In a recent Realty Times article, Bob Hunt, Director of the California Association of REALTORS®, penned an article entitled, “Dual Agency Can Be a Good Thing.” In it, he argues that real estate transactions are different; that those negotiations are about getting the deal done rather than about one side winning or losing. Because of that, it’s OK for the REALTOR® to be the servant of two masters, working for the buyer and the seller simultaneously.
Here’s what’s wrong with that picture.
When buying a home, an agent can do so much more for the buyer than just find a home and walk them through the process. The agent can advise the buyer, based on their education and experience, on what to do, how much to offer, or when it may be best to walk away from a deal. The agent, who is likely an experienced negotiator, can also negotiate on the buyer’s behalf, helping the buyer to get the best deal possible.
When selling a home, the agent will, of course, market the home, but the agent should also be a trusted advisor, negotiating the best price and terms for the seller. After all, the seller is paying thousands of dollars for the agent’s expertise.
In a dual agency situation in most states, the agent’s expertise becomes a nonissue. The agent must remain neutral throughout so the buyer and the seller lose out on that negotiating expertise and advice. In that case, what is the point of having an agent? They are no longer working on your behalf, but are simply doing the paperwork to get the deal done.
The only person for whom dual agency is a good thing is the real estate agent. He not only no longer has to counsel his client, he gets twice the commission! Instead of splitting the commission between the buyer agent and the listing agent, he gets to keep it all.
In most real estate transactions, the commission is set right in the beginning. Buyers and sellers who are paying that commission should demand that they receive the full services of their agent. For sellers, if in a state where you’re given a choice, don’t consent to dual agency.
For buyers, get your own agent. Don’t call the name on the sign in the yard. Exclusive Buyer Agents never take listings or represent sellers so with an EBA, buyers can rest assured that their agent will remain completely on their side throughout the transaction no matter which house they buy.
REALTORS® outlined in Bob Hunt’s article may only care about getting the deal done. Be sure your agent wants to get the deal done in your best interest. Say “NO” to dual agency.