Will your real estate agent fight for you when you buy a home? Yesterday I talked with a very savvy buyer. He questioned whether a real estate agent who has a home listed for sale could also act as a buyer’s agent on that same property, in other words, a dual agent representing both the seller and the buyer. The answer in most states, including Washington, is that it is legally acceptable to be a dual agent, provided the necessary disclosures are made in writing. But . . .
This buyer was quite right in feeling that while dual agency is legally acceptable, it is not financially acceptable. His argument is one I have been making for years.
Imagine what a listing agent does for a seller. He or she has worked with a seller for six months to one year to list and market a property, with many many hours of paperwork, planning, writing ads, posting listings, meeting with the seller many times and having phone calls weekly, emailing and talking with prospective buyers, spending numerous hours behind the scenes, encouraging the seller and building an emotional bond, and who has committed his or her best efforts to get the highest possible price from any buyer who does show up.
Now imagine a buyer who drops into town and who calls that listing agent to drive around and look at homes for one afternoon. How can we honestly suggest the agent can fairly represent both the buyer and seller without bias?
The arguments are: it’s legal, all you have to do is comply with the law, there’s nothing wrong with being a dual agent, if you do the full disclosures it’s okay, an agent can be fair and honest and be a dual agent, and so on. All true, but not all buyers are buying it.
Buyers want to be absolutely certain that their agent works for them, and only for them. Buyers want to know that their agent is loyal to them without any potential conflict. Buyers want someone who will fight for them, negotiate for them, and watch out for their best interests in every detail, every contingency, and throughout the process all the way to closing.
Some buyers do not know the dangers of simply calling the listing agent and making an offer through that agent. I strongly recommend buyers retain their own exclusive buyer’s agent. Only then can a buyer be sure he is zealously represented and that someone is working to get the best price and terms possible.
For a real life example of a buyer who got hurt in this kind of scenario, see the Washington Post article, Agents Falling Short on Disclosure. “Stern believed he was induced to sign a contract on a house with an excessive price because the agent he thought represented him as a buyer’s agent was in fact functioning as an agent for the seller.”
“If the agent’s role is to negotiate for you, how can he get the best price on the home if his real duty is to get the highest price for the seller? ” See another excellent article on Joel Stern’s case, Well-kept Secret That Harms Home Buyers, in the International Real Estate Digest.
Last Updated on August 9, 2022 by Chuck Marunde