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The True Test of a Good Realtor

By Christina Cavins

Real Estate Agent with Irongate Inc. REALTORS SAL.2006006317

July 04, 2008 04:57 PM

The true test of a good realtor is practicing dual agency in the sale of a home. Google has 16 definitions for dual agency. The definitions apply to the whole nation and not just Dayton, Ohio. The most complete definition can be found at RealtyStore.com. Dual agency is defined as "A breach of agency rules which must be disclosed to the parties. Where one agent (often a real estate broker or agent) represents both sides in a contract (i.e. the Vendor and the Purchaser) such that the agent has a conflict of interest." Good realtors are able to practice dual agency, but great realtors are able to practice dual agency completely and successfully. A dual agent must be honest and maintain both parties confidentiality. Working in a busy office can make it tough to maintain a client's confidentiality. Conference rooms are a great place to have a quiet conversation over the phone or in person. Nothing should be shared with one party unless specifically requested by the other party. In order to ensure confidentiality it is never a bad idea to have EVERYTHING in writing. Some realtors don't practice dual agency. Dual agency can be a tricky topic, so if in doubt seek a Broker's advice.

Active Rainers, who does/does not practice dual agency? Any thoughts?

Happy Selling!

Christina Asad Edwards, REALTOR
Southwest Ohio Home Expert
Christina.AsadEdwards@RealLiving.com
www.teamedwards.info
mobile or text 937-205-4741 office 937-573-0082 fax 937-433-3561
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Karen Monsour

Coldwell Banker Fort Lauderdale Beach - Fort Lauderdale, FL

REALTOR, SSRS - Sells FL Waterfront, Short Sale Expert!

I'm a transaction broker...I do not do dual agency...that's the way it is...under my Brokerage.

Jul 04, 2008 05:23 PM

Karen Anne Stone

New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX

Fort Worth Real Estate

Christina: There are fifty states in the United States, and I am betting that there are fifty different ways of handling this agency issue. Some do not permit dual agency at all. Texas has something called an "intermediary..." which exists when the agent is working with both the buyer and the seller, but since, under Texas agency law, cannot represent both of them, so, after giving full disclosure, the agent represents neither, but acts as an "intermediary" between the two parties... but of course with their consent. I have practiced real estate in Ohio and Texas, and, trust me, there are many things that are different.

Also... your definition of dual agency may be thought to be correct while the words are sitting on the page of the dictionary, but since there is such a variety of ways of doing business in every state, things are not as cut and dried as they may seem to be from afar.

Jul 04, 2008 05:30 PM

Christina Cavins

Irongate Inc. REALTORS - Centerville, OH

www.BuySellOH.com Search Ohio Homes For Sale

Karen and Karen,

Thanks for your comments. Karen Anne Stone, I partially agree with you. However, the definition of dual agency never changes from state to state, but the way of handling it may.

Christina

Jul 04, 2008 05:51 PM

Robert Machado

HomePointe Property Management, CRMC - Sacramento, CA

CPM MPM - Property Manager and Property Management

Dual agency is at best very difficult. I think it is best to not try to double end deals for the sake of your own long term interests. A lawsuit can easliy eat up all the profits.

Jul 04, 2008 06:27 PM

Jim Quinn

Century 21 - Anaheim, CA

North Orange County Real Estate

Dual agency is possible if done properly. THere should not be any problem with that as far as I see. Just disclose and you should be fine.

Jul 04, 2008 06:36 PM

Chip Jefferson

Gibbs Realty and Auction Company - Columbia, SC

We close alot of our transactions dual. Imake sure everyone is treated with the utmost responsibility and care. The clients get top service and dont miss a thing!

Jul 04, 2008 11:25 PM

Mike Saunders

Retired - Athens, GA

Christina - not sure how a dual agency can be a "breach" of agency rules if the rules specifically allow it. In Georgia, dual agency is legal. I prefer to use designated agency but am currently acting as a dual agent in transaction. Both parties are fully aware, which is required in Georgia.

Dual agency, in it's simplest definition, is the same brokerage or licensee representing both sides of transaction.

Jul 05, 2008 12:45 AM

Jim Crawford

Long & Foster - Fredericksburg, VA

Jim Crawford Broker Associate Fredericksburg VA

It boils down to trust, and disclosure. Years ago before the big MLS you not only had to gett he listing, you had to get the buyer. You sat down at the table and hammered out the deal in a meeting of the minds. I see no wrong in dual agency if it is done correctly. Let me ask you..how many buyers agents actually work for their buyer? How many tell their buyer that this is a bad investment, or it is in the wrong school district? How many buyer agents tell their buyer they are getting a bonus? How many buyers agents get a kickback for a mortgage and don't disclose that?

Jul 05, 2008 12:53 AM

Michael Setunsky

Woodbridge, VA

Your Commercial Real Estate Link to Northern VA

Dual Agency is legal in Virginia as long as it is fully disclosed to both parties. Should a conflict of interest arise with a licensee (Dual Agent), the Broker will assign the Buyer to another licensee (Designated Agent). There shouldn't be a problem as long as everything is property disclosed. The Seller has the option of allowing Dual Agency in the Listing Agreement.

Good Post!

Jul 05, 2008 01:11 AM

Robert L. Brown

www.mrbrownsellsgr.com - Grand Rapids, MI

Grand Rapids Real Estate Bellabay Realty, West Mic

I prefer to keep transactions "arms length". I've done dual agency before and yes it can be tricky but not insurmountable.

Jul 05, 2008 04:22 AM

Lane Bailey

Century 21 Results Realty - Suwanee, GA

Realtor & Car Guy

I don't think that one can truly act as a fiduciary to competing parties on a transaction. Last year I wrote this (you came and asked me to comment here) about why I didn't think that Dual Agency was ethically possible.

Here is a situation... You are the listing agent, and have a Buyer's Broker Agreement with the buyer. As such, you are representing both of them. In the course of business with the buyers you find out that they NEED to buy a house in the next 15 days, and close in 45 or they will lose some financial benefit (taxes, from a relo company... whatever). There are no other properties that seem to interest them.

Now, that is certainly something that could affect the negotiations. If you weren't representing the sellers, it would be a no-brainer that you would keep that under your hat. If you weren't representing the buyers, it is something that you would pass along to your sellers because they may be able to hold firmer on the price.

As the seller's agent, it is in the best interest of your client to disclose this material fact.

As the buyer's agent, it is in the best interest of your client to not disclose this material fact.

If you are a dual agent, what do you do?

Regardless, you have violated your responsibilities to one of your clients.

Jul 05, 2008 05:29 AM

Christina Cavins

Irongate Inc. REALTORS - Centerville, OH

www.BuySellOH.com Search Ohio Homes For Sale

Robert, Thanks for the comment!

Jim Q, Laura, and Michael, I agree! Thanks for the comments!

Mike, It is not a complete definition though. Thanks for the comment!

Jim C, Good points, but you are discussing a case where Realtors are acting unethical and could lose their licenses. Thanks for the comment!

Lane, It is not crucial information and a violation to one party or another if you keep it confidential. Simple answer. Thanks for the comment!

Christina

Jul 05, 2008 08:11 AM

Sandy Nelson

Riley Jackson Real Estate Inc. - Olympia, WA

your Olympia area Realtor

I don't practice dual agency. I don't believe it can be done, as it requires us to be neutral and not take sides in certain instances, yet we should owe our clients our full engagement on their behalf.

Sandy

Jul 05, 2008 08:23 AM

Kate Elim

Dockside Realty - Spotsylvania, VA

Realtor 540-226-1964, Selling Homes & Land a

Hi Christina...As always, dual agency is a worthwhile discussion. It is interesting to read the differing opinions expressed. It will be interesting to see if this type of relationship ever goes away completely.

Kathleen

Jul 05, 2008 10:55 AM

Lane Bailey

Century 21 Results Realty - Suwanee, GA

Realtor & Car Guy

I guess we would have to disagree about whether that info would be important. I have dealt with sellers that needed to sell and buyers that needed to buy, and there is a pretty big erosion in their negotiating power if the other party knows it.

And I don't see how one can have that info and not favor one party or the other by disclosing or not disclosing it.

Jul 05, 2008 11:14 AM

Rich Schiffer

Swarthmore, PA

Referral Agent, e-PRO

Thanks for linking to my post on Dual Agency. I think that post may have been my very first post, way back when in 2006, and it still is a good topic for discussion. Just this morning, in fact, the topic came up in conversation with another agent in my office.

While it is true that Dual Agency is permitted in many states, many other states forbid the practice.

One of the key reasons that a consumer hires an agent is to represent the consumer's best interests during the negotiation process. In a dual agency situation, at least one side is giving that up. It may not be a breach of the rules, but it certainly represents a breach of the fiduciary duties that come with the agency relationship -- which is why I choose to avoid the situation whenever possible.

Jul 06, 2008 03:11 AM

Debby Bright

Debby Bright, Real Estate Broker - Los Gatos, CA

Even though I've had successful dual agency transactions in the past, I once tried to sell a condo (my listing) to my client and I can't remember why, but she ended up taking me to small claims court. By the time all was said and done, I ended up with a judgement that netted her $10 but I decided at that point it wasn't worth it to try and sell that condo via dual agency. It's really hard to represent both parties at the same time. There are too many opportunities for conflict of interest (yours) to arise. The risks outweigh the benefits in my opinion.

Jul 09, 2008 11:21 AM

Jim Hirschhorn

Real Living Real Estate Solutions - Orlando, FL

GRI, Real Living - Orlando

I think it is interesting to read the comments above. Especially from Robert Machado, who is in property management. Historically, property management is more exposed to lawsuits than residential real estate. Like anything else, there are good and bad experiences. We too work as Transaction Brokers. Most agents would not steer clear of a chance to make double the commission. We keep reminded our agents that their role is to manage the transaction. Of course, full disclosure is always the best idea. Once you "forget" to share some information, start packing your bags.

Jul 10, 2008 02:37 AM

Mitch Vogel

Clear Choice Realtors - Indianapolis, IN

I may be late in posting my comments, but I believe that dual agency should be illegal. Why? Because there are too many situations that may develop where the agent compromises his agency relationship during the course of negotiation.

In Indiana, it is called Limited Agency. The title is perfect since the agent "limits" his or her ability to properly represent one, or both clients (buyer and seller).

We in Indiana must have written disclosure from both parties that we cannot:

1. Give either side a contractual advantage.

2. Provide info that may motivate a client to have an advantage in the transaction.

Here's the best example I can think of: A couple gets a divorce. The wife has hired Lawyer A to represent her interests during the suit. It's a small town so the husband has the option of hiring Lawyer A, or Lawyer B from another firm. Why wouldn't the husband want to hire Lawyer A? Maybe he has someone elses best interest already in mind!

The safest way to keep a sense of trust with a client is to avoid dual agency. If you don't practice it, you never run the risk of "limiting" your ability to represent a client.

Dec 02, 2008 04:46 AM

Anonymous

Russ

"great realtors"

Does not exist

Full Commission is the rule of all evil.

Sep 10, 2009 01:09 AM

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