New Agent Confused with Dual Agency

[middle-aged mom]

Dual Agency is legal in all states and alive and well in Illinois. It is also the #1 complaint filed with real estate boards and the state. E&O excludes dual agency claims.

Continuing Education Ethics classes hammer this topic.

The listing agent can show the property.
The listing agent can respond to questions about the property.
When the listing agent asks the buyer a question, the relationship changes to an implied dual agency.

When an agent sits an open house for another office agent, the house sitter represents the seller.
If the listing agent refers the buyer to another agent within the same broker, it's dual agency.

They recommend referring buyers to an agent at a competing broker and not imposing a referral fee.

The brokers with the most production act as true dual agents more so than agents with less volume. They persuade both the buyer and seller that doing so, is in each of their respective best interests. There is a growing trend towards buyers executing non agency agreements.
This does not change the listing compensation agreement, meaning the seller is going to pay the agreed upon 5% ( my area) regardless of who represented the buyer.

[FalconheadWest]

I love being on both ends of the transaction. That means I did my job the best way possible. I didn't just market their property, but I actually found the buyer, and not another agent. SCORE!

My broker HATES "intermediary". He is such a freak about lawsuits. Everything is about, "but what if..." I know the risks of Intermediary and I explain it to both the buyers and the sellers. I also explain how it keeps another middleman out of the transaction so there is less "they said they said" situations.

Knock on wood, but I've never had unhappy clients when in this situation.

[LCTMadison]

Originally Posted by middle-aged mom

Dual Agency is legal in all states and alive and well in Illinois. It is also the #1 complaint filed with real estate boards and the state. E&O excludes dual agency claims.

Continuing Education Ethics classes hammer this topic.

The listing agent can show the property.
The listing agent can respond to questions about the property.
When the listing agent asks the buyer a question, the relationship changes to an implied dual agency.

When an agent sits an open house for another office agent, the house sitter represents the seller.
If the listing agent refers the buyer to another agent within the same broker, it's dual agency.

They recommend referring buyers to an agent at a competing broker and not imposing a referral fee.

The brokers with the most production act as true dual agents more so than agents with less volume. They persuade both the buyer and seller that doing so, is in each of their respective best interests. There is a growing trend towards buyers executing non agency agreements.
This does not change the listing compensation agreement, meaning the seller is going to pay the agreed upon 5% ( my area) regardless of who represented the buyer.

We have dual agency in AL, but ours is very different.

1. Listing agent can show property. At the initial contact, customer is given the Real Estate Brokerage Services Disclosure, which discloses how agents can represent in AL and the buyer's basic rights under AL real estate law.

2. We have NO implied agency. We have "limited CONSENSUAL dual agency". Dual agency has to be in writing AND agreed to by BOTH parties. If one party does not agree we would have to refer to an agent outside of the company.

3. Agency relationship does not change the commission agreement between the seller and the listing agent unless this has been agreed to in writing during the listing agreement. Its common to see a reduced commission offered to agents acting as "transaction brokers"....i.e. NO representation, basically just "assists" one or both parties, is not considered an "agent" and does not provide the same services. Basically, absolutely NO advising.

E&O does cover dual agency, but it is a higher premium.

[jackmichigan]

Originally Posted by middle-aged mom

Dual Agency is legal in all states and alive and well in Illinois.

My understanding is that Dual Agency is not permitted in some states (it is legal in Michigan). However, I feel that "Dual Agency" is a misnomer. You can't be an advocate for both sides at once. Some states have "Transactional Broker" (or "Coordinator") or "Designated Agency" in an apparent attempt to define what might be considered the role of a Dual Agent--and to limit the responsibility and liability of those agents. In the end, for better or for worse, the NAR has played a major role in the enactment of laws pertaining to real estate agents.

[middle-aged mom]

Originally Posted by jackmichigan

My understanding is that Dual Agency is not permitted in some states (it is legal in Michigan). However, I feel that "Dual Agency" is a misnomer. You can't be an advocate for both sides at once. Some states have "Transactional Broker" (or "Coordinator") or "Designated Agency" in an apparent attempt to define what might be considered the role of a Dual Agent--and to limit the responsibility and liability of those agents. In the end, for better or for worse, the NAR has played a major role in the enactment of laws pertaining to real estate agents.

Those states that have transactional brokers/agents seem to side step the dual agency issue because, as I understand it, the broker/agent does not represent either side.

[LCTMadison]

Acting as the agent for the seller, absolutely we try to avoid dual agency unless we are already in a single agency relationship with the buyer. Again, we have no implied agency in Alabama. When I answer an ad call to go show one of our listings, I RECAD them but I do want to stay a transaction broker, and most of the time that is how we act. To push agency on a customer in that situation is acting to the detriment to our client, the seller. Now, if the customer requests dual agency, at that point we must oblige.

[MikeJaquish]

Originally Posted by LCTMadison

Acting as the agent for the seller, absolutely we try to avoid dual agency unless we are already in a single agency relationship with the buyer. Again, we have no implied agency in Alabama. When I answer an ad call to go show one of our listings, I RECAD them but I do want to stay a transaction broker, and most of the time that is how we act. To push agency on a customer in that situation is acting to the detriment to our client, the seller. Now, if the customer requests dual agency, at that point we must oblige.

Interesting.

I can bring an unrepresented buyer to my sellers and not be in dual agency. And I can decline to be a dual agent.

[LCTMadison]

Let me rephrase that.....we CAN oblige to act as a dual agent (but again, both buyer and seller have to agree in writing, in AL it is consensual) or refer the buyer to an out of company agent, because the rights of the buyer to the level of representation they want trumps how the agent prefers to service the client.

At that point the buyer would need to choose how to proceed....stay with agent as transaction broker or take referral/seek out other agent for the representation they seek. In the latter, where buyer seeks out agent without referral, you've got a big procuring cause issue.

There are some agents that strictly offer transaction brokerage. And there are some agents that strictly offer single agency for a buyer by not listing properties in their company (and they are not extremely successful either).

I've been a dual agent about three times in the past 8 years.....that is the perks of a small company. All three times I already had an agency relationship with the buyer and my broker listed a property that fit exactly what they were looking for. Hairy....yes, but with how our company is structured and our policies in our office in regards to what is disclosed to me about sellers/seller situations we are better able to navigate a delicate situation. I'm not told any "confidential" information that my broker would not tell any other outside agent in regards to our listings, that way I can honestly state "I don't know" and I don't have to lie.

[tanman]

Originally Posted by middle-aged mom

Dual Agency is legal in all states and alive and well in Illinois. It is also the #1 complaint filed with real estate boards and the state. E&O excludes dual agency claims.

Continuing Education Ethics classes hammer this topic.

The listing agent can show the property.
The listing agent can respond to questions about the property.
When the listing agent asks the buyer a question, the relationship changes to an implied dual agency.

When an agent sits an open house for another office agent, the house sitter represents the seller.
If the listing agent refers the buyer to another agent within the same broker, it's dual agency.

They recommend referring buyers to an agent at a competing broker and not imposing a referral fee.

The brokers with the most production act as true dual agents more so than agents with less volume. They persuade both the buyer and seller that doing so, is in each of their respective best interests. There is a growing trend towards buyers executing non agency agreements.
This does not change the listing compensation agreement, meaning the seller is going to pay the agreed upon 5% ( my area) regardless of who represented the buyer.

OMG...get a grip and read your real estate 101 book on real estate that you took your test on! Dual agency is NOT what you have stated above.

Dual Agency is defined the same in every state. When you have a legally binding contract representing a seller AND you have a legally binding "Buyer Broker" contract with the buyer = Dual Agency.

Dual Agency is NOT when you are at your office and a potential buyer calls you on the phone or walks in your office to ask questions on that same property. You are still a Seller's Agent.

Dual Agency is NOT when you waste your time at an open house because you over priced it to get the listing and the nosey neighbors come into the property to see the home.

Anyone has any questions, feel free to ask me. Dual Agency is not defined differently in each state.

[Silverfall]

Originally Posted by tanman

OMG...get a grip and read your real estate 101 book on real estate that you took your test on! Dual agency is NOT what you have stated above.

Dual Agency is defined the same in every state. When you have a legally binding contract representing a seller AND you have a legally binding "Buyer Broker" contract with the buyer = Dual Agency.

Dual Agency is NOT when you are at your office and a potential buyer calls you on the phone or walks in your office to ask questions on that same property. You are still a Seller's Agent.

Dual Agency is NOT when you waste your time at an open house because you over priced it to get the listing and the nosey neighbors come into the property to see the home.

Anyone has any questions, feel free to ask me. Dual Agency is not defined differently in each state.

I think you are misreading MAM's post. MAM is stating that in the ethics classes, the instructors are reinforcing those points for clarification for agents. If you read the OP's post first, then hers, her post makes a lot of sense in trying to clarify confusion for the OP.

Technically we don't have dual agency in Oregon. We have disclosed limited agency which is just a step above transaction agency. It is very limited representation to both sides. There is no ability to fully represent both sides in Oregon, which is what I think of when I hear dual agency.

Colorado doesn't have dual agency. They have buyer agency, seller agency, or transaction brokers which represent neither party. Oregon will be going that way soon I am sure.