Why would any home buyer agree to dual agency? The quick answer is they wouldn’t.
I just completed one of the many required continuing education courses I must take to maintain my Virginia Real Estate license. After reading through the materials for the class titled, “Residential Standard Agency” and the section about Dual Agency, I thought I should share this right away.
Dual agency is when a real estate licensee has a brokerage relationship with both seller and buyer in the same real estate transaction.
How could this affect you? Let’s say you are just starting to think about buying a home, you find a property online and decide to go see it at an Open House. You walk in and meet the Listing Agent who shows you the home and you decide to write an offer. In Virginia, the listing agent can represent you as a dual agent. Here is what the law says:
If representing one existing client and one new client in a dual agency transaction, the disclosure shall contain the following provisions:
- That following the commencement of dual agency, the licensee cannot advise either party as to the terms to offer or accept in any offer or counteroffer; however, the licensee may have advised one party as to such terms prior to the commencement of dual agency/representation; (Most likely, this means that the listing agent has given the seller some kind of advice before signing with the buyer.)
- That the licensee cannot advise the buyer client as to the suitability of the property, its condition (other than to make any disclosures as required by law of any licensee representing a seller), and cannot advise either party as to what repairs of the property to make or request; (analyzing a property and then advising a buyer about what repairs to ask for is a very important part of what a buyer’s agent does for a client.)
- That the licensee cannot advise either party in any dispute that arises relating to the transaction; (This seems like a CYA statement to me. When a dispute arises, that is the time when clients need advice from their brokerage the most.)
- That licensee may be acting without knowledge of the client’s needs, client’s knowledge of the market, or client’s capabilities in dealing with the intricacies of real estate transactions; and (The listing agent is earning a commission for representing the buyer, but doesn’t have to know anything about you, just that you have money for their other client. There is a chance that a buyer is a first time home buyer, the seller has obviously been through the process before. Who do you think would be at a disadvantage in this situation?)
- That either party may engage another licensee at additional cost to represent their respective interests. (Glad this disclosure is in there, but I wonder how well this is explained by an agent who knows they have procuring cause on their side. The extra expense will likely keep unsuspecting home buyers in the deal with the listing agent.)
My main concern with dual agency is that neither the buyer, nor the seller, is actually getting the full representation for which they are paying. I know when I represent a buyer, I fight like mad for my client. I can’t arm wrestle myself – I’d have to pick a winner. Standing on the sideline and watching two parties hash it out without offering my advice to either side is not why I am in this business. I don’t think it is why anyone hires a real estate agent. This is why I do not practice personal dual agency. Consider using an agent that focuses on single agency when you buy your next home. Contact me at 202-271-5301 to GET STARTED.