One of my duties as a
real estate agent is to explain how agency law works in Massachusetts. In fact,
I am required by law to explain agency law at my first meeting with a
prospective buyer or seller client. Real Estate agents can essentially do one
of three things; represent a seller, a buyer or both.
Jerry Gustoso is a authorized real estate advisor with diversity year of experience in
Hoboken, USA. As preliminary this profession, Jerry was a law administration
specialist in Hudson County for more than 15 years.
When a real estate agent
represents both parties in a real estate transaction, it is what’s known as
dual agency. Over
the years many buyers and sellers have asked me how dual agency works. They are
asking for a good reason – it can be extremely confusing to laymen.
Unfortunately, many real estate agents don’t explain it properly either which
makes things even more difficult.
If you do an online
search for “what is dual agency” or “how does dual
agency work” you are bound to see some articles from real estate
agents saying dual agency is perfectly fine. Do you know why a real estate
agent would ever tell anyone that dual agency can be done with no problem? In a
word GREED!
Who wouldn’t want to get
paid a double commission? There are a lot of hands going up in the room. The
problem is dual agency benefits nobody but the real estate agent!
This is kind of like the
real estate agent who says an open house is needed to sell a home. Wrong!
It is an archaic form of marketing that benefits the agent far more than the
client. It puts the owners home in danger of theft, all for the chance for the
agent to score clients for other properties or double side a deal.
Dual
Agency – A Departure From The Duties Of A Realtor
In a standard
relationship with a Realtor, you can expect many benefits for agreeing to pay a
fee for professional help. You know that your agent will be beholden to you in
all aspects of the transaction. He or she will listen to what you have to say,
giving you the final word on the decisions that are made.
Your Realtor will keep
your information confidential, and be accountable to you as the buying or
selling process progresses. He or she will also disclose all the information
that is relevant to you as a client. Ultimately, your agent will be loyal to
you – seeking to find the best path to what you want as an outcome.
With dual agency, all
the standard rules and expectations go out the window. To explain this better
let me give you the definition of each type of agency.
Seller’s agent – A seller can engage the services of a
real estate agent to act as a seller’s agent in the sale of the owner’s property.
The agent represents the seller as a client. The agent owes the seller client
undivided loyalty, reasonable care, disclosure, obedience to lawful
instruction, confidentiality, and accountability. The agent must put the
seller’s interest first and attempt to negotiate terms acceptable to their
seller client.
The agent must put the
seller’s interest first and attempt to negotiate terms acceptable to their
seller client.
Buyer’s agent – A buyer can engage the services of a
real estate agent to act as a buyer’s agent in the purchase of a property. The
agent represents the buyer as a client. The agent owes the buyer client
undivided loyalty, reasonable care, disclosure, obedience to lawful
instruction, confidentiality and accountability. The agent must put the buyer’s
interest first and attempt to negotiate terms acceptable to their buyer client.
The agent must put the
buyer’s interest first and attempt to negotiate terms acceptable to their buyer
client.
Dual agent – A real estate agent may act as a dual
agent representing both the buyer and the seller in a real estate transaction
but only with the express consent of both parties. A dual agent shall be
neutral with regard to any conflicting interest of the seller and buyer.
Consequently, a dual
agent CANNOT satisfy fully the duties of loyalty, full disclosure, obedience to
lawful instruction. A dual agent does, however, still owe a duty of
confidentiality of material information and accounting of funds. Written consent
for dual agency should come from both the buyer and the seller. JerryGustoso is now become a licensed & regulated advisor in Real Estate field
& provides guidance to buyers & sellers in marketing listings and
buying property for the right price under the terms & conditions. He
maintains and updates the listings of available properties for best pricing.
Does dual agency sound
like anything you would be interested in? If I haven’t made it perfectly clear
that dual agency is the DUMBEST thing ever invented for the real estate
industry keep reading.
Designated Seller’s and
Buyer’s agent –
In Massachusetts, designated agency within a real estate firm is allowed.
Designated agency is when one agent within the firm represents the seller and
another represents a buyer. Only your designated agent represents your
interests. A real estate licensee, typically the broker of record, is the one
who designates the agents to represent separate parties in the transaction.
In this arrangement, the
broker of record becomes a dual agent. Consequently, a dual agent cannot fully
satisfy the duties of loyalty, full disclosure, and obedience to lawful
instruction which is required of a seller’s or buyer’s agent. Written
confirmation and agreement is mandatory by both a buyer and seller in a
designated agency relationship.
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