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When one realtor represents both the seller and buyer

When you sell your house, your real estate agent usually represents you throughout the process. And your agent has a fiduciary duty to you, which means he or she has a responsibility to act in your best interest.

It is possible for the seller’s agent to represent the buyer as well. But how does that work in practice? The idea is that the “dual agent” manages all negotiations and paperwork between the buyer and seller and acts as a neutral, with no fiduciary duty to the buyer or the seller.

If you live in any state where dual agency is allowed, it’s helpful to understand the pros and cons.

The real challenge of ‘neutrality’

Even if an agent agrees to fairly represent both parties in a home sale, it’s not always so easy in practice.

In fact, in some cases, it might make the deal feel rather lopsided. Imagine a sale in which the buyer requests certain repairs and/or a lower price. And on top of that, imagine they ask the seller to cover the closing costs.

In such a case, it’s easy for the seller to feel shortchanged by not having an agent of his own to support his side of the deal.

The benefit of each having your own agent

The process of buying and selling a house brings with it a host of uncertainties and reasons to negotiate. Everything from the price to the terms is up for discussion, and it’s your real estate agent that acts as your advocate throughout.

If you’re a seller, your agent knows the positive and negative elements of your home, and knows the key things about you, including your willingness to give and take, and where you stand on a price that’s comfortable for you.

If you’re a buyer, your agent knows what you can afford and how willing you are to negotiate when you have certain requests or concessions you’re seeking.

These are some of the reasons why a dual agent plays a more removed role in the process, to avoid taking any one side. That means the buyer and seller end up working out the details more closely with each other and each loses the benefit of an agent’s experience and direct help in the process.

The benefits of dual agency

While there are clearly several drawbacks, there are also some benefits to having a dual agent.

First, having one agent handle the sale can streamline the process. It avoids a waiting game with phone call chains that usually include your agent calling the buyer’s agent, who calls the buyer and then call your agent back again each time there is something to decide.

Also, with one single agent receiving commission on the sale, it’s likely you can agree to a lower rate.

Designated agency is another option

Dual agency sometimes arises when the listing agent also has a client who is a buyer that wants to buy your home. Instead of serving as a dual agent, the listing agent can pass the buyer off to another agent to represent them, often in the same brokerage, or the brokerage can assign another agent to the buyer. This arrangement is known as designated agency.

While this gives each party their own representative, it also allows two agents who work for the same company to possibly negotiate terms that benefit the company.

Another concern is that the designated agent might feel like he or she owes something to the listing agent, given the referral.

No matter the arrangement, it is important to consult a lawyer when you’re selling or buying a home to ensure you understand the legal implications and the details.


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