September 17th, 2017 11:18 AM by Jackie A. Graves, President
You amble into an open house and meet the seller’s agent, who
seems really cool. You want to make an offer, but you don’t have an agent of your
own. So what’s the harm in just working with the seller's
agent? In the real estate biz, one agent representing both the seller and the
buyer is called dual agency.
Although it's legal in some states, many real estate agents—and house hunters,
too—see dual agency as a conflict of interest. Let's dive into why working with
a seller's agent is actually a bit more complicated than it sounds.
dual agent, who will be responsible for executing the transaction for both
the buyer and the seller, is legal in states such as California
and Texas, but be wary before jumping into business with one.
“It can be a fine line for an agent to walk,” says Teri Andrews Murch, a Realtor® with Lyon
Real Estate in Auburn, CA. “As the buyer, you need to be comfortable and trust
you are getting the representation you deserve.”
Whether you're a first-time buyer or a seasoned investor, you
need to be clear on who is truly working for you, says Olgierd Minkiewicz of Triplemint
in New York City.
are, however, some benefits to working with one agent.
first thing that comes to mind is easier communication between the parties,”
says Minkiewicz. Ordinarily, the buyer communicates with the
buyer's agent, who then talks to the seller’s agent, who then talks
to the seller, and vice versa. With just one agent, that chain of
communication gets shorter. So theoretically it speeds things up a bit, and
possibly even cuts down on misunderstandings.
also the potential to save money on the transaction, because commission is not
split between two brokers. This does not mean you should assume the agent will
work for less, Minkiewicz says. Occasionally the agent will reduce the
commission fee by a percentage point or two.
we use an example of a million-dollar property, then that’s 10 or
20 thousand dollars less that the seller needs to pay, which then can be
reduced from the asking price, and the buyer saves a little," Minkiewicz
sure to discuss these details with the agent and have them explicitly written
in your contract before you sign.
biggest issue with dual agency is that having the same person represent
both sides can be seen as an ethical dilemma.
a listing agent has already established a relationship with the seller, they
may want to settle with a higher price," says Minkiewicz.
agent’s role can get a little confusing for the buyer and the seller,” says Lee
Dworshak, a Realtor with Keller Williams LA Harbor Realty
in Rancho Palos Verdes, CA. In a real estate transaction, you need to know your
agent is representing your best interests.
dual agent cannot have an undivided loyalty and cannot provide a full range of
fiduciary duties to both parties,” she says.
about it. The seller wants the highest possible price for the property. The
buyer wants the lowest possible price. There’s an inherent conflict of interest
in a dual agency transaction.
the buyer, you might think you can cut your costs and speed the deal
by working with a dual agent. But if you get a good agent of your own,
that person should be able to negotiate a better deal that outweighs a
reduction in commission, says Minkiewicz.
determined to proceed with the seller's agent? There are a few things you can
do to make sure you leave the transaction satisfied. In the few dual agent
deals Murch has handled, he’s always offered to have his manager or another
agent in the office represent the buyer. That way, the deal is still handled
by the same brokerage, but you’re more likely to have the undivided loyalty of
an individual agent.
agent transactions remain rare for a reason.
find most buyers or sellers feel more comfortable with their own
representation,” says Murch.
if you do work with the seller's agent, Minkiewicz points out that the
agent can't pick sides or give advice.
“And in a transaction that sometimes involves millions of
dollars, having somebody who really has your back, is only in your corner, and
is coaching you when things get bumpy is probably the best thing a buyer can
By Adriana Velez - To view the original article click here