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By Jakob Jelling
Historically, real estate agents have represented the seller of a property.
The seller, after all, is usually the one who pays their commission, and
agents therefore have a fiduciary relationship with the seller. This in no
way means that agents may operate outside the bounds of the law and ethical
conduct of course. It just means that the real estate agent is just that, an
authorized agent of the seller for a particular transaction.
More recent trends have introduced buyer`s agents, who usually work on a fee
basis exclusively for the buyer, and dual agents. Dual agents represent both
seller and buyer, particularly in cases where the agent`s company is the
listing company. Dual agency is legal in most U.S. states; however, most
consumer advocacy organizations recommend against using a dual agent. This is
because there is an inherit conflict of interest for the agent - they receive
a commission based on the selling price of the property. The higher the
price, the higher their commission, so their reasoning is that dual agents
never really have the buyer`s best interests at heart.
If you`ve decided to work with a dual agent, this will need to be disclosed to
both the buyer and seller, and they both have to agree, in writing. Dual
agents are bound by law and ethics to treat both buyers and sellers honestly,
equally, and fairly. Dual agents can be prevented from divulging confidential
information about each party to the other. This could severely harm
negotiating positions.
The bottom line in dealing with a dual agent is to remember that the buyer and
seller have conflicting interests in the price and other terms of the sale.
It`s very difficult for an agent to truly and equally represent both parties,
since the conflicting interests make that inherently impossible. If you do
choose to use a dual agent, be sure the exact nature of your relationship
with the dual agent is clear, know what services the agent will be performing
for you during the transaction, how the agent will be paid, and how any
conflicts that arise will be handled.
Jakob Jelling is the founder of http://www.cashbazar.com (http://www.cashbazar.
com). Visit his website for the latest on personal finance, debt elimination,
budgeting, credit cards and real estate.
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