two different agents would be working for their client (1 for buyer, 1 for seller), but the Dual Agency is actually on the broker, as all salespeople are considered agents of the broker.

    I’ve been in the situation many times, I personally don’t see a problem with it. However, other states allow Dual Agency to occur with 2 clients and a single agent, in which case I would have to say it benefits neither buyer nor seller.

    • http://www.charlestononlinehomes.com/blogs/howard_arnoff/default.aspx HowardArnoff

      Jonathan, that would be designated agency in Charleston SC but having responded to that point, any professional real estate agent that thinks that they can properly represent both parties in a transaction should have a discussion with an attorney who represents both sides in a divorce (or any other contentious issue) and see whether they believe both parties can be represented equally.

      Can anyone say fiduciary with a straight face and still continue to practice dual agency.

      Patrick, great post and welcome to AG.

  • HalBenz

    Patrick,

    Boy…nothing like poking the dog on your first AG post!! (Welcome to AG)

    I agree 100%! In my state (NJ) dual agency is legal, even if the ethics are debatable. And as a practicing broker, I can assure you that far too many agents don’t adequately explain the ramifications for their clients. It’s handled far too casually and in my opinion, far too sloppily. In NJ, agency runs with the brokerage. So technically, agents from company offices 100 miles apart would still be practicing dual agency.

    I agree that this is a throwback to pre-buyer agency days. It’s a practice that just needs to change…

  • http://www.realty4atlanta.com Dan Connolly

    Okay I will take the bait. I believe that you can be an ethical single agent dual agent. I have done it many times over the last 25 years and I know that it is dangerous grounds in terms of liability but have never had anyone complain, much less sue me.

    I have sat on the sidelines of a number of these debates because the people who are against dual agency have a kind of religious fervor or cult-like opposition. It seems kind of hopeless to convince those folks of anything, but here is the crux of my belief:

    I think that the negotiation does not have to be adversarial. People keep comparing it to a divorce. How can an attorney represent both sides. I don’t see the sale as a hostile event. Its more like a marriage in my way of thinking. Do you need two priests (or rabbis or justices of the peace) to perform a marriage? Obviously not, because both parties are working for the same goal. Well guess what? In a successful sale, both parties are working for the same purpose. What’s the bone of contention? The price! So the seller has their bottom line and the buyer has their top price. If they come together there is a successful sale! If not the buyer goes off and buys something else and the seller looks for another buyer.

    Somehow laced through everyone’s argument is that somehow the buyer’s agent is going to be able to help their buyer get the Seller to sell for less than they might really want to. Puhlease! Or the listing agent will help the Seller get more from the Buyer than they actually want to pay (roll eyes), and if we represent both parties we somehow won’t be able to help them both get what they want. A sale does not have to be adversarial. Sure the Seller wants to get the most they can and the Buyer wants to pay the least they can. An ethical buyer’s agent doesn’t whisper that they think one party or another might go further, they simply encourage both to make up their own minds on what they are willing to do. Today the appraisers decide what the value is anyway, it doesn’t really matter what the agent thinks.

    Then we get to the economics. Most of the dual agency transactions I have been in, I have reduced my commission and helped close the gap between what the buyer wants to pay and what the seller will take. Sometimes the reduction is used to pay for some repairs turned up in the inspection sometimes for closing costs. it can be a win-win. It can be ethical.

    I will close with a final thought. Do the opponents of dual agency think that a seller can ethically sell to a buyer without an agent? Do you not think that the seller and buyer are capable of deciding for themselves what they are willing to settle on? Couldn’t an agent simply be a facilitator of that conversation, working for a win-win and trying to help everyone get what they really want?

  • http://deansellsaz.com Dean Ouellette

    I am going to agree and disagree. I agree there should NEVER be a transaction with a buyer and a seller under one license, but I have been in at least 4-5 deals in the last year where I had the buyer and an agent in my office had the seller. I represented the buyer 100% as I would in any case. I see no problem at all with limited dual agency where I represent one half and someone in my office represents the other. My loyalty is still to my client and I will represent them 100% as will the other agent involved in the transaction.

  • http://nohasslelisting.com Russell Shaw

    What Dan Connolly said + welcome to AG Patrick!

  • http://www.LiquidBlueRealty.com John Kalinowski

    What Dan Connolly and Russell Shaw said! It’s also possible to represent the seller and allow the buyer to represent themselves, without having to be a dual agent. At least in Ohio, our agency disclosure form allows us to check a box that states that the buyer does not have an agent and is representing their own best interests. As long as you explain that up-front, it’s not an issue.

  • http://www.massrealestateguy.com Jim Gatos

    I agree with Dan Connolly too…. No reason to “give up” your half to a possibly unknowing agent and wind up with more of a mess than the one you may be trying to avoid!

  • http://www.charlestononlinehomes.com/blogs/howard_arnoff/default.aspx HowardArnoff

    @Dan, of course you are right, it does not have to be an adversarial transaction and I just used a divorce attorney to make my point.

    But I’m not talking about whispering whether the buyer or seller will move from their position, I’m talking about representing the interests of *only* one party in a transaction. Even when both parties are happy when the seller sells their home and the buyer gets the home they want, the dual agent effectively becomes a facilitator and takes (in many cases) both sides of the commission.

    Wouldn’t it be better if the agent referred one side to another agent at the brokerage and put up a firewall between them to really give both parties their own representation. That is what designated agency does in SC.

    Other than that, we may as well expect more self represented real estate consumers. They just might think they don’t really need an agent after all.

  • http://www.mySeattleblogs.com Patrick

    Thank you all for your spirited responses and your strong positions on this hot topic. I guess the Dual Agency issue stems from my very first deal 13 years ago when I made the mistake of writing up one of my listings. I had zero idea what was going on…I even tried to convince the buyer to waive her inspection, it’s nothing short of a miracle I’m still here!
    As for Jonathan and Hal, the same applies in Washington and as the Designated Broker, I have been a Dual Agent (by default) several times and have always made it a point to be extra vigilant on those transactions.
    As for John’s comment…that is also available to agents in Washington and done properly, is a great solution to avoiding any issues…as long as the buyer signs a “No Agency” Addendum.
    Also, Toni, Dan C, Dan T, Howard, Fred, Russell and Dean…I appreciate your comments. This what I love about this forum!
    Again, thank you for welcoming me to AG…I plan on posting more thought provoking articles so stay tuned!

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  • http://www.allphoenixrealestate.com Jonathan Dalton

    > The ethical agents out there will avoid Dual Agency like the plague.

    What an amazing wide brush you’re painting with …

  • http://www.move2pennsylvania.com ericaramus

    I am with Dan on this one. I do try to avoid dual agency simply because I prefer to work one side than 2. However, it is legal in PA if both sides agree and it is disclosed, and I have closed transactions as a dual agent. You must take special care with it, and be super diligent in your documentation to be able to prove you have not favored one side or the other. But the times I have done it, it has NOT been adversarial or like a divorce situation at all! I agree with the statement that ethical, professional agents can handle this situation well. An unethical, unprofessional agent — well that is a nightmare. But then again when is it NOT a nightmare with an unethical/unprofessional agent in any situation?

  • Duke Long

    Patrick,
    I could be original, but instead I will quote myself…”Welcome to the Jungle.”

  • http://www.bawldguy.com BawldGuy

    Over the last 51 years, Dad (rest his crusty soul) and I have closed in excess of 5,000 dual agency transactions. Mine have been, for the most part at the behest of at least one of the principals involved. Furthermore, the do so knowing most of the time they’ll net less if they’re sellers.

    Guess that makes us bona find spawn of Satan. :)

    Dual agency goes wrong due to either incompetence, unethical behavior, or both. It’s been my experience those against DA deals believe incompetence, bad ethics, etc., don’t exist when all principals are separately represented.

    Those self proclaimed guardians of all that is holy, can take a pause for the cause and read my mind. :)

    • http://www.reneeporsia.com/ Renee Porsia

      Well, Mr. Bawldguy, I’m sure when you practice dual agency you are probably violating some rule, law or being unethical in some way.

      • http://www.phoenixrealestateguy.com Jay Thompson

        Renee -

        I know Mr. Bawldguy, and I can assure you he doesn’t violate any rules, laws or act unethically in any way shape or form.

        I abhor single-agent dual agency, but if anyone can pull it off, it’s Jeff Brown. To call him unethical is simply wrong, on many levels.

        Jeff – I don’t care for single-agent dual agency at all, but I do not think for a moment separate representation eliminates incompetence and bad ethics.

  • http://www.mySeattleblogs.com Patrick

    Jonathan-Thank you for your comment and I agree 100%.
    Eric-Great point about avoiding unethical agents…we all should be so lucky.
    Duke-I’ve been so warned…it’s always fun being the new kid.
    BawldGuy-Congratulations on closing so many deals. You’re not Spawns of Satan…lucky as Hell, but not Spawns of Satan.
    Renee-Your statement got me thinking. If there was an imaginary rule that stated “The most you could make is the agreed commission” when you took the listing and no chance of making both sides of the deal (as is the lure with Dual Agency), I wonder if there would be anyone, with all the trappings that go along with this practice, who’d still enter into a Purchase and Sale Agreement representing both parties?
    I still believe it’s only the lure of more money that agents even venture into this dangerous arena.

    • http://www.reneeporsia.com/ Renee Porsia

      Hey Patrick,

      If Realtors could only make one side of the deal no matter what, bet your bottom dollar, only one side would be represented.

      Whenever I write about dual agency on Trulia and how I am against it, it creates such drama you would think that I committed some type of crime the way the Realtors all start beating up on me. Funny thing is though that most who do practice it, do not realize that they can’t do anything but be a paper pusher. They just do not get it!

  • http://www.bawldguy.com BawldGuy

    Really Renee?

    Though this is surely a lightweight makin’ waves lookin’ for attention, I wonder what my friends Benn and Lani think about one of their writers accusing not only me (who cares), but loyal AG readers, solid pros, AND a fellow AG contributor, that known incompetent and serial law breaker, Russell Shaw.

    Well, at least I’m in good company. :)

    • http://www.reneeporsia.com/ Renee Porsia

      Bawldguy.. Really? Last time I checked with all due respect, I was entitled to my opinion and that is what I gave. Benn and Lani are also my friends as well.

      And, I didn’t accuse anyone else of anything. I believe my post was directed to you in response to your post. Dual agency is not ethical anyway you want to slice it or try to pretty it up. It’s motivated by pure greed.

      I said, if you practice it, I’m sure YOU probably were violating some rule, law or being unethical in some way.

    • http://agentgenius.com Benn Rosales

      I’m hoping Renee meant you as in the ‘proverbial you’ and not directly.

      I’ve worked transactions with Jeff (Bawldguy) and can personally vouch for his level of conduct and professionalism on both sides of the transaction, and I’ve also seen Jeff leave money on the table as ultimately his clients are his reputation and no one understands that more than Jeff- he is the model of practicing agent, and forensic expert.

      Having said that, Dual Agency is a contentious subject, and many are truly passionate on both sides of the fence, but for as long as the law allows and guidelines remain in place for the ethical use and practice of dual agency, I think it makes more sense to keep this about the law and not about one another.

      • http://www.reneeporsia.com/ Renee Porsia

        Hey Benn,

        What I meant by my original comment to Bawldguy was that whenever anyone practices dual agency, first off it’s not ethical right off the bat! It’s legal in some states but definitely not ethical just as an attorney can’t represent both sides.

        Most Realtors who do practice dual agency do violate some rule or law by doing something for one side and not the other which is not allowed when entering into a dual agency relationship. Though the Realtor may think that because the deal made it to the table and nothing when “wrong”, you can be certain that one side was hurt in some way and didn’t even realize it and perhaps the Realtor didn’t even realize what they did. Again, you can’t be just a little pregnant.

  • http://www.charlestononlinehomes.com/blogs/howard_arnoff/default.aspx HowardArnoff

    I think that the BawlGuys and Russell Shaws of the world can do whatever they darn well want to, it’s the incompetents and unethicals who shouldn’t be practicing real estate let alone doing dual agency that is the real problem.

  • http://www.move2pennsylvania.com Erica Ramus

    Incompetents/unethicals are problems when they have 1 side of the transaction. When they have 2 sides, they are 4x the problem. We should work on weeding THOSE GUYS out of the business before you accuse competent professionals of something that is NOT illegal in many states.

    I try to avoid it but I do practice dual agency when I must. When “must” I?

    Last month a buyer called in off one of my signs. I am broker at a small agency. I tried to refer him to another agent, who would show him the property. Not a single agent was available to take his appointment. I called every one in my office and not one could do it at his desired timeframe. The buyer was agitated by this. I explained I was the listing agent and trying to find him someone to work with him as a buyer’s agent. He replied “Just show me the place yourself.” I explained dual agency and he didn’t care.

    I rearranged my schedule, met him at the place, and he wanted to make an offer. I again explained I was a dual agent. He didn’t care. I took his offer, and presented it to the sellers. They didn’t care I was a dual agent. They just wanted an offer!

    In the end, he didn’t get the house. But this is how dual agency can happen, even when your personal policy is to refer buyers out.

  • http://blog.mdsuburbanhomes.com Ken Montville

    I have to side with John K. (above). I rarely do two ended deals but when I do it’s as the Seller’s agent and I make clear, in writing, that I am the Seller’s agent to any *unrepresented* buyer that tells me they don’t want to use a Realtor/buyer’s agent.

    I open doors, I silently allow access to the home for inspections, I present the Seller with buyer requests, in writing. I notify the *unrepresented buyer* with Seller responses and so on.

    Speaking of money, many times the *unrepresented buyer* will approach me specifically because they want/desire “a good deal” by my re-configuring the commission I negotiated with the Seller.

    I’m also a Marylander like Jonathan B. (above) and I am always the Seller’s agent when I take a listing. The Seller also can opt out of any Dual Agency at any time if another agent from the same brokerage gets involved.. I never had that happen, though. Usually, the Seller wants to sell the house and be done with it.

  • http://www.LiquidBlueRealty.com John Kalinowski

    @Renee – Just like you, this is only my opinion, but you are completely off your rocker with the accusations you’re throwing at Jeff, aka BawldGuy. How can you judge his work or the quality of his representation unless you’ve had first-hand experience working with him or his clients?

    If you practice dual agency the right way, it is entirely ethical and effective for all parties involved. You’ve either had a bad experience (or no experience), or just don’t know what you’re talking about. I’d rather be a buyer or seller in a dual agency transaction with Jeff than a transaction where you are representing one of the clients any day. Particularly if it’s common for you to jump to this sort of non-supported accusation in other situations. I can’t imagine what agents go through on the other side of your deals!

    • http://www.reneeporsia.com/ Renee Porsia

      John,

      Aren’t you doing exactly what you just accused me of doing to Mr. Bawldguy when you said “I’d rather be a buyer or seller in a dual agency transaction with Jeff than a transaction where you are representing one of the clients any day.” You do not know me but yet here you stand passing judgment on me for simply giving my opinion.

      I write about dual agency all the time and the reason I feel the way that I do is because dual agency only hurts consumers and the only person who wins is the Realtor and we as Realtors are supposed to only have the consumer’s best interests at heart not our own and if those Realtors who practice dual agency did have only the consumer’s best interest at heart, would only want to represent one side and the key word being “represent.” When acting as a dual agent, the Realtor can not do anything for either side. All they can do is get the offer and bring it to the seller. They can’t advise, consult or negotiate in any way shape or form.

  • http://www.realty4atlanta.com Dan Connolly

    Patrick,
    You might think it’s only the lure of more money that brings the agents into dual agency but I will assure you that it’s not the case. I know most people really do think that the average agent is only motivated by money and ethics always takes a back seat to profit, but in my case it is really not true. In a number of the dual agency transactions I have gotten exactly what I would have gotten if the buyer’s agent had been present. I actually want to sell my client’s house! Imagine that! When you take off half the commission, a lot of the negotiation and repair problems can be solved. Naturally I might try to reduce not all the way to 50% but it’s always a possibility and is something I will gladly do if it gets the job done. But I suppose I am not average. But I would bet that when you look at agents who have been around for a long time and who are ethical, you will find that it’s not about the money. I had a client last year who wanted a house under 50K and I worked with her for 6 months, made 10 offers, got several under contract that had inspections that failed, looked at about a hundred properties and I knew all the way through that the commission would be less than $1500. I spent more than that on gas. Would I do it again? Absolutely!

    Renee, you are entitled to think what you want about whatever you want. A lot of what you state as fact is only your opinion. As long as you disclose fully to both parties, you can do whatever your clients agree with, legally and ethically. Generally the reason dual agency works is because you can give up a substantial portion of the commission to help both parties get what they want. By insisting on bringing another agent into the deal you are costing your Seller more money. How can that be ethical? Somehow I think you are barricaded in your ideas and are not open to even thinking about the opposing view. I read a great statement on Twitter where someone pointed out whenever someone says “with all due respect” you can be sure no respect will follow. Most of the dual agency deals I have been in my commission ranges between 50-60% of what the property is listed for. It is not motivated by greed, it is a sincere desire to get the job done.

    • http://www.reneeporsia.com/ Renee Porsia

      Hi Dan,

      This is not my opinion, this is fact.. if a Realtor is a dual agent, the agent can not negotiate for either side, they can’t provide comps for the buyer, they can’t do anything accept get the offer from the buyer and present it to the seller.

      When you were a dual agent, did you negotiate for the buyer or the seller or provide comps or advise?

      • http://www.realty4atlanta.com Dan Connolly

        Renee I am confused. What do you mean by negotiate for the buyer or seller?

        I have never negotiated for the buyer even when I only represent the buyer. I present my buyer’s offer to the seller. When we have a low offer I tell the Buyer what my Seller will accept. The buyer and seller make up their own minds. They both get all the comps. If you think that is unethical, I really don’t understand your definition of ethics.

        I can give the buyer comps if my seller agrees to it! These days the property has to appraise. If I have it listed there are comps to support the value. Of course my seller wants me to share them with the buyer! Why wouldn’t they? We aren’t tricking the buyer into anything or hiding comps from anyone!

        • http://www.realty4atlanta.com Dan Connolly

          BTW, where do you get your “facts”? Agency is regulated by the states and it varies in different states. Are you talking about Florida law?

          • http://www.reneeporsia.com/ Renee Porsia

            Dan,

            Are you talking about Pennsylvania law?

            I think dual agency should be illegal in every state and I will keep telling every consumer I come across to stay away from dual agency.

        • http://www.reneeporsia.com/ Renee Porsia

          Dan,

          Pardon me while I laugh profusely at your response. You do realize what you just wrote proves my point to the nth degree right?

          If you do not negotiate for your own buyer, what do they need you for then? What good are you to them then? If a buyer agent doesn’t negotiate for their own buyer, how are you representing their best interest. It’s your fiduciary duty to negotiate for your own buyer and represent them and protect them. Just because they put a low offer in and the seller doesn’t want it, too bad.

          What do you do after they buyer has a home inspection then and the home is in need of major repair? Do you just tell your buyer that the seller said no and thats it?

          If that is what you do for your “own” client in a single representation situation, I can only imagine what you do in a dual situation then.

          I am sorry but what you just wrote is one for the books and is in my opinion, let me say that again.. in my opinion is what is wrong with the entire real estate profession.

          What do you do to attract buyers then? Do you ask buyers to let you represent them and also tell them that you will not be negotiating for them? Those are your words, not mine.

          Your words “I have never negotiated for the buyer even when I only represent the buyer. I present my buyer’s offer to the seller. When we have a low offer I tell the Buyer what my Seller will accept.”

          And people wonder why I am against dual agency. Thank you for proving my point for me.

          • http://www.realty4atlanta.com Dan Connolly

            Negotiate FOR your buyer? Please explain what that even means? As a buyer’s agent, I discuss value with my buyer and tell them what I think it is worth. If they want to pay market value, or if they want to try to get it for 80% of market value (that being with comps in the last 3 months) then I present what they want to pay to the listing agent.

            I don’t negotiate FOR anyone. I present what they are willing to do, to the listing agent!. If the listing agent says “do you think they will pay $5000 more” I don’t negotiate FOR them (and say “no way” or “maybe”), I simply go back to the buyers and I tell them what the response is and see what they want to do. If you are negotiating FOR your buyer you need to take another ethics class. If you are ethical you are negotiating WITH your buyer! They don’t hire you to think for them or to negotiate FOR them!

            What do YOU do if there are a bunch of repairs on the inspection list and the Seller refuses to do them? What kind of negotiating do you do, FOR your buyer, to turn that around? At the end of the day with you in their corner they don’t get the house anyway! In many cases in the dual agent capacity I can reduce the commission by enough so the seller can afford to do the repairs to the buyer’s satisfaction.

            Laugh all you want! You ask a lot of questions that I could answer but I don’t really think you are open to any opinions but your own. I am still interested in where you are getting your rules from!

        • http://www.charlestononlinehomes.com/blogs/howard_arnoff/default.aspx HowardArnoff

          And Dan, you said (sarcasm ahead) with enthusiasm, “I can give the buyer comps if my seller agrees to it!”

          Enough said. The buyer deserves comps to base an offer.

          • http://blog.mdsuburbanhomes.com Ken Montville

            Hell, forget providing comps. Just tell ‘em to look at Zillow or Trulia or Cyberhomes or our own dear Realtor.com. They can work for themselves if they’re *unrepresented* or, if my client (the Seller) agrees or instructs me to provide comps, I will. The bottom line is what my client (the Seller) agrees to accept.

            Just out of curiosity, does this work if I happen to represent the buyer who wishes to purchase a FSBO? (not asking for legal opinions or Broker advice. I know where to go to get that.)

  • http://www.charlestononlinehomes.com/blogs/howard_arnoff/default.aspx HowardArnoff

    If I can step in here for a moment and talk real life. In my opinion, Renee is absolutely on target. I represented a buyer, the list price was absurd, we made a low (but realistic) offer, the seller barely countered. I explained to the listing agent that there was no way the property was worth that price (and why) and our offer would hold until my buyer found something else.

    Guess what, we got the counter at our price. And it was then to be an “as is” sale until the inspection revealed damage that actually wasn’t fixed when the seller originally purchased the home so we got that fixed at the sellers expense.

    Dan, do you *really* believe that deal would have gotten done in dual agency (or would you rather just have buyers agents eliminated from real estate and let the buyers basically fend for themselves.

  • http://www.yankeenewengland.com Dan Toman

    I’ve got to jump in here one more time!
    What kind of an agent are you? I’m positioned as a listing agent. (You should be to!). There’s a wonderful thing that happens when you’re positioned as a listing agent. People call you who are interested in buying your listing. It’s a trend that is growing that consumers want to talk directly to the listing agent.
    So here you are. You have spent your time, your resources, and yes your money to attract buyers to your listing. Of course you’re going to sell them the property.
    Here (in Connecticut) where dual agency is allowed – I fully explain to the seller at the time of listing that dual agency may occur, and explain their options to them. Then, when a buyer approaches me about the property, I repeat the process. At that point, if all parties agree, we sign a dual agency consent agreement and we move forward.
    Never once have I had a seller complain that I was earning “two commissions” because I’m not. Anyone smart enough to own a 400K house, knows what 5% of 400K is, and they’re happy to pay it, and several have explicitly stated to me that they are pleased that I earned the entire commission.
    Lastly, when I act as a dual agent – all I did was what I said I was going to do when the listing contract was signed. I sold their house! It’s not a philosophical debate, it’s a business transaction. I encourage any newer agents who work in a state where dual agency is allowed – to not seek the help of Socrates or to find some other higher plateau of zen to seek their answers – they should become a listing agent, sell their own listings and be the best damn agent they can possible be. Two years ago, I sold 70% of my listings personally – primarily because of buyers contacting me directly, and the other obvious fact that I know the house better than anyone else.
    Trust me, It’s a great way to build your reputation as an agent that gets things done.

  • http://Cognabooks.com Ray Wilson

    Just discovered AG, saw this fracas — and can’t decide where to jump in. As a man, I am kind of embarrassed to see so many men being beaten up by a girl. It does look like Renee has beaten you so senseless that you don’t realize it.

    I winced when I saw the term “age old” used to describe the dual agency debate. No it ain’t! That would make me older than “age old” since I remember when there was no debate at all among Realtors that “dual agency” simply isn’t agency. Claiming it’s agency is either an outright fraud or a matter of you youngsters buying into the fraud perpetrated by NAR to sabotage the emergence of legitimate buyer agents in the eighties (and they do not include designated agents).

    ’nuff said. Go put some salve on those wounds.

  • http://www.reneeporsia.com/ Renee Porsia

    This is some great stuff. People keep digging the hole deeper and deeper.

  • http://www.realty4atlanta.com Dan Connolly

    Howard, the short answer is yes! First of all, if it was dual agency with me, the seller would already know that the price was absurd and that he could only expect low offers. If it is priced to high it will only sell to a cash buyer. Appraisals are a factor.

    Many times there are sellers who say “as-is”, and then end up having to pay for some repairs if they want to sell. It isn’t some incredibly clever buyer’s agent that convinces them of that, it is the reality that today, most buyers will insist on that in this market! If the seller is upside down, or doesn’t have the money for the repairs and says “take it or leave it, I borrowed too much and this is all I can sell it for”, then the buyer has to take it or find another house. Nobody is leaving the buyer to fend for themselves. My point is in some of these situations, I can effectively pay for the repairs! Not in all of them!

    I never try to eliminate buyer’s agents, but it really isn’t in my seller’s or the buyer’s best interest to bring one in a lot of cases.

    Renee, PLEASE tell me where you get your facts? Surely you must have some laws you can point to since you seem so convinced that you are right.

    • http://www.charlestononlinehomes.com/blogs/howard_arnoff/default.aspx HowardArnoff

      But the listing agent couldn’t convince the seller the list price was absurd until our offer. And we held our ground and we got our price. The seller was upside down (but could and did bring money to closing) and thus the reason for an “as is” sale, a short sale price without the headaches. We didn’t bother with the minor repairs but one was an issue, basically the previous repair of a problem disclosed by the seller was not done correctly.

      As to counting on an appraisal to determine the selling price, this sale didn’t require one (significant down payment, quick automated appraisal) so I wouldn’t think buying at “appraised value” would have helped my buyer as much as hardball negotiation and representation of the buyers interests.

      And my last take on the subject is quite simply to quote you, “but it really isn’t in my seller’s or the buyer’s best interest to bring one (buyers agent) in a lot of cases”. Dan, it might not be in the sellers best interests but you can bet it would be in the buyers best interests.

  • http://www.sueadler.com Sue Adler

    Love this controversial topic! When you’re a strong lister and have good web presence, no doubt, you get alot of your own buyers coming in on your listings. A couple of years ago, after selling my own listing to my own buyer and impossible inspection negotiations because no one felt represented, I decided I’m so done with this dual agency thing. I’m uncomfortable wearing two hats because I need to be an advocate for my client,. Whether right or wrong, the way we get around this now, since I have a team, is that my buyer specialists represent the buyer and I will represent the seller and even though legally it’s still dual agency, everyone has their own advocate. And if there are multiple offers on one of my listings, and one of the offers is from one of my buyer specialists, we even go so far as to have my broker sit with the seller so that the other agents are comfortable that their offer is being presented fairly. From my experience, ( about 7-10 team dual agency sales a year ) as long as all parities feel represented and feel treated fairly, dual agency does work, as long as it’s not the same person representing both sides. In NJ, both buyers and sellers also have lawyers representing them, so that’s probably another reason why everyone feels represented even more so.

    • http://westchesterrealestateblog.net J Philip Faranda

      Good response Sue. Buyer and seller are represented by lawyers in NY also, so advocacy ought not be an issue here either. NY also allows a designated agent within the brokerage so each side has their guy, and while it isn’t “pure,” nothing is these days.

  • http://www.reneeporsia.com/ Renee Porsia

    Dan,

    To answer your question about what would I do for my buyer if after the inspection it revealed things that needed to be done and the seller didn’t want to make them. Well, since I do not represent the seller, I do not care what the seller wants to do or doesn’t want to do in this case. I go back to my buyer and make sure they understand what is a major defect and explain to them that the seller has declined to make the necessary repairs. I also speak with the seller’s agent and explain that even if the seller doesn’t want to make the repairs for my buyers, they (the sellers) will still need to live in the home should my buyers walk and they will have to make the repairs for themselves (and disclose everything to the next buyer) just to be safe and with that said, the sellers will always give in and make the repairs and then I go back and tell my buyers that I due to my great negotiating skills, I was able to get the sellers to make the necessary repairs for them.

    Thats what I do for my buyers Dan. It’s called Buyer Agency. It’s called looking out for my client’s best interests. It’s my job!

    • http://www.realty4atlanta.com Dan Connolly

      Guess what Renee. If I am just a listing agent I explain all of that to my Seller before the Buyer and their incredibly intelligent agent ever shows up! We already know what repairs are necessary and that if unknowns show up they will have to disclose them to any other buyer. That isn’t brilliant negotiating that is common sense, that is discussed in detail before we sign the listing agreement.

      • http://www.reneeporsia.com/ Renee Porsia

        Guess what Dan… we will just have to agree to disagree. What I will say though is that any Realtor who doesn’t negotiate for their own client goes against everything I was ever taught and everything that I stand for.

  • http://www.move2pennsylvania.com ericaramus

    Well to solve the overpriced listing that you have to present a lowball offer on… how about pricing it right to start? Not using buyer’s offers to convince the seller to get realistic?

    • http://www.reneeporsia.com/ Renee Porsia

      Ericaramus,

      You said it before I could post it! LOL!

  • http://www.charlestononlinehomes.com/blogs/howard_arnoff/default.aspx HowardArnoff

    @Ken M, as to providing comps, if they’re unrepresented, it isn’t dual agency, you are representing your client, the seller.

  • HalBenz

    Whoo Doggie!

    I stepped out to watch the Olympics and a hockey game broke out right here on AG!!

    Even though I’m no big fan of dual agency, I know that good and ethical agents can do a decent job. As a former marriage and family therapist, I know first hand that when you come from a place of service, you can mediate terrific outcomes with what might otherwise be adversarial parties. And in the best situations, it never gets adversarial at all. But sill…

    I think part of my discomfort comes from the term “exclusive agency”…which is what I am in NJ when I represent a seller (there are other forms of agency, but I practice exclusive agency). If I get someone to trust me enough to contract me as their exclusive representative, then I feel I owe it to then to maintain an “exclusive” relationship…and not represent other parties in the transaction. I DO need to check some of my fiduciary responsibilities at the door (namely FULL disclosure) when I represent both parties. And technically, in NJ, the same holds true if anyone from my firm is representing the other party.

    I think that we need a modified rule here in NJ…as other states have done.

  • http://Cognabooks.com Ray Wilson

    Dan — It is interesting that you ask Renee where she gets her facts and then re-phrase that as coming down to laws she should be able to quote. Lemme ‘splain — the “law of agency” is really like the “law of gravity” — an irrefutable operational dynamic long before it evolved into an unavoidable axiom of the Common Law predating recent (not “age-old”) and corrupt cartel-serving real estate statutes. Ya can’t serve two masters. Now, you can broker a deal between two parties who are not clients and therefore you are not an agent. If you make one or both think he/she is a client and that you are an “agent” dual or otherwise — you just are not telling the truth. Understand this too — “agency” is not a real estate concept. It is way bigger than real estate and people go to jail in other business sectors for making the kind of representations dual agents make in real estate following laws written by lawmakers bought and paid for with RE PAC money. I wrote a whole book on it and many articles — all easy to google. Need a “modified rule”? Yeah, watching the Olympics I saw a couple of crashing downhill skiers wishing someone would modify the rule of gravity for them.

  • http://www.realty4atlanta.com Dan Connolly

    Renee et all, We’ll never agree. That’s fine. Like I said in my first post, I normally don’t enter these discussions because it seems like an impossibly futile task to convince anyone who is opposed to dual agency.

    If you really believe that if a buyer approaches you and wants to buy your listing, and you can’t represent both parties honestly and fairly then don’t! If you want to send them to another agent and thereby require that the seller pay full commission, and you think that is fair to your seller (try asking them about that), then go ahead! It doesn’t make sense to me, but I am sure you could care less about that.

    To me, I am suspicious that the primary motive for most who don’t do it it, is not to protect the seller or the buyer, but to protect the agent from lawsuit. Not a bad reason, and I don’t blame anyone who takes it.

    The reason I do it is because I think it can be in the best interest of the buyer and the seller.

    • http://www.reneeporsia.com/ Renee Porsia

      Dan, I just had to say in response to your comment

      “If you really believe that if a buyer approaches you and wants to buy your listing, and you can’t represent both parties honestly and fairly then don’t!”

      Once again, you miss the point. You see, nobody can “represent” both parties in a dual agency relationship because we are not allowed to “represent” anyone in a dual agency relationship and the fact that you wrote that sentence, proves that you have no clue what dual agency is or how to even practice it!

      And I don’t even understand where it came from: ” If you want to send them to another agent and thereby require that the seller pay full commission, and you think that is fair to your seller (try asking them about that), then go ahead! It doesn’t make sense to me, but I am sure you could care less about that.”

      But… when a listing agent takes a listing the seller decides how much they want to pay in commission fees right off the bat so the fee is set. Since I do not practice dual agency, the seller is agreeing from the beginning to pay a buyer’s agent. So, if the seller agrees to list the home with me and agrees to pay 5% lets say, then they understand that 2.5% will go to my broker, their listing agent and 2.5% will go to a broker for the buyer, a buyer agent… Answering your question.. “and you think that is fair to your seller?” Fair has nothing to do with anything. It’s a seller agreeing to pay two separate agents for doing their jobs respectively! What doesn’t make sense is your sentence.

      I do feel sorry for so many buyers and sellers in the world! PATHETIC!

  • http://Cognabooks.com Ray Wilson

    Dan C — There is nothing wrong with “over the counter sales” with a sales agent representing the seller and selling to a CUSTOMER! Just do not call the customer a client, to make them think you are their agent and not the sellers. Seller and buyer have “adverse” interests by definition. Look the word up. It is not rocket science and it is not agency. Now about forcing anyone to pay full commission — what is “full”? Is it predetermined? Have you decide what the buyer should be — must be paying his agent? Sellers “pay” buyer agent commissions because that is a gambit of the seller trade association (NAR) forced on buyer agents as a blatant restraint on the buyer agent trade. No reason why buyers can’t include their agents payment in the purchase price without it ever going through the seller or seller agent hands. Trouble is, when that happens, most seller agents still pay themselves the whole commission out of their client’s pocket.

  • Pingback: Random Thoughts on Dual Agency | Notorious R.O.B. - Conversations on Marketing, Technology, Real Estate

  • http://westchesterrealestateblog.net J Philip Faranda

    Oh, how I love to see those against Dual Agency wag their moral fingers. Because that’s the only argument against it. Theoretical morality. I could cross a state line and watch transactional brokers operate without attorneys in the mix and see fewer problems.

    Folks, stop presupposing that real estate transactions are adversarial in nature, with two opposing sides hiding deep dark secrets which, if revealed, would blow the transaction wide open. You don’t need advocacy to buy a house, you need a mortgage. Can we fix that part of the industry first?

    This isn’t litigation and I wish real estate licensees would stop acting like they are lawyers, parsing the law and prosthelytizing the rest of us about how to go about earning an honest living. It is settled law, like Roe V Wade and the tax exempt status of churches, so if you dislike it, don’t practice it.

    I don’t think I’ve been a dual agent since the 90′s because the times I sold my own listing I made it clear to the buyer that I worked for the seller. Full disclosure and informed consent. However, if I ever do have 2 clients in one deal I have the right to handle it the way I choose without the anti dual agency evangelists screaming that I’ll go blind or get hair on my palms.

  • http://www.rerockstar.com Matt Stigliano

    Here in Texas we “don’t” have dual agency – we have intermediary. Call it what you like, it’s disclosed dual agency at the broker level. We allow for all parties to be informed and notified and if they agree we can be either single agents or two agents in one brokerage and still fall under dual agency. I have no real problem with two agents from one office working on a transaction together, although I do hope they will be cautious and not talk about their clients and the particulars of the transaction in front of each other.

    You might think it’s only the lure of more money that brings the agents into dual agency but I will assure you that it’s not the case.

    I think this because it’s what I hear agents talk about when “double siding a listing.” It may not be the case with you, but when I hear agents locally, that’s what I hear. Can you blame me? I’m sure there are people out there who perform dual agency wonderfully and I mean no harm to people like Dan or Jeff, but to me it just doesn’t make sense.

    While Dan and Renee’s comments went back and forth I noticed there was a trend to talk about negotiations. I do not negotiate for the client, but I do provide them with insight, thoughts, and opinions during the process – something I couldn’t ethically or legally do in a dual agency relationship. During negotiations I lay out the scenarios for the client, ask them questions about how they might react as the other party, and before you know it, they’ve come to a conclusion. It’s not about me telling them what price to move to and saying “this is what you should counter at.”

    As for Dan’s first comment about transactions being “adversarial,” I don’t see any transaction as adversarial other than those of clients who for some reason or another have it in them to start things off on the wrong foot with the other party. It’s not about getting one over on the seller, but much like he said, finding both parties acceptable positions. If a house is listed at (and let’s say appraised at) $150,000 and the seller is mentally prepared to take $145,000 for it (because of their situation, whatever it may be) and the buyer is more than happy to pay $149,000 for it – which is better if you were the buyer’s agent: watching them buy the house for $149,000 or watching them buy the house for $145,000?

    We always want the best for our clients, so we would want our buyer to pay less ($145,000) – why is that adversarial? There is nothing wrong with paying less. If the buyer wanted the house so bad and a bidding war was going on, would it not be their decision (and right) to move their price up (and removing the current appraisal value and saying it was appraised at $155,000) to a higher number to get what they want.

    The argument about incompetence will get the dual agency discussion nowhere if you ask me, because the flip side will always be that those people are still incompetent – dual agent or not.

    It’s not or me, that much I’m sure of. Disclosure and legality aside, I wouldn’t feel comfortable with it. I wouldn’t feel like I was doing what I set out to do in real estate. I would feel like someone would not get the best service possible. I would feel as if I was doing it for nothing more than greed.

    Perhaps someday I’ll see a clear cut case of dual agency that will change my mind and show me what I didn’t think of or consider before, but until then I have my thoughts on it and I’m stickin’ to ‘em.

  • http://www.rerockstar.com Matt Stigliano

    After all that, I forgot to welcome Patrick to AgentGenius.

    See, I told you, dual agency is bad.

    Welcome Patrick. Looking forward to the next post – perhaps another hornet’s nest?

  • http://www.rerockstar.com Matt Stigliano

    And for those that don’t practice dual agency, but would refer it out to someone in their office (where this is allowed)…

    Do you think it’s ethical to take a referral fee from that agent? Not “ethical” in terms of the Code of Ethics or even your local law…I’m talking about ethics in the broader sense of what is right and wrong.

    Curious to see how that is considered.

  • http://Cognabooks.com Ray Wilson

    Philip — The word is “adverse” — not adversarial — referring to counterposed interests which cannot be represented from both sides at once. You are right about their being fewer problems in transactional brokerage — for the pros! The customers — not clients — who have to live with the wrong house, or aftermath of the wrong price, and are almost always happy never knowing about a missed better deal — that’s another question. Ah, you quote Roe v. Wade — great example of “adverse interests” — Imagine presupposing that all abortions are adversarial in nature — just because someone has to die to solve another’s problems….
    Only one argument against dual agency, Phillip? That’s the kind of counting used in Roe v. Wade to claim tens of thousands of women dying annually in illegal abortion attempts. Actual count the year before (1972): less than 40, per Center for Disease Control.
    Real estate could use a center for Myth Control.

    • http://www.SanDiegoLifestyle.info Jeffrey Douglass

      Ray, Thank you so much for using the correct word – “adverse” rather than adversarial. One the the saddest arguments for continuing dual agency is the real estate is not an adversarial business – which is correct. It is however, as you so correctly state, a “adverse” business.

      Trying to figure out how to get in contact with your publisher, would love to get a copy of your book.

      Thanks for being a part of the discussion!

      • http://Cognabooks.com Ray Wilson

        Jeffrey,

        Just send your mailing address to Eleanor Proctor — the Business Manager at CognaBooks. You’ll find her email address on the companys DOTcom site. She’ll mail you a freebee.

  • http://blog.mdsuburbanhomes.com Ken Montville

    I also forgot to welcome Patrick to AG. Welcome!

    BTW, there is an implication in the post and some of the comments that being motivated by money is a BAD thing. Hmmmm. Maybe we should get Sellsius in here to make his case for pro bono representation.

    I don’t know for sure but my guess is that the same people who are implying that money as a motivator is a bad thing would be the same ones calling Obama a Socialist and whining about “redistribution of wealth”.

    Almost everyone in the real estate transaction is motivated by money (it’s called commerce) – the buyer wants to pay the least amount, the seller wants to receive the most, the Realtor wants to get paid the max for their services, home inspectors, mortgage officers, title company people, contractors, State and Local Governments all want a piece of the money pie.

    Let’s not get so high falutin’ about the money thing.

    • http://www.rerockstar.com Matt Stigliano

      Ken – Yes money is a motivating factor in business and each transaction carries with it that motivation. I’m not a Realtor because it makes me look cool. I want to earn money and sustain a career, so money is HUGE.

      When I let money take over the transaction and make it core focus is where I begin to have questions. I don’t force a transaction to happen just so I can get paid. Do I worry, fret, and cross my fingers that we’ll go all the way to a successful closing. I’d be lying to pretend I didn’t. In the meantime I do my job and make sure all the pieces I and my client can control are in place and working properly. I also monitor the other agent’s situation to make sure there’s no bumps in the road that I could help out with.

      A successful closing means a check. The money comes when I’m doing my job right, so although it is a motivation, it is not my sole focus.

      • http://www.rerockstar.com Matt Stigliano

        Ken – Just a quick note, that I wanted to be clear…I am not fighting your comment here, but since I mentioned money, I thought I should be respond.

        When I was in the music business the money issue was even bigger with kids calling bands when they finally “made” it. I loved the money of rock and roll, but I had other motivations too. If the band couldn’t pay my bills and earn me a living there was obviously a point I would have to say “no thanks.” I went through many lean times in the band and didn’t do that, because one of my other motivations was passion for what I did. When I quit in October of 2008 that was precisely the reason I left. I had lost the passion for it and felt I was no longer an asset to the band as a whole.

        Money can be a motivated factor, but it does not have to be the core purpose.

  • http://westchesterrealestateblog.net J Philip Faranda

    Ray, There is nothing adverse about people’s interests when they want to do business together- that is a creation of lawmakers. One wants to sell, the other wants to buy. Far more common interests than adverse interests.

    Doctors are Fiduciaries also- does one become adversarial with the specialist they refer a patient to? Of course not. They want the same thing, for the patient to get better. In real estate, everyone wants to do a transaction. More common interests than not.

    • http://www.reneeporsia.com/ Renee Porsia

      Phillip,

      Yes, one wants to sell and the other wants to buy and both want fair representation and the only way they get that is to have their own agent. End of story!

      Your comment about doctors is ridiculous and off point. It would amaze me if people could just stay on point and tell me how one Realtor working for both clients is ethical and acting in good faith. One would like to believe that Realtors who practice dual agency want the same thing for both clients but sadly that is not the case. With a commission of $20k on the line and an issue arrises that could kill the deal, the Realtor’s only focus is how do I make sure this deal goes to the table so I can be paid my $20k.

      I hear it all the time. “I’ve put so much time into this deal, it’s going to happen.” I hear agents telling other agents in the office “the property is listed for $399k but my seller will take $250k.. make it happen..” chuckle, chuckle.. and that goes for single agency and dual agency so being unethical exists on both sides but even more so when the Realtor is a dual agent! Never do I hear, “oh, this is just a bad deal for “my” client, I am going to tell them to walk away!” NEVER, NEVER, NEVER! And you know it..

  • http://www.realty4atlanta.com Dan Connolly

    Renee,
    This will be the last thing I say about this. I respect your conviction of your belief. I understand what you are saying and support your right to say it. However, you keep making statements like:

    “You see, nobody can “represent” both parties in a dual agency relationship because we are not allowed to “represent” anyone in a dual agency relationship and the fact that you wrote that sentence, proves that you have no clue what dual agency is or how to even practice it!”

    In Georgia we are allowed to represent both parties. Plain and simple. Your statement is incorrect in Georgia. Obviously you wish that it wasn’t true, and if they change the law I will stop doing it.

    There are two sides to every discussion and respecting each other is part of the agreement we have here on this blog. We don’t have to use words like “ridiculous” or “pathetic” or “you have no clue”, to make our points. If our points are true they should stand on their own merit. I have realized that we aren’t going to change each other’s minds, so why don’t we just leave it at that.

    • http://www.reneeporsia.com/ Renee Porsia

      Dan,

      Hey, I respect you as well. I am sure you are a great guy in every aspect of your life. This is just a discussion. That being said, I think you are wrong. I know a few Realtors in Georgia and dual agency means the same thing there as it does here in PA.

      I think you simply do not understand what “represent” actually means.

      As a dual agent, you have to still treat both parties, honestly, equally and fairly however, you can not negotiate for either party, provide information to one or the other giving one client an advantage over the other. All you can do is paperwork and mediate. As a dual agent, you are not providing any expertise to either client so they might as well handle the entire transaction themselves and save a few bucks.

      Take negotiating away from a Realtor and what good are we? Though I know that you do not negotiate anyway for your clients no matter what type of relationship you have with them because that is what you have said here.

  • http://www.granthammond.com Grant Hammond

    It is a complete impossibly and a disservice to all involved for any agent or broker to act as a dual agent. How can you aid your now customers in achieving the best possible results when you are no longer allowed to negotiate or advocate for either side? You have reduced yourself to a paper pusher who has no say in the negotiation and put yourself in a situation of extremely liability should some party to the transaction feel wronged. There have been cases where your E & O insurance won’t even cover the damaged because you have willfully out yourself into this situation.

    Thank about the words themselves, dual and agency. Id that even possible. Can you be both faithful and faithful to your spouse? I checked with my wife and that answer is certainly, NO!

    I agree with Patrick, it should be illegal.

    • http://www.reneeporsia.com/ Renee Porsia

      Grant,

      You are exactly right! This is what I am trying to get across. Dual agents are just paper pushers.

      The NAR tells Realtors that we have to always have our client’s best interests at heart yet they come up with dual agency which clearly is not in the client’s best interest at all. When agents partake in dual agency at their own free will, they are playing with fire and risking their license.

  • http://www.SubPhillyHomes.com John Badalamenti, Prudential Fox & Roach

    My attitude regarding Dual Agency is that “little piggies get fed and hogs get slaughtered.”

    Dual Agency is bad business, plain and simple.

  • http://www.SanDiegoLifestyle.info Jeffrey Douglass

    Welcome Patrick,

    A few quick comments.

    You cannot serve two masters.

    The dual agency agenda is more about Brokers and Companies than agents. Most Brokers want to keep both sides of the transaction in-house. That is the big picture and why ‘dual agency” exists. It is about money, not representation.

    In California you can choose to sign buyer or seller non-agency for in those situations that require it.

  • http://Cognabooks.com Ray Wilson

    Philip, you wrote, “Ray, There is nothing adverse about people’s interests when they want to do business together”. Here’s the definition of “adverse interests” from the book, BOUGHT, NOT SOLD:

    “adverse interests: mutually opposing interests where a gain for one interest is necessarily a loss to the other.”

    Maybe you should contact the author of that book and explain the real meaning. OH! I forgot… that would be ME! Thanks for your insight…..

  • http://www.augustarealestateconnection.com Bruce

    Wow, great post and very interesting responses.

    I’m not comfortable representing both parties in a transaction but I’ve seen it done. The seller and buyer were very happy with the results at the end of closing. It was a win-win for all parties concerned.

    There are buyers and sellers out there that definitely know what they are doing. They do their research, know property values and this makes representing them very easy. Dual Agency may not work for everyone, and if it doesn’t, then don’t do it. If it does, more power to you.

  • http://Cognabooks.com Ray Wilson

    Folks, be careful about what you claim or see as measures of performance. Happiness at the close of a transaction means nothing. People almost always are happy at the close of a transaction. Bunco artists specialize in getting victims to happily part with their money. The seller walks away and never rechecks whether the sale price was the best obtainable price, or whether the agent fee was fair or even necessary. The buyer has yet to live in the house, or experience the neighbors…. What’s more, agency responsibilities, promises, deceptions are not limited to the process of “THE transaction”, but begin the moment a buyer or seller begins the walk to the agent’s door or dials his/her phone number. Once more — this whole dual agency debate IS NOT “AGE-OLD”. It all evolved after the FTC 1983 Report on the Residential Real Estate Industry led to the evolution of legitimate buyer agency. Prior to that, dual agency had long been condemned by NAR officially and by all agents universally. When listing agents then started losing business to these new upstart buyer agents, they and NAR suddenly changed positions and poured PAC money into the campaigns of friendly lawmakers, and in 1997, outright bought a buyer agent training certification peddler — REBAC — and with it, REBAC’s history in the buyer agency business which NAR NEVER HAD. Folk’s the truth is in my book, and the FTC Investigator for that 1983 FTC Report is on the book’s cover as one of its endorsers. This is not a commercial plug for the book which is now a bit dated, though it is still on amazon.com. Any of you who has participated above can have a free copy. Just email me with your address, and I will see that you get one.

  • http://Cognabooks.com Ray Wilson

    About the offer in my last post… My business manager was the first responder to my February 18, 2010 at 10:45 pm post and warns me of the inadvisability of eternally open offers.. Duh…. So, five days, closes at February 23, 2010 at 10:45 pm. Write to her Also, the offer was made specifically to “Any of you who has participated above” with “above” specifically intended as those posters beginning with Fred’s post at February 16, 2010 at 2:57 pm. So, Ellie, how’d I do?

  • http://Cognabooks.com Ray Wilson

    Uh-oh … Looks like the structure here eliminates email addresses, cuz I did include Eleanor Proctors at CognaBooks. She is the contact for any of you at the publisher. My apologies to Agent Genius if I broke any rule … but the proper intention should be obvious.

  • http://www.move2pennsylvania.com ericaramus

    RAY
    I would like to read your book but cannot figure out how to get your email address. It’s not on your website either. Contact me if you can. My email is eramus AT comcast DOT net.

    Let’s see if that format works!

    I teach real estate licensing classes at Penn State and this whole discussion tends to boggle the minds of new students.

    • http://www.SanDiegoLifestyle.info Jeffrey Douglass

      ericaramus,

      Would you please expand on your students reaction? From your previous comments you suggest dual agency can be done by an ethical agent and just wanted to know if that is what you are teaching new students at Penn State?

      • http://www.move2pennsylvania.com ericaramus

        I teach pre-licensing, so I teach what is needed to pass the PA state exam. Thus, I teach that DISCLOSED dual agency is legal in the state of PA. I also insert in my classes real-life examples and discussions of what it is really like to be an agent.

        So, I do some role playing and give examples of how dual agency can be good (when it is NOT adversarial/problematic) and when it can be very very bad (when the agent is motivated by greed or breaks the laws of agency by favoring one party).

        I ask them their opinions of what THEY would do if faced with certain situations. Many times people in the class have bought / sold…sometimes as investors, sometimes their own homes.

        In my own practice, I avoid it. I work with sellers and refer to buyer’s agents in the office buyers, and YES I KNOW the office is still under DA in that case. But I separate the 2 parties as often as I can.

        I have done it, on occasion. I am extremely careful to document everything in those cases, and to repeat over & over to each party what the “rules” of the game are.

  • Will Kelly

    Real Estate is not war and until our industry gets that through their stinking head then we will continue a decline in professionalism and customer satisfaction. Did I really just type that?

    Ethics? While trying to stay on point, I think it is unethical for someone to use “Barbra Corcoran” as a tag on their blog in order to get better search engine results. Barbra was a pioneer and has earned her reputation and you try and steal some of that reputation under the auspices of SEO. Shame on you. You see when someone says “I am ethical” or “I’m a great negotiator” red flags go off in my head. Ethical people don’t have to talk or write about it. They just are.

    My father always said that “lying takes work. If you don’t lie, you’ll never have to remember what you said!” It took me years to understand this and to get it right but it wasn’t easy.

    Our industry is certainly divided on this issue as are state laws. However this doesn’t mean someone can’t operate ethically and represent both sides. And yes I do understand the meaning of represent.

    I like to keep things simple. Let’s look at the PA Consumer Notice. It must be presented in the beginning. When you meet the buyer. Not when they want to write a contract.

    (This is taken directly from the PA Consumer Notice)

    Dual Agency:
    Dual agency is a relationship where the licensee acts as the agent for both the seller/landlord and the buyer/tenant in the same transaction with the written consent of all parties. Dual agents owe the additional duties of:
    -Taking no action that is adverse or detrimental to either party’s interest in the transaction.
    -Unless otherwise agreed to in writing, making a continous and good faith effort to find a buyer for the property and a property for the buyer, unless either are subject to an existing contract.
    -Confidentiality, exept that a licensee is required to disclose known material defects about the property.

    Does anything say fraud? Is it impossible to perform these duties and still be ethical? In my opinion I think you can fulfill these duties with a benefit to both parties. It’s just my opinion. Here’s a thought. If you don’t like dual don’t practice it but don’t consider yourself a legal expert or an expert on ethics and cast aspersions at those that do practice it. You are doing a disservice to yourself and this industry by being a blowhard.

    Negotiating comments are fraudulent as well. Sorry folks we don’t negotiate. We are just the conduit of information between parties. We can advise our clients on how to negotiate. Our clients can give us the power to negotiate and this is completely different. We can try and present alternatives to clients but we cannot negotiate unless we are in the position to make the decision. If they give us this right then we can negotiate. Being convincing or counseling another agent on what to say to their client is not negotiating. It’s what a good agent does but it is not negotiating.

    In the bubble of real estate we have a tendency to look at worst case scenarios. What if a buyer sees a listing that they love? They always wanted a certain type of house in a certain type of neighborhood. The home has no flaws and passes a home inspection with zero issues. The price is right. Why wouldn’t dual work? What negotiating needs to be done? Take out one of the egos and it could certainly go a lot smoother.

    What if the listing agent gives a discount to the sellers’? A reduced commission if they take both sides of a deal? Does this eliminates the ethical money issue?

    Here is my suggestion. If the market is going to take us seriously then we need to operate in a manner that is professional. Any post that goes after someone personally to make a point isn’t professional. I know I posted about the Barbara Corcran thing but that agent has the right to remove those tags and mend his/her errant ways. We are entitled to an opinion. We should use it to the best of our ability.

    For all that is wrong with our industry there is a ton that is right. Helping people fulfill their dreams of home ownership or helping those families in trouble get out of trouble is a valuable proposition and makes us significant.

    Dual agency is a part of my presentations. Both Listing and buyers. It is a part of it because it is my duty to educate them on exactly what it is and how it can help or hurt them.

    What if you had a listing that was perfect for your best friend or family member? Are you telling me the client would be better served if you introduced a 4th party into the transaction?

    In closing there is a time and place where dual can benefit a transaction. However it takes an agent that understands ethics, human nature, real estate and civics. If you find yourself troubled by it then just refer the client out and take a fee. Where I grew up they call that double dipping and that could get you thrown out of a party.

    Let the flaming begin.

  • http://wesleybehan.com Wesley Behan

    I agree with many of the statements in this article.

    I do however think that dual agency will continue to exist, simply so that sales representatives are able to conduct transactions with other Realtors within their same office under the same banner. There has to be a dual agency agreement in place to allow this and if an agent has 100 some odd sales representatives in their office (usually all working similar neighborhoods), there’s no way you can tell them that they aren’t separately able to represent parties in a transaction.

    Now… ONE sales representative representing two parties. That’s a whole other story:)

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  • http://www.buyersedgerealty.com Gary Herbst

    Dual agency is non-agency, and should not be permitted in any state. It is self-serving and contradicts the very meaning and essence of a true agent and agency relationship- to place the interests and goals of the client above the agent’s (“company”) and anyone else in the transaction at all times. Dual agency exists to double the income and benefit the listing company by keeping an in-house transaction in-house, where the best interests of the real estate company are now represented and protected instead of the buyer and seller. It is the ultimate ‘bait and switch’. The National Association of Realtors, prior to the advent of buyer agency, said that dual agency is a legal and ethical grey area that should be avoided. Attorneys receive much more training in conflict resolution than real estate agents, and most avoid dual representation of both parties with adverse interests in the same firm. (Note- adverse in real estate means “opposite” and does not have the same meaning as “adversarial”. Most real estate transactions are not adversarial, but buyers and sellers have adverse interests. The seller wants to sell at the highest possible price at the best terms, and the buyer wants to purchase at the lowest possible price at the best terms). In fact, many attorneys in conversation over the years have told me that they consider this to be an illegal practice in law. Only when the real estate industry recognizes that dual agency is limiting our industry perception to the general public as a self-serving vocation, and not as a true profession, is when the public will recognize and demand our specialized services as true and valued professionals providing 100% representation and advocacy 100% of the time with undivided loyalty and full disclosure.

    What do I mean by this? By having principal brokers, agents, and companies that are only either licensed as Exclusive Sellers’ Agencies, or as Exclusive Buyers’ Agencies, with specialized courses and training geared for each type of agent, and state licensing to reflect this. In this way the general public will recognize the worth of the real estate industry and agents as a true profession, not a self-serving vocation, and create future demand for our specialized services in protecting their best interests throughout the entire transaction.

    Eliminate the possibility of dual agency and the conflicts and limitations of divided loyalty with limited fiduciary duties and obligations. How about starting a movement in your state with your state and local Realtor associations advocating for the removal of dual agency? In the world of computers and the Internet, more people are taking advantage of these tools for both home sale and purchase, and are attempting to bypass the real estate agent whenever possible.

    Specializing in this way will make our services as true professionals considerably more valuable to the real property consumer, whether a prospective buyer or seller during the purchase or sale of their most costly and valuable asset in a competitive and changing market environment.

  • http://Cognabooks.com Ray Wilson

    Will Kelley showed us this excerpt from the Pennsylvania Consumer notice:

    “Dual agency is a relationship where the licensee acts as the agent for both the seller/landlord and the buyer/tenant in the same transaction with the written consent of all parties. Dual agents owe the additional duties of:
    -Taking no action that is adverse or detrimental to either
    party’s interest in the transaction.
    -Unless otherwise agreed to in writing, making a continous and
    good faith effort to find a buyer for the property and a property
    for the buyer,,,,
    -Confidentiality, exept that a licensee is required to disclose
    known material defects about the property.”

    What a pathetic self-serving embarrassment by pawns of the real estate sales establishment (I almost wrote “profession” but that would imply a professional grasp of the terms “adverse”, “good faith”, and “confidentiality.”
    – The word “adverse” (again, not “adversarial”) in agency
    dynamics refers not to the actions of the so-called “agent”,
    but to the interests of the principals. Not only action, but
    INaction to avoid being detrimental to one side in an adverse
    interest will in fact be detrimental to that interest on the
    other side. Period. Period! Freakin’ PERIOD!
    – “Good faith” means keeping promises — and sellers list
    because they believe the at least implied promise that
    your WHOLE OFFICE will work to bring the buyer with
    the highest price before he spends it on some other house.
    How do you keep that promise while keeping the promise
    to get your buyer the best living for his family for the least
    money?
    – “Confidentiality” requires you to present a lowball offer to
    your seller without revealing “your” buyers readiness to
    accept a higher price. In the reverse situation, keeping the
    seller’s confidentiality, the consequences can be far worse
    since the buyer actually lives with them..

    Understanding terms requires more than the declaration that you understand them.

  • http://www.move2pennsylvania.com ericaramus

    RAY–Did you see my message above? Would love to read your book…

  • http://Cognabooks.com Ray Wilson

    The email address of the business manager of CognaBooks DOTcom, Eleanor Proctor is now a link on the website. The site is being restructured and “little things” like that fell behind.

  • http://www.move2pennsylvania.com ericaramus

    RAY–got you. Thanks. I look forward to reading the book. This dialog is fascinating.

    You can find me at the email above, website move2pennsylvania dot com

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  • http://www.pangeare.com Josh

    Interesting post. Dual agents encounter the issue of being unethical. Agents provide consumers with a service and to play both sides of the fence is questionable at best. Not only is it unethical but it cost someone there job and more. Thank you for posting this. Great information. I wasn’t aware it was allowed at all.

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  • http://www.NoDualAgent.com David North

    Dual agents offer a different service than I do. That doesn’t make them worse people or worse real estate brokers than me, it only distinguishes the quality of representation offered by them vs. by me. Note that I didn’t say it distinguishes the quality of service offered. A dual agent can offer a very high quality of service, while offering a reduced quality of representation. For some clients, benefits offered by the dual agent in exchange for the lower quality of representation may make for a good tradeoff, provided that the client is fully informed. My high quality service includes high quality representation, and a dual agent may offer high quality service that includes low quality representation, but something else that I cannot or choose not to offer. That’s why capitalism and free markets are wonderful. There are always choices because the same formula doesn’t fit every prospect.

    There are reasons why I am no dual agent, and here are a couple of them. I’ll admit, they’re basically selfish:

    I close more deal sides with clients gained by telling them up front that I am no dual agent under any circumstances, than I walk away from by practicing my no dual agent policy.

    My job satisfaction, and a higher than usual referral rate, come from far exceeding clients’ expectations. I reject the notion that a fair deal is in the middle between what the buyer and seller want. For my clients, a fair deal is one in which my client gets all or very nearly all of what they want, and the counter-party gets enough of what they want to close the deal. It’s not inherently adversarial, but it’s well-negotiated, usually to the advantage of my client. It almost never ends up in the middle, not just in terms of price, but in terms of timelines, risks, and all other terms and conditions. It makes me sleep easy at night, and as a bonus, I get lots of referrals. Dual agents can never average anything other than 50-50 compromises. Any time they do better for one client, they automatically do worse for another client. That is satisfying for some, but not me.

  • ryan

    test. Wondering how this works.

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