Dual Agency vs. Designated Agency: Understand the Difference

Posted on Apr 26 2017 - 4:13pm by Bill Gassett
#58

agent with family

Editor's Note: This post was originally published on April 26, 2017. Housecall continues to share this piece due to ongoing requests and reader interest.

In an ideal world, you would be able to do a quick search for a REALTOR® and pick the first one you find to get knowledgeable, effective representation in your real estate transaction. Unfortunately, there are certain business relationships between real estate agents and clients that can present problems for the client–in many cases without the client ever being aware of it.

As a potential client, it can be helpful to understand the types of relationships REALTORS® can have with their clients, and how to tell the difference between an arrangement that serves your interests and one that doesn’t. One such arrangement that does not benefit the general public is referred to as dual agency.

Dual Agency – Not in Your Best Interest

So what is dual agency? In most states, dual agency refers to a situation where the same REALTOR® represents both the buyer and the seller in a real estate transaction. The term, however, can have different meanings in different states. For example, in California what they refer to as dual agency is called designated agency in many other places. The two terms can have vastly different meanings. For our purposes we will use dual agency to describe using the same agent for both the buyer and the seller.

There are very few people knowledgeable in the real estate business that will claim dual agency is good for clients. In fact, many professionals question why dual agency is even legal in some states. The reality of dual agency is that the agent is put in an impossible situation–one where he or she cannot meet the requirements of a REALTOR® serving a client.

One of the fundamentals of acting as an agent for a buyer or seller is that you seek the best interests of your client. A single agent cannot seek the best interests of both a buyer and seller negotiating over the same property.

A Conflict of Interest

As a buyer’s agent, the REALTOR® is attempting to purchase the home for the lowest price possible for their client. As a seller’s agent, the REALTOR® is attempting to sell the home for the highest price possible. It is easy to see how dual agency could create conflicts. Does the agent focus on buying for the lowest price or selling for the highest. You can’t do both.

To further complicate matters, in many states REALTORS® working as dual agents are prohibited by law from negotiating on behalf of either client. It is not clear what else the agent has left to do in such a situation. Without negotiation skills, there really is not much point to having an agent.

The dual agent cannot counsel the client on price, negotiate inspection issues or do pretty much anything else that would justify the commission the client pays. Even more outlandish, the dual agent is more than happy to collect a full commission from both buyer and seller. He or she gets paid double for doing virtually none of the things they would do if they were an exclusive buyer's or seller's agent.

Not Telling Clients about Dual Agency

Perhaps the most disturbing thing about dual agency is that many times, the clients will not be aware that their agent is working for both the buyer and the seller. Maybe the REALTOR® does not realize the conflict of interest. Maybe he or she is just doing a lousy job explaining agency. They sugar coat what is really happening for the chance to get both sides of the transaction. Whatever the reason, it is quite possible to wind up with a dual agent without even being aware of it.

When choosing a real estate agent to represent you in your purchase or sale, it is important to make it known that you are not interested in employing a dual agent under any circumstances. If the agent attempts to negotiate on the matter, go somewhere else. Real estate agents who are less concerned about their wallet do not work as dual agents. Instead, when this situation arises they refer clients to someone else who can represent their best interests.

Judging by some of the arguments you see in online forums about dual agency, there are some real estate agents who clearly put money before what is best for consumers. Over at ActiveRain, you can see some varied opinions from real estate agents on dual agency. Take a look at the transparency of this subject in many of the comments from agents. If you are thinking of buying or selling, you may enjoy the banter.

What you can take away from some of the comments:

  • Many real estate agents don't know what they are able to do and not do in a dual agency relationship.
  • There are a number of agents in the business who don't want to see dual agency go away.
  • A good percentage see dual agency from rose colored glasses and not the consumers’ perspective.

Designated Agency – A Workable Arrangement

Designated agency refers to a situation where the buyer and the seller each have their own agent, but both of those agents work for the same real estate company. Some argue that designated agency is just as bad as dual agency, because the focus of the agents is on what is best for the real estate firm and collecting the commission from both clients. However, designated agency does not have to be a negative arrangement for the clients if the real estate company is reputable. As long as the company allows agents to work freely for the best interests of their clients, there is no reason why the agents would do otherwise. The big difference with designated agency is both clients have someone fighting hard for them. It is often claimed that designated agency is bad for clients. But if someone is in your corner working on your best behalf, who cares if another agent in the firm is working for the opposite side?

When you are buying or selling, you want the best real estate agent you can find. Sometimes designated agency is the only way to get the kind of top-performing agent you need to accomplish your real estate goals. Just be sure when buying or selling a home you are completely aware of how agency law works in your state. It is a requirement that agents explain agency in depth so you understand it. It makes sense to work with an agent who has your best interests at heart! Disclosure is always paramount, especially with a topic as important as agency.

For more information about how dual agency works, click here

Bill Gassett is a nationally recognized real estate leader who has been helping people buy and sell Metrowest Mass real estate for the past 30-plus years. In 2016 he was the #3 ranked RE/MAX real estate agent in New England. Connect with him on Google+.

 

58 Comments so far. Feel free to join this conversation.

  1. Wayne April 28, 2017 at 6:22 pm - Reply

    Very good information about dual agency!

  2. Adrienne H April 28, 2017 at 7:21 pm - Reply

    After reading the resource from Active Rain it is clear many agents have no idea what they are able to do and not do when it comes to dual agency.

    Many agents are violating laws by giving guidance to both buyers and sellers.

    It’s sad that consumers have to be deceived by dual agency!

  3. Bill Gassett May 1, 2017 at 10:17 am - Reply

    Adrienne you are 100 percent correct. A large percentage of agents are doing dual agency illegally – giving guidance to each client.

    There is so much confusion when it comes to dual agency that is for sure!

  4. Wanda QUINNIE May 1, 2017 at 9:10 pm - Reply

    An amazing article that speak the truths of Real Estate.

  5. Christine Tatum May 2, 2017 at 10:58 am - Reply

    This article was written for the general public. I understand the difference between the two types of agency. This article presents a very shady, greedy and unscrupulous picture of real estate agents and a misrepresentation of the duties of an agent.

    • AGGIE SCHOENBERGER June 18, 2019 at 8:23 am - Reply

      My thoughts exactly. I have personally done many dual agency transactions that were excellent. When you educate both sides and serve both sides, dual agency is not the horrible thing discussed in this article

  6. Joan Farrell May 2, 2017 at 11:03 am - Reply

    Very good summary, but a bit simplistic about dual agency. In NJ, dual agency occurs when the BROKERAGE represents both the buyer and the seller. The rules of confidentiality apply, there is fiduciary responsibility to both parties, and you must treat both parties fairly, and cannot favor one over the other. Buyer wants to know what it is worth? You can provide comps, but no commentary. If you are clear from the start that you have obligations to both parties, this can work. When the parties start to butt heads, however, the agent gets smashed in the middle. In my past life, I was in human resources, dealing with boardroom execs as well as union workers and management. Sometimes in that profession you are a resource to both sides of an argument, and you cannot play favorites. You just work on getting the facts out there, and let the decisions evolve from the facts. I do agree that it is a slippery slope, and one where it is sometimes more helpful to refer the buyer to another agent in the brokerage.

    • Bill Gassett May 5, 2017 at 10:20 am - Reply

      You can provide comps but no commentary…..well isn’t that helpful! So consumers should try to become a real estate agents for the day and try to interpret data for which they have no expertise?

      Joan if I handed you a CMA in my area with no commentary you would not be able to give me what a house should sell for even though you are in the business.

      Of course a layman can’t either.

      This is exactly what I mean when agents sugar coat what they can and can’t do.

      The fact of the matter is you can’t counsel either a buyer or seller which is one of the major reasons someone hires an agent – to get professional advice!

      Your last statement is one the money……refer it to someone else.

      • Melissa December 3, 2018 at 5:55 pm - Reply

        “well isn’t that helpful! So consumers should try to become a real estate agents for the day and try to interpret data for which they have no expertise?”

        Isn’t that what FSBO s are doing? Just an observation.

  7. Jan Anderson May 2, 2017 at 12:04 pm - Reply

    I would beg to differ than the only thing of value an agent does for either their buyer or seller is negotiate if there is a dual agency situation! There is a lot more that goes into working with either or both that legally can be done in my state, Minnesota. This article, though it mentions that dual agency and its definition vary by state, seems only to describe a very negative description that all dual agency is bad for the client. Not true, yes the agent is not allowed to provide assistance that allows one party an advantage over the other, but a good agent still offers their clients significant support that they could not get on their own.

  8. Gary Gracia May 2, 2017 at 3:21 pm - Reply

    I suggest that there is an unfair assumption made about agents caring about the firm. I’ve been in 30 years and I don’t know an agent who would put the firm ahead of the client; the firm is just there to try to provide enough value to take a cut of the agent”s production. The agent lives and dies by what the client takes away from the transaction. It’s true that, legally, agents represent the broker and the broker represents the client. But every agent I know works for the client, not the broker.

  9. Tracy Bloom May 2, 2017 at 3:26 pm - Reply

    How can an agent ask a client to sign both contracts? Don’t they cancel each other out re conflicts of interest? I am assuming a listing agent is required to represent the best interests of their seller, and same for buyers’ agent?

    Isnt dual agency legally impossible?

    • Bill Gassett May 3, 2017 at 5:14 pm - Reply

      Ding Ding Ding – yes that is the problem Tracy. Except some real estate agents like to sugar coat the truth.

  10. Tom Wemett May 2, 2017 at 4:34 pm - Reply

    I beg to differ with you, Bill. Designated agency is dual agency but designed to deceive both the real estate licensee and the consumer that somehow the conflict of interest of doing an in-house deal goes away with the mere designating of agents. It does not. In essence, designated agency really is undisclosed dual agency, an act of fraud.

    • Donna Carpenter May 3, 2017 at 5:07 pm - Reply

      Calling designated agency fraud is ludicrous and shows a gross misunderstanding of agency. Agent’s have an affiliation with the broker (actual agent), but owe their allegiance to the client. It is not unethical or fraud – as you call it – for two agents from the same brokerage firm to work on behalf of their individual clients on the same transaction. It’s all about communication anyway, and a timely response. Agents from different firms most often work on the same transaction and they may know each other quite well, so how can one say that just being affiliated with the same company negatively affects how an agent represents their client. Frankly, I’m with a large brokerage with several offices and I don’t know most agents in the firm. On those occasions when I’ve practiced designated agency, it has been fully explained and disclosed to my client. To paraphrase an earlier comment, agents depend upon pleasing their client for their livelihood. I’m proud to be associated with great Realtors both in my firm and those in the overall Realtor community.

    • Bill Gassett May 3, 2017 at 8:00 pm - Reply

      Tom – why don’t you just come out and say you are an advocate for companies that only represent buyers. You should be a little more transparent with what you are trying to promote.

      The problem is your thinking is silly. An agent at an exclusive buyer’s agency company is no better equipped to represent a client than someone within the same firm as the listing agent.

  11. chris hill May 2, 2017 at 4:58 pm - Reply

    here in NJ, many if not most investors and savvy buyers ONLY want to work with the listing agency,hence, dual agency ALL the time.Why? the listing agent knows all the details of the property better,the deal gets done quicker and easier. And ,in the event of multiple offers, the listing agents buyer has another advantage. You can’t issue a blanket statement that “dual agency” is not in your best interest when the most knowledgeable and most frequent buyers only want to work that way. Its to their advantage!!

    • Bill Gassett May 3, 2017 at 5:13 pm - Reply

      That does not have to be dual agency Chris. The listing agent can continue to represent the seller. The buyer would have no representation.

      If the listing agent becomes dual then they can no longer counsel the seller on price and other things. They become a neutral party.

      What seller would agree to this if explained properly? How about none!

  12. Dennis Wooff May 3, 2017 at 11:56 am - Reply

    Under both concepts, the list agent never tells the seller that he will not be face to face with buyers working to get their price. They tend to infer they will be working for them, but can do little in either situation .
    That is almost as bad as when a single agent funding all marketing does not tell the seller that he/she is the one and only person working and funding. Even under a banner where everyone becomes ‘team’ it is really just a coop of one agent offices… the seller should know when there is only one agent who is the sole entity responsible to get all things done.

  13. David Blockhus May 3, 2017 at 12:54 pm - Reply

    Dual agency is quite problematic. As a real estate agent working for my client, my sole obligation is to act at all times in the best interests of my client to the exclusion of all interests, including my own. One can’t do that if they are working both sides of the transaction. See my recent post that details an agent’s fiduciary responsibility to his or her client – http://losaltoshomes.com/2017/05/02/what-is-a-real-estate-agents-fiduciary-duty-and-how-does-it-play-out-in-our-silicon-valley-real-estate-market/

    • Bill Gassett May 3, 2017 at 7:55 pm - Reply

      Cleary you get it David – many agents don’t. Unfortunately, they think more about losing the opportunity to double side a sale than what is best for the client that hired them.

      • Gail Lammersen Belt May 3, 2017 at 9:57 pm - Reply

        Very thoughtful comments all around. However you mention “the client that hired them”. There are times, maybe weeks earlier, when a Buyer Client” hired you as a “Buyer Agent” & later a Seller hired you as a “Seller Agent. Or, for that matter, vice versa. And perhaps even more weeks later, due to “price creep” or “location creep” or whatever, it becomes apparent that the listing is ideal for the Buyer. Either the Buyer moved up in price or the Seller moved down in price. By now you have invested multiple hours showing properties to the Buyer & more multiple hours counselling, marketing, holding open houses, broker opens etc,. for the Seller. In this scenario both clients “hired” you. Legitimately. There are options that work…but this discussion is not as “clear cut” as earlier comments make it appear. PS! Last month, April 2017, celebrates 50 fantastic years in real estate! I may not have seen it all, but I’ve seen a lot! 🙂

  14. Loren May 3, 2017 at 2:27 pm - Reply

    Good article, except Mr Gassett keeps referring to REALTORS®, whereas I think he means real estate salespersons(agents). Not all salespersons (agents) are members of NAR.

    • Bill Gassett May 3, 2017 at 8:01 pm - Reply

      Loren – You are correct. Although I don’t think the public knows the difference or for that matter really cares.

  15. Thomas Harrison May 3, 2017 at 5:06 pm - Reply

    I am seeing a lot of finger pointing,, keep in mind that every state has different rules regarding “Dual Agency” Transaction Broker” and Designated Agency” How one form of each works in one state, may not be legal in others. Just make darn sure you know the rules in your own state, so that you represent all parties fairly and accordingly

    • Bill Gassett May 3, 2017 at 7:52 pm - Reply

      Absolutely true Thomas – the problem is most real estate agents don’t know the law in their own state. If you want to be amused look at the dialog in the link to the Active Rain article and some of the commentary there.

      I had agents in three different states including California, New Jersey and Idaho tell me that in dual agency there is no problem with giving both the buyer and seller pricing advice.

      This is 100 percent wrong and one of the reasons why dual agency should be banned in every state.

      You have the blind leading the blind. Consumers are the ones getting harmed. It is no wonder there are more lawsuits against real estate agents than in any other situation.

  16. Bill Gassett May 3, 2017 at 5:10 pm - Reply

    What continues to amaze me is agents who don’t understand dual agency and how it works. In dual agency the buyer and seller both lose a fiduciary. Many of you need to look it up and UNDERSTAND what a fiduciary means.

    Here is a great quote regarding dual agency:

    “The only one who wins in dual agency is the agent. If consumers truly understood the dynamics behind dual agency, they would never agree to allow it. Unfortunately, they don’t understand and the one who’s explaining it to them is the agent who will benefit from them saying yes to it.”

    It is abundantly clear that consumers are not getting an accurate description of dual agency from many real estate agents. Even some of the comments left above confirm that.

    By the way Tom Wemmet – I totally disagree. Your statement is just non-sense designed to confuse the issue. It is just another way of selling a company that just does buyer’s agency and nothing more.

    An agent in the same firm is no less equipped to represent a buyer than someone else from another firm.

  17. Kathleen Carlson May 3, 2017 at 6:42 pm - Reply

    Please address “Transaction Broker”, which is assumed in the state of Florida.

  18. Thomas D. Guidry, J.D. May 3, 2017 at 9:55 pm - Reply

    Dear Bill,

    It is so refreshing to see a highly successful real estate agent share the truth about an aspect of real estate brokerage that is not right or fair for the consumer. Hopefully other outdated and/or bad industry practices will be brought to light and eventually changed to benefit consumers. Thanks for your truthfulness. I am still scratching my head over our “Transaction Brokerage” here in Colorado…

    • Bill Gassett May 4, 2017 at 5:02 pm - Reply

      Thanks very much Thomas.

  19. DONNA SUTTON January 12, 2019 at 11:55 pm - Reply

    Thanks Bill, as a broker for 40 years I try to avoid dual agency. Think it should be declared illegal. I am a Mediator for CAR and have been for years. Many of our complaints are agents acting as dual agents.

  20. khurram saleem May 9, 2019 at 7:26 pm - Reply

    I am selling real estate in California & Georgia for the last 14 years & 4 years, worked with ReMax, but now have a small brokerage. By now all have defined dual & designated agency. Both are detrimental to the best interest of the clients. How can a lawyer represent both sides or has anyone seen a campaign manager working for both parties. It is not possible. It is not in the best interest of Seller to have an agent represent both sides. I have worked in residential transactions & then transitioned in Commercial, where situation is more horrific. It becomes more sophisticated where the listing brokers have their own pool of buyers & they do not market the property openly just to double end. So the Seller is misrepresented. It becomes even worse if it is a short sale or bank owned property where if dual agency or designated agency happens most of the times & a sizable amount of the transactions are dual or designated.Nowadays Listing agents are more careful & go by designated agency. Here I would take the opportunity & say the most transparent method of buying residential home is HUD properties. There are few bank owned assets where dual agency is prohibited. As a dual or designated agent real estate agents cannot fulfill the fiduciary responsibility he or she has to accomplish. For the greater interest of consumers & real estate industry both dual & designated agency should be prohibited & have to go. May I suggest if dual or designated agency is not about double ending can the agent representing Seller can forgo buyer side of commission for the better interest of the client he is representing?

  21. Bill Beavers III June 17, 2019 at 4:11 pm - Reply

    The problem with this article is that is does not differentiate the laws in different states. In Maryland, where I work, and have worked for 25 years, the term ‘Dual Agency’ does NOT mean the same thing as the term ‘Dual Agency’ in this article. In fact, ‘Dual Agency’ in Maryland is EXACTLY what is defined as ‘Designated Agency’ in this article. I work for the largest independently owned real estate company in America, Long and Foster, and we have not, to my knowledge, ever had ANY issues with the individual agents working for the BEST interests of their respective clients.

  22. Earl Hoppenrath June 17, 2019 at 5:02 pm - Reply

    Lots of altruistic remarks about agency and representation, but isn’t the real purpose to keep from sharing commissions with co-brokers. It is virtually impossible not to have a bias, even small, toward either a buyer or a seller. Just human nature. Our system is adversarial by design. If you were involved in some some type of litigation, would you even consider sharing a lawyer with the opposing side?

    Anyone have any thoughts on what the possible outcome(s) will be from the recently filed class action lawsuits regarding BAC? One scenario could impact this entire thread.

  23. Marvin Von Renchler June 17, 2019 at 6:41 pm - Reply

    I was first licensed in 1980, age 24. Within the first 6 months I had serious doubts about dual agency, and even authored some articles about how it shouldn’t be allowed. 39 years later we are still talking about this? LOL Those ‘double enders’ don’t want to touch the subject.

  24. Ileri Ogunfiditimi, REALTOR, LREA June 17, 2019 at 6:51 pm - Reply

    Is dual agency really the problem or the lack of training on how to effectively use dual agency? I believe the lack of training is the real issue. Dual agency provides agents with another option when working with clients in transactions. Although many agents don’t maintain a database of clients,  a few do – usually top producers or agents in the top 5%. 

    In sales, a customer or client database is a very important success tool and valuable asset yet it’s grossly underutilized by most real estate salespeople. Those agents that do use databases are able to develop “off market” deals by matching buyers and sellers from their database or CRM program. 

    In fact, there are agents (especially in commercial) who ONLY use their database to find and close deals. They don’t use or rely on co-brokers, an MLS or CIE platform nor do they market deal opportunities on the open market. In such cases, dual agency may prove to be a useful tool in consummating those “in-house” transactions. 

    As independent professionals, we are part of a fascinating industry that provides so many opportunities for us to operate our businesses while remaining self-reliant and independent. It’s truly a privilege that most of us take for granted. 

  25. Michael Kelcher June 18, 2019 at 2:10 am - Reply

    In Minnesota Dual Agency is permitted. I’ve been a dual agent many times, without issues. In a dual agency situation the agent assists in (almost) every aspect of the buyer’s side as well as the seller’s side.

    The state requires that both the buyers and sellers agree to dual agency and the both buyers and sellers understand that the agent/brokerage cannot advocate for one party if it’s detrimental to the other party. Additionally, the agent/brokerage owes both sides the normal requirements of loyalty, confidentiality, disclosure, obedience, reasonable care, and accountability.

    I do not agree with the OP statement… “It is not clear what else the agent has left to do in such a situation. Without negotiation skills, there really is not much point to having an agent.”. Negotiating the price is a small percentage of the time, effort, and expense required to list a home and find a buyer for it. Hopefully, the agent provided the sellers with comps and assisted the sellers in determining an asking price (the same as a designated agency agent would do) long before a buyer was on the scene. Additionally, the agent also explained that the market is such that most homes sell at a certain percentage of the asking price. So….the sellers have an idea what their likely bottom line is before it’s listed.

    Buyers seldom buy the first home they look at. After looking for a while and after searching the internet, they have a pretty good idea of what they can get for their money. The negotiating usually takes literally less than an hour and seldom requires more than 3-4 phone calls.Buyers and sellers can come up with their own dollar figures for offers and counter-offers… and if they do…it does not diminish the importance of having an agent who assists both sides with a myriad of other things.

    For all the folks who think that Dual Agency is the brainchild of the devil and crooks… if there was really a problem, the state Commissioner of Commerce would hear about it and end it. It quite simply is quite simple…and it’s really not a problem.

    The folks who would like to see it go away…are the large national chains…and they are making a lot of noise and a lot of false statements.

    • Ileri Ogunfiditimi, REALTOR, LREA June 19, 2019 at 10:13 am - Reply

      Michael, I completely agree with you that dual agency can be performed ethically and successfully. It’s simply another tool practitioners can use when working with different parties in a transaction. Proponents of its elimination are well-meaning but haven’t considered all of the issues surrounding dual agency.

      I believe that if it were to be completely eradicated without an alternative replacement like “Transaction Broker” (which isn’t perfect either) it would actually limit free trade by restricting competition in the marketplace. Without dual agency, firms or brokers would be legally “forced” to cooperate with competing brokers on ALL of their “in-house” transactions since the brokerage firm and agent would be prohibited from consummating deals independently or solely.

      In other words, a co-op and competing broker would ALWAYS be REQUIRED in order for a brokerage firm or agent to close a deal. It wouldn’t matter if the brokers in the transaction were REALTORS, participated in the MLS platform, or not. Essentially, ALL licensed practitioners (e.g., commercial, residential, business opportunities, etc.) would have to conform to such an egregious and anti-business policy.

      Brokerage firms and independent agents would effectively lose their “freedom of choice” and ability to operate freely on the open market. In a free enterprise system, freedom of choice and the ability to legitimately run your business the way you want to run it are hallmarks of commerce.

      REALTORS and MLS competing member firms agree and choose to cooperate with one another as a condition of their membership in the NAR and MLS systems (emphasis is placed on “choose”). Yet NAR still recognizes the existence of a competitive environment by stating in its Code of Ethics that “cooperation is no guarantee of compensation.”

      Because of the “spirit of cooperation” many REALTORS falsely believe that the co-op fee is guaranteed when, in fact, it’s not. The co-op fee is ONLY “protected” if it goes through the MLS system. Outside of the MLS system, co-op fees are NOT protected, have to be negotiated, and separate commission agreements finalized between the brokers involved in each transaction.

      Which brings me to my last point: Not all practitioners are REALTORS or MLS members. Principal brokers or firms are NOT legally obligated to join the NAR or participate in an MLS system. Therefore, non-REALTORS and non-MLS brokers are not bound by the same rules of competitor cooperation.

      Such firms have reserved their freedom to choose whether or NOT to work with a competitor or competing brokerage firm. That may not be an easy pill to swallow (it’s a huge thorn in the side of many commercial practitioners), but it’s the nature of our competitive business environment.

      So illegalizing dual agency would be an unfair policy and anti-competitive act. And an antitrust timebomb just waiting to happen.

      • Bill Gassett June 19, 2019 at 1:02 pm - Reply

        Sorry but you are missing the whole point of the article which is that single agent dual agency does not benefit consumers.

        Not sure how anyone could argue that it does. As an agent consumers lose their ability to have an expert in their corner guiding them and making the right decision.

        What single agent dual agency does is create a conflict between a real estate agent and seller/buyer where the goal is to close the transaction – NOT to do what is best for one of the parties.

        • Ileri Ogunfiditimi, REALTOR, LREA June 21, 2019 at 12:52 am - Reply

          Bill, single agent dual agency has to be consensual between all parties before a broker or agent can act in that capacity. If one of the parties choose not to be represented by the same broker, then that party has the choice of either going it alone or seeking out a buyer/tenant broker or attorney. So consumers (many of whom are very sophisticated) do have options and a choice in the matter.

          And to my earlier point, I was trying to bring to light that without dual agency, an independent broker or agent wouldn’t be able to work on their own deals without the need for a co-op broker. Some principal brokers are solos and don’t sponsor affiliated agents so designated agency wouldn’t be applicable. What options would they have to broker their own transactions?

          So the notion of eliminating dual agency would be too restrictive and prevent a broker from operating freely in the business marketplace. The brokers/agents would essentially lose their ability to be self-reliant and independent which totally goes against the principles the industry was founded on.

          Another point I was trying to make is that there are many brokers/agents who are not REALTORS or members of the MLS like commercial and business brokerage practitioners. For example, it’s very rare for a business brokerage deal to be co-brokered. And some commercial firms also don’t work with “outside” brokers.

          So residential practitioners aren’t the only ones that would be affected by the elimination of dual agency. This issue goes way beyond just being customer-focused.

    • Bill Gassett June 19, 2019 at 12:57 pm - Reply

      Sorry but you are totally uniformed on how dual agency works – YOU CANNOT by law give either client advice which is the whole point of why dual agency is bad for consumers.

      It sounds like you are just another agent who gives advice illegally.

  26. Chris evans June 18, 2019 at 10:17 am - Reply

    I have been a real estate broker for about 38 years. This article and comments from the writer grossly mischaracterize real estate agents as greedy and unknowledgable (“MOST agents don’t know the laws in their own state”). There also appears to be very poor portrayal of all of the work that agents do throughout the entire tranasaction, not just “negotiating the deal to get the commission, or double commission’, or that their only duty is to get the seller the highest price or the buyer the lowest price as their respective agents. A buyer agent can not magically make an informed seller sell their home for less than they will agree to sell for. There are many many instances where buyer agents recommend paying a higher price, to actually get the home that the buyer wishes to purchase.
    I am offended at the unprofessional unethical portrayal of real estate agents and agency as suggested and portrayed by the writer! I have not bothered to research the writer’s actual profession but he appears to be more promoting himself, his own or primary interest and profession as likely a lawyer, on some govt agency or committee, and not a real estate professional.
    Some forms of agency, buyer agency, dual agency, designated agency, etc have only been around for a few years …Perhaps the writer can explain how for hundreds of years in our great country, how millions, or more likely billions of homes were bought and sold, and how billions of people and families happily woke up in their own home every day, without dual agency, buyer agency, etc. Perhaps before the point where some lawyers conjured up different forms of agency, every one of billions of homeowners, home buyers was taken advantage of by greedy unscrupulous real estate agents? Perhaps the writer believes that all buyers and sellers are sheep who can not manage their own affairs, and that most real estate agents are greedy unscrupulous and unprofessional and cannot do a great job, both without the careful oversight of lawyers and governmental agencies making rules and attempting to micromanage all aspect of their lives and affairs.
    I agree that it is important for agents, buyers and sellers to be informed, to understand types of agency and representation as set forth by laws and rules. Nevertheless, as a long term real estate broker, who worked professsionally for many many years, before multiple agency types ever existed, I feel compelled to say the writer is poorly portraying the real estate industry and the many professionals who provide awesome service to all of their clients and customers irrespective of the name or type type of agency that some busy body lawyers and governmental agencies are trying to regulate and micromanage.

    • Bill Gassett June 19, 2019 at 12:55 pm - Reply

      Chris you clearly have no understanding of real estate or the origins of agency. For many years there only type of agency was a real estate agent representing sellers.

      The advent of buyer’s agency and then dual agency changed all that.

      You appear to be someone who doesn’t understand the concept of why dual agency is bad for consumers and that is a shame.

      With dual agency you get no advice as a consumer – they very reason you hire a real estate agent – for expertise and guidance.

      There is a reason some states have been smart enough to ban single agent dual agency.

    • Douglas Miller June 19, 2019 at 1:06 pm - Reply

      Just so we’re clear. Before the real estate lobby came into being, fiduciary law impacted Realtors just like everyone. The concept that you can’t serve two masters was the law for everyone. Realtors have changed those laws just for them. In fact, they’ve even perverted the licensing law so that they don’t have to give the same disclosures as other professions. And if they give consumers these absurdly inadequate “disclosures” that agents and their brokers are exonerated from liability. Nearly every licensing law in every state has these types of “licensing” laws that protect licensees from their clients instead of the other way around. I am a broker and I represent real estate consumers. I also owned a title company that saw over 100,000 transactions and I can say that nearly ever single transaction I’ve seen that involved a Realtor involved some sort of breach of fiduciary duty or substantive legal violation or betrayal. You can’t train someone to handle the legal complexities of a real estate transaction with 90 hours of training. Agents are either incompetent or trained to unwittingly subject their clients to price-fixing or other self-dealing acts… I have sooo many stories.

  27. Mary June 18, 2019 at 10:39 am - Reply

    How do you view the current situation with Teams? Agents working in a brokerage under a primary agent as the “team Leader” and selling the “Teams” listings!? I hear many conflicting opinions on this. If the Team Leader is taking credit for the sale as their agents work under them and sell their listings…are they still being considered “Buyers Agents” even though they are seeking guidance from the team leader who is representing the seller!? How does Dual Agency fit into this when they are having their weekly meetings and discussing how they are going to “Go out and sell their listings”…! It’s quite confusing to the public as they assume we “All work together” yet they are independent contractors for the brokerage…..Any insight how some agency’s handle this??

  28. Tim Walters June 18, 2019 at 3:30 pm - Reply

    Designated Agency is Dual Agency in disguise! It’s worse then Dual Agency for consumers and will actually hurt the Realtor brand.

    I’ll do my best to keep designated agency from being allowed in my home state of MN. All the bigger agencies want it and are pushing the legislatures to have designated become law. Over half the Realtor agencies in MN are smaller and would be significantly impacted. Sadly most of them aren’t aware what’s going on.

    • Bill Gassett June 19, 2019 at 1:08 pm - Reply

      Totally disagree. There is a big difference! In single dual agency you have one agent trying to represent two parties each with conflicting goals – it is totally impossible.

      Second and more importantly in single agent dual agency the agent cannot give either party any guidance.

      In designated agency each party has someone representing their best interests. They CAN give advice and will be.

      Who cares if they are under the same roof? What difference does it make?

  29. Douglas Miller June 18, 2019 at 6:15 pm - Reply

    Yes dual agency is legal in Minnesota – just for Realtors. Not because it is a good thing but because the Realtors have a strong lobby. The above poster talks about dual agency as if it is workable. It is not. I represent consumers who have had problems with dual agency deals and it would seem that nearly every dual agency deal has problems. The above poster does not seem to understand the limitations dual agency imposes on his representation. According to Minnesota law, ” Dual agents may not advocate for one party to the detriment of the other.” That means not providing comps to buyers, not pointing out negotiating points or things to include or not include in the purchase offer. Dual agency means no agency.

    And designated agency is worse. Far worse. The broker is a dual agent and is supposed to be supervising the agents. The broker also gets a double fee if they can manipulate their supervision to attain an in-house deal. This is why you see so many brokers not putting properties on Zillow, Trulia, Realtor.com and doing “Coming Soon” listings. They want to sell the house to an inside agent. The seller really loses out on market exposure. Dual agency and designated agency are impossible relationships that are illegal for every other profession. It should be illegal for Realtors.

    The author needs to revisit designated agency. Here’s an article I wrote: https://www.mnbar.org/resources/publications/bench-bar/articles/2019/04/03/you-can-t-serve-two-masters.-unless-you-re-a-realtor

    • Bill Gassett June 19, 2019 at 1:05 pm - Reply

      Exactly Doug! Unfortunately, the person who made the comment above is totally uniformed. He is the perfect example of why real estate agents get sued so often in dual agency situations.

      PLEASE ANYONE READING THIS PLEASE UNDERSTAND – when you become a dual agent you are a NEUTRAL party. You cannot give advice PERIOD.

      This is the whole reason why single dual agency is so bad for consumers!!

  30. Cassie June 20, 2019 at 10:19 am - Reply

    I am selling my house in NJ. My agent is high pressuring me to accept dual agent because she has a buyer now. I mention she can work with the buyer but still only represent me. She says that cannot be done. I mention she can refer the buyer for my house to another agent (and get referral fee). She says NO ONE DOES THAT referring a buyer to a competitor. I complained to broker. He does a lot of dual agent (his NJ title) business. Should I just dump this realtor office, and how can this be easily agree to. Clearly they want to have deals inside and keep telling me I am missing all the buyers and don’t get those showings. HELP.

    • Ileri Ogunfiditimi, REALTOR, LREA June 22, 2019 at 10:43 pm - Reply

      Cassie, the agent/broker is incorrect for saying that they can’t still work with the buyer after you’ve chosen not to enter into a dual agency relationship with them. Honestly, these are the agents that are the real problem – not dual agency. I really feel that the lack of training on Agency is the root cause of the issue. 

      Nevertheless, your suggestion that your agent/broker only represents you while still working with the buyer is a good idea and perfectly legitimate. The services that would be provided to the buyer are called “ministerial services.” 

      In this instance, the buyer would be considered a “customer” in the transaction and owed duties of fair treatment and presented only with the facts about the property, legal disclosures, etc. 

      Your broker wouldn’t be able to provide the buyer-customer with any advice, assist them in negotiations, due diligence, ensure that the price is reasonable, etc. It would be good practice to communicate this to the buyer so that the buyer-customer understands their position in the deal. 

      This is also the ethical thing to do if your broker wants the buyer to be treated fairly and to avoid the possibility of future litigation due to misunderstandings. 

      It’s also a good practice for your broker to advise the buyer-customer of their option to retain a buyer broker or attorney for representation and/or advice. Some buyers are very sophisticated and can do deals on their own. Still, other buyers do deals on their own but use an attorney to review the paperwork. 

      It’s up to the buyer to decide how they wish to proceed in the transaction. It’s also a good practice to get this discussion in writing and have the buyer sign off on it along with the agency disclosure statement that your broker is legally required to provide the buyer. 

      It’s important to mention too that if the buyer-customer still chooses self-representation, AT NO SUCH TIME does this give your broker a license to defraud the buyer-customer or misrepresent the facts of the property or transaction. 

      If your broker engages in any activities that are unethical or illicit or encourages you to engage in such activities in order to close the deal, IT WOULD BE WISE for you to immediately cancel the listing and find another listing broker.

      So your deal can still be done without using dual agency and a cobroker (since your broker found the buyer on their own). Dual Agency is simply another way of working with your broker. You’re not required to do it. It’s ALWAYS optional (in states where it’s permitted)!

      So don’t let your broker pressure you into it. At the very least, you and your broker should recommend to the buyer that they retain an attorney for any further assistance. Good luck!

      • Cassie June 24, 2019 at 9:13 pm - Reply

        Thank you !!!!

      • Cassie June 24, 2019 at 9:34 pm - Reply

        How can I cancel the listing? In NJ, I understand i would not owe money, but owe time, and the length of the listing contract is 6 months. It has been 2 months already, so a long time to just let it run out. The broker has to agree to cancel unconditionally, right? I understand I can simply withdraw my property from MLS, but that leaves me in limbo until the time runs out. Any other ideas?

        • Ileri Ogunfiditimi, REALTOR, LREA June 27, 2019 at 7:08 pm - Reply

          Cassie, I’m not familiar with the laws in NJ but usually cancelling a listing only requires providing your broker with advance written notice. However, you’ll want to review the “termination” or “cancellation” provisions in your listing agreement for further guidance.

          Also keep in mind that if you cancel the agreement but sell your property to the buyer procured by your broker, you’ll still be on the hook for compensating your broker. Again, read through your listing agreement for guidance.

          Also, express your concerns about the deal to the principal broker or office manager. If that doesnt work and your broker is a REALTOR, you can try contacting the local REALTOR board or Association for assistance.

          If your broker isn’t a REALTOR, then you may need to contact an attorney for help.

  31. Gerald Frederick June 20, 2019 at 6:30 pm - Reply

    Dual Agency or Designated Agent works fine till something goes wrong. If it ends up in court, the court will treat Designated Agent as Dual Agency every time. The Broker signs the agreements, not the agent. The company represents the client. The agents work for the company. It become the client against the company. Read some of the court cases.

    • Cassie June 24, 2019 at 9:14 pm - Reply

      Thank you !!!!

  32. Dennis Hayden June 24, 2019 at 1:20 pm - Reply

    This is a little excessive in this Dual Agency explanation. It doesn’t speak of anything else we do in dual agency, set up escrow, schedule inspections, prepare inspection notices and amendments, order survey, working with the lender on financing, deal with title and survey issues, etc. It’s made to sound like we just sit around and twiddle our thumbs until the check comes in! We still have a fiduciary responsibilities to both parties, even though we cannot divulge confidential information. As long as it has been thoroughly disclosed to both parties, this may be in the best interest of both parties if a competent agent is managing the deal to insure it gets closed for both parties.

  33. David John June 26, 2019 at 1:52 am - Reply

    nice

Leave A Response