Understanding Dual Agency/Disclosed Limited Agent
As a home seller, are you comfortable having your broker also represent the buyer who wants to purchase your home? In our experience, the ones who aren’t don’t actually understand what it means. By prohibiting your broker from acting as a Disclosed Limited Agent (also known as a Dual Agent), you could be harming your position.
It hasn’t happened a lot, but we have had an occasion or two when a seller mentioned that as their listing agents, they didn’t want us to be on both sides of the transaction. Most feel it’s impossible to represent the best interests of each party at the same time and for some brokers, that might be true. For us, there is only one answer to the question and that’s the truthful one.
After explaining to our seller that if someone calls us to inquire about their property and we don’t have their permission to sell it to them, we are limited to either referring them out (and to an agent who doesn’t know the house as well as us) or selling them something else – neither of which is the most favorable for our seller.
To protect against these conflicts of interest, dual agency imposes several restrictions on real estate agents. The agent must inform both the buyer and seller in writing and is required to treat both buyer and seller with fairness and honesty. They must provide full disclosure regarding the property and its material condition but the agent can’t reveal any confidential or personal information of either party involved.
Through our marketing efforts both online and in print, we receive a great deal of inquiries on our listings. We are quick to return calls and emails and obviously know our listings well and are also able to shed the most favorable light upon the properties. Without a seller’s permission to represent a buyer, the subject property is actually at a distinct disadvantage because we have been told we aren’t allowed to sell it. Knowing we work with about 50 buyers a year, this adds another layer that sellers should seriously consider.
When we work with a client, we advise them on value. This is true for buyers or sellers. What we don’t do is tell our buyers what to offer nor do we tell our sellers what to accept. This holds true whether we represent the seller, the buyer or both. It’s easy to advocate and negotiate on behalf of each party because we are communicating their reasons behind the details of their offer and/or subsequent counteroffer. Whether the other party likes it, thinks it’s fair, etc. isn’t up for us to decide. We are the conduit between the two reminding everyone we all have the same goal. One party wants to buy the house the other party wants to sell, and we are here to see that it gets done.
In every instance where we have explained the disadvantage of limiting our ability to act as a Disclosed Limited Agent, our sellers have reconsidered their previous wishes and, in a couple instances even said, “We hope you are the ones to bring the buyer.” We once had two attorneys as sellers who felt it was impossible for us not to have a conflict of interest in the event we also represented the buyer. After all, it’s impossible in their profession. So, after MUCH discussion, we all came to the agreement that if at any time they felt they weren’t being well represented by us, we would agree to remove ourselves as the dual agent. As luck would have it, we did end up fielding an inquiry on their property and ultimately put it into contract, representing both buyers and sellers. It closed successfully and all parties were pleased with the process and outcome.
A second component of Disclosed Limited Agency impacts the buyer and whether they are comfortable with their agent representing more than one buyer wanting to make an offer on the same property. The particulars of that are for another column but navigating those waters can be tricky, though not impossible.