Is Dual Agency Legal - Or Not? (short sale, real estate) - Tampa Bay - Florida (FL) -Tampa - St. Petersburg - Clearwater - City-Data Forum

MortonR · 05-30-2011, 05:15 PM

We recently made an offer on a home, doing so directly to the selling agent, as we do not currently have an agent (we do have a real estate attorney involved with us on a day-to-day basis.)

The seller's agent wanted us to sign an "exclusive buyer brokerage agreement" to represent us in the transaction.

As one might expect, our attorney advised us not to sign this and said it was unnecessary - and it could even force us to bear some of the commission costs should the seller not be able to pay them, according to our attorney. Being informed consumers and veterans of a number of real estate transactions, we had no intention of signing it anyway.

I am wondering if this would not be the same as dual agency, which I understood to be illegal in the State of Florida.

Anyone in the business care to comment?

RM

crazynip · 05-30-2011, 05:38 PM

Absolutely, you do not have to do this, you will save 3% in the process. By law they can charge (up to) 3% commission on each end of the deal, seller agent and buyer agent. If there is no buyer agent, he gets 3%, he wants 6%. He cannot force you to sign with him. I suppose he could not take your contract, but he would be an idiot to do that in this economy.

Oh, and dual agency is not illegal in FLA

MortonR · 05-30-2011, 05:45 PM

Dual agency opens up some serious ethical dilemmas, I would think. I thought I had read a while back that it was illegal in Florida, however, the law may have expired.

I was just surprised by this, as I can't see how the agent can have a fiduciary duty to the seller and also represent the buyer in good faith.

To me it seemed like an attempt just to get more commission out of the deal....

RM

crazynip · 05-30-2011, 06:06 PM

Quote:

Originally Posted by MortonR

Dual agency opens up some serious ethical dilemmas, I would think. I thought I had read a while back that it was illegal in Florida, however, the law may have expired.

I was just surprised by this, as I can't see how the agent can have a fiduciary duty to the seller and also represent the buyer in good faith.

To me it seemed like an attempt just to get more commission out of the deal....

RM

Not only is it legal, the majority of transactions occur this way. I agree with your last 2 statements.

TampaKaren · 05-30-2011, 06:58 PM

Dual agency is ILLEGAL in Florida and has been for many years. The term Transaction Broker is an accepted form in which a broker can represent both parties but with limited fiduciary responsibilities. Rumors happen like this when people move here from other states and expect things to work the same way it did in whatever state they moved from. And though attorney representation is helpful, they are not required for Florida closings. You can read the legal in Chapter 475 of the Florida Statutes.

MortonR · 05-30-2011, 07:05 PM

I am familiar with the term "transaction broker", but I was wondering if what the seller's agent was attempting to pull would be considered dual agency.

The form they used was an "Exclusive Buyer Brokerage Agreement" and listed as an EBBA-5, Rev. 11/09. They checked the box on page two for "single Agent of Buyer" rather than "Transaction Broker".

As it was written, we would have been on the hook for 3% to the broker if we purchased the property.

We are aware that legal representation is not a requirement for closing in Florida, but whether it would be Florida or any other state, we would never consider entering into a real estate transaction, or any transaction of such magnitude, without legal representation. To do so would be foolish, in our opinion.

RM

TampaKaren · 05-30-2011, 07:10 PM

A broker cannot have an exclusive with both buyer and seller in the same transaction. It's hard for me to say because I'm sure there's something more to the story. Sorry this happened to you...it was not right for sure.

MortonR · 05-30-2011, 07:12 PM

Would it matter if it was a short sale?

I don't see what difference it makes, quite honestly.

RM

TampaKaren · 05-30-2011, 07:21 PM

Agency is already written into the law so no, it doesn't matter. In a short sale, the seller has little to no money to put into the sale so broker fees, lien releases, taxes, etc. each reduce the amount the bank receives. A buyer I represented recently received a counter offer asking for $2500 toward the seller's attorney fees. It sounds to me like they're fishing for more money to put into the sale at your expense. Keep asking them questions until you get a clear answer.

MortonR · 05-30-2011, 07:24 PM

Well, it is a short sale, and yes, I suspect this was an effort to cover the possibility that they may not receive a full (3%) commission from the seller after all is said and done. On the advice of our attorney we refused to sign the agreement. We are aware of the potential for all of the costs not being covered depending on what the bank wants out of the deal.

A questionable situation in my opinion...just another good reason to have a competent real estate attorney involved in the process.

RM