Real Estate Agents and Dual Agency

Do you know what it means when a real estate agent is acting as a "dual agent"?  It means that the listing agent is also the agent that sells the property to the buyer.  Both the buyer and seller deal with the same agent.

In some ways, this can be a good thing.  Dealing with one agent instead of two is more efficient. Fewer people means more convenience.

It can also mean financial savings to the seller. Sometimes, it can mean a lower overall commission is charged on the transaction.

There can also be drawbacks to the situation.  A "dual" agent can't keep secrets from either party.  The agent has a duty to his or her principals to be honest and act in the principal's best interests. How can you act in the best interests of the buyer and seller at the same time?

What it means is that the agent is "transparent". Anything you say to the agent, the agent passes on to the other party, and vice versa.  So, if you, the vendor, tell the agent that the basement leaks, the agent has an obligation to pass that on to the seller.  Likewise, if the buyer says that they are willing to pay up to $5,000 more than their offer, the agent has to tell the seller.

The agent is not going to be able to drive a hard bargain for you.  In fact, the agent won't be able to bargain for you at all. You have to do all the bargaining, without a lot of help from the agent.

In other words, the agent is not "your" agent.  The agent is nothing more than a middleman, who owes no more loyalty to one party than the other.

Sometimes, real estate agents are criticized for wanting only to get a deal and not caring enough about whether you get a good price for the property.  If the agent is getting 5% commission, dropping the price by $5,000 only costs them $250, but it will get the deal done a lot faster.  While the criticism may not be warranted, I think that it is easier to make the criticism when there is dual agency.

I prefer it when I have my "own" agent.  I can tell them what I want without worrying that they have to pass everything I say along to the buyer.  I can trust their opinions during the bargaining process.  I may pay more commission, but maybe I get a lot more for the house - maybe a lot more than the savings I might have realized if there was only one agent.

If you are a real estate agent and you disagree with what I am saying, I want to know why.  Please let me know!