Fiduciary duty vs. dual agency
Letter to the Editor
By Inman News, Friday, August 20, 2010.Re: 'Fairness in dual agency' (March 1)
Dear Editor:
Dual agency, on its face, is a conflict. As a fiduciary, my job is to do the best for my client. For a buyer, that usually means the lowest price, the longest contingency time frames, and the most repairs I can negotiate. The seller, on the other hand, who a dual agent owes an equal duty to, wants the highest price, the shortest contingency time frame and "as is" sales.
So, how can I represent both of them equally? Yes, I can be in the middle, but that is not the job of a fiduciary.
Guy Berry
Keller Willams Realty
San Jose, Calif.
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Submitted by Bruce Hahn on August 20, 2010 - 1:33pm.
Mr Berry has it right. Put another way, dual agency doubles the incentive to put the deal ahead of the best interest of either client. Which client actually receives some fiduciary consideration in such circumstances (if either) can then be no more than a matter of speculation.
Bruce Hahn
American Homeowners Grassroots Alliance
Submitted by Ken Lampton on August 20, 2010 - 3:08pm.
In Texas we have a law that permits a broker to act as an "Intermediary." The buyer and seller can agree to let one broker (or his assignees) work with both of them. While I am not qualified to describe this system the way a lawyer would describe it, it seems an essential part of the idea is that each party consciously releases the broker (in writing) from some of his fiduciary duties. Assuming both parties had a good understanding what they were getting into, I don't believe this introduces any insufferable ethical problems for the broker.
A broker who is "a cheater" will look for opportunities to cheat, whether he is working as a fiduciary for the seller or for the buyer. If he is working with both of them, he will cheat then, too. But I like to think the cheaters are few and far between. I think most brokers sincerely want to live up to all their fiduciary duties.
Ken Lampton, CRS
RE/MAX About Dallas
www.m-street-dallas.com
Submitted by Tyler Webb on August 20, 2010 - 7:43pm.
Yep, it really is as simple as Mr. Berry puts it. Period.
Tyler Webb
Associate Broker
Champion Realty Inc
Annapolis, MD
www.recrab.com
@recrab
Submitted by randye britt on August 20, 2010 - 8:34pm.
well, let me type real slow , if you dont want to be a dual agent then dont, if the buyers and sellers are such that they both are presenting issues then give one away. i have completed dual agency representations successfully and just recently refered a buyer to another competing agency. the dual agency transaction featured a seller who had a bottom line which was presented to the buyer so that the buyer and their lender made their decisions to purchase. the other featured my investor flipper seller with a bottom dollar that i knew and a firsttime buyer with a partner who was absolutely determined to live in the house.the list price was way over the bottom line. now as to you transaction brokers or intermediaries that want to maintain an "arms length" for your transaction. well watch NCIS or CSI, at the end of the arms usually lives the hands which have fingerprints. now even though you claim to not be a fiduciary do you go over,analyze or calculate the numbers on the HUD-1 ,well does that makes you a ? pick a word. if you get a check then you are responsible for something in the transaction, get over it or sell insurance.
Submitted by Priscilla Senecal on August 21, 2010 - 3:02pm.
Dual, designated, intermediary, transactional, etc. - whatever you call it, the whole point is so the brokerage can get the money from both sides when both sides want representation. Too bad the buyers and sellers don't understand that their agreement to "dual" just got their agent neutered and lost them the agent's advice and counsel.
Submitted by Marika Choma, Qualifying Broker on August 22, 2010 - 8:22am.
The problem starts with dual facilitator still being called a Dual Agent. This is of itself, a misnomer and not only is it impossible, but continues to add to the confusion.
Fiduciary duty only occurs with a fully executed, written Agency Agreement... not with any other representation relationship.
Does this mean you practice any differently? No. If your practice is one built on integrity, honestly, expert knowledge and ability... this remains unchanged, regardless of the relationship stipulated by the Buyer/Seller.
That fact is, that full disclosure is required to both parties, that a Dual "Agent" does not represent either party... that the Realtor pulls back to a position of intermediary and facilitator of the Transaction, for the purpose of arriving at Closing, as smoothly and effortlessly as possible. Ethics, Accountability, Honestly, Integrity, Knowledge, Obedience... are all still there. The focus is however, changed. It changes from being placed on representing the client... to being placed on "representing" the transaction... serving both Buyer and Seller from a position of neutrality.
Excellent communication skills are paramount as is a clear understanding of boundaries. The Dual Representation position is not for everyone... and if you find yourself in doubt about it in any way... it is best not to engage in it or offer this as an option to a transaction. However, there are those practitioners who are very capable in this area. The defining point is that in this position, do not represent either the Buyer or the Seller. This must be fully understood, communicated and integrated with all parties in agreement before proceeding down this road.
The first thing that would help this along, is that the term, Dual Agent... be eliminated. This is long overdue. It speaks of an impossibility and is incorrect. The term needs to be along the lines of "Dual Representation" or better yet, "Transaction Facilitator".
TAOS REAL PROPERTY
"The Fine Art of Real Estate in Taos, New Mexico"
Marika Choma, Qualifying Broker
marika@taosrealproperty.com
104 La Loma St.
Taos, NM 87571
tel: 575-758-4004
www.taosrealproperty.com
Submitted by Debra Gambill on August 22, 2010 - 12:03pm.
I completely agree with Marika Choma in her assessment of "Dual Agency". My local market is bombarded with part-time Realtors and if I did not represent both Buyers and Sellers, we would not sell anything.
The first thing to remember is that our job is to sell the property. Doing so with honesty and integrity while providing both parties documented data should not compromise either Buyer or Seller. We are the facilitator who removes the obstacles and brings the negotiating to a close. Knowledgeable agents should be able to do this without the parties involved feeling lack of representation.
If we policed our own industry and required some minimum standards for continuation of a sales license, perhaps we would not be having this conversation.
CENTURY 21 EMPIRE REALTY SE
Debra Gambill, Owner
Portsmouth, OH 45662
740 354-2112
Submitted by Paul Howard on August 23, 2010 - 3:57am.
A question for randye britt: You said, " i have completed dual agency representations successfully". By successful do you mean that no one complained? Or, do you mean that you helped the buyer negotiate the lowest possible price and (simultaneously) helped the seller get the highest possible price? Success is in the eye of the beholder. How do you measure yours?
A comment for Debra Gambill: "The first thing to remember is that our job is to sell the property."
No, it isn't. My job is to represent my client and to help them buy a home. There is no "the property". There is a multitude of properties and my job is to help find one (from among many) that fits their needs and to help them buy it at the lowest possible price.
I commend Guy Berry. I do not commend those who would use commenting to try to confuse an issue that he has stated accurately and clearly.
Paul Howard, Broker
NJHomeBuyer.com Realty
Cherry Hill NJ 08002
Submitted by jim canion on August 23, 2010 - 4:44am.
Jim Canion ,Co-Founder
http://www.connectrealty.com
If I am buying or selling a home I am not looking for a facilitator,or a mediator,
or someone who thinks their relationship becomes a fiduciary only by the terms
of a written agreement. I would like someone who has only my interest in mind
for every decision.I only want my deal to close if I am fully represented by a talented, experienced and loyal realtor. Otherwise I probably got a much less favorable result on most matters.(Screwed).
When I need a mediator or facilitator I can hire one for ten dollars an hour and that's what your services are worth when you become one. If you expect
me to pay big bucks for your services I want to feel like I got someone who
Is willing to fight for me and not for "the deal"...
Thank You..
Jim Canion
Submitted by Marian Bennett on August 26, 2010 - 7:06am.
Marian
http://mariansbennett.com
http://BreakingCoastsideNews.com
This continues to be an emotionally charged topic in our industry. I believe that is due to the lack of consistent interpretation (not clarity). It is very clear to me, as it is to Guy and others here.
Submitted by randye britt on August 29, 2010 - 3:34pm.
mr howard success in a transaction is not the lowest price, otherwise when you represent the buyer and the seller has made thousands on the transaction as evidenced by the bottom line on the HUD-1 then have you had a successful transaction. or did you fail to bargain for more price reductions for your buyer because you were afraid the seller would tell your buyer to take a hike. .
no, the success of a transdaction is that all applicable laws were followed,all documents and disclosures are signed,payment is received and distribvuted and the buyer has the keys.at that point all parties have achieved their objectives.