News and Events
January 29, 2007
Ask the Pros: What is a Dual Agency?
What is Dual Agency?
By Roma Schaefer
Dual agency is when a real estate broker, directly or
through an associate licensee, represents both the seller and the buyer in the
same real estate transaction. This is a
legally acceptable practice which requires full disclosure acknowledged in
writing by both the seller and the buyer prior to entering into any
negotiations.
Since there is a potential for a conflict of interest, it is
important for all parties to understand how the agent is expected to perform under
this agency agreement. It is the
responsibility of the agent to explain to the buyer and seller what dual agency
means and how they will represent them in the transaction prior to the signing
of an agency agreement.
Legally and practically, the agent must follow strict
guidelines. The agent is required to
work fairly and honestly for both parties.
He cannot knowingly say anything or do anything, which might place one
party at a disadvantage, disclose the personal confidence of one party to the
other party, including motivation to sell/buy, negotiating strategy, or any
other information a party specifically instructs the agent in writing not to
disclose unless the disclosure is required by law. He must endeavor to be impartial between the
parties and not represent the interests
of either the Seller or the Buyer to the detriment of the other party. Specifically, a dual agent cannot disclose to
the seller what the buyer is willing to pay and cannot disclose to the buyer
what the seller is willing to take. In
addition, the agent must disclose to the buyer any known material defects of
the property.
Real estate professionals who are well trained and
experienced know how to practice dual agency correctly. Many real estate
transactions are handled by dual agents, and with full disclosure, it works
very well and end with all parties satisfied.
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