Today’s buyers often don’t feel flush financially and are looking for ways to cut costs. Shopping interest rates is one way. Buying below their means is another.

Some buyers try to make their home purchase more affordable by submitting an offer through the listing broker. This way the broker receives the entire commission at closing.

The brokerage fee, or commission, is usually paid by the seller to the listing broker. Typically, the listing is submitted to the multiple listing service where the listing broker discloses the fee that will be paid at closing to the broker that represents the buyer.

Suppose the commission is 6 percent of the sale price and the listing broker offers 3 percent of the sale price to the buyer’s broker. If the buyers have their own broker, the listing broker receives 3 percent of the sale price.

A buyer who uses the listing broker to make an offer could make it conditioned on the broker reducing the seller’s commission by 1 or 2 percent in return for not having to pay any of the commission to another broker. This would mean the seller could sell for a lower price since he’ll be paying a lower commission.

Although this may sound like a good strategy, there are reasons why it may not be a good idea. Most states have agency disclosure laws that require real estate professionals to give their buyers disclosures that explain the different types of agency relationships.

If one broker represents the buyer and another the seller, this is single-agency representation. In this case, the broker owes a fiduciary duty to the client, which is the same relationship an attorney establishes with clients. A key part of a fiduciary relationship is that the broker owes loyalty to the client. In a single-agency relationship, the agent is the client’s advocate.

When one broker represents both buyer and seller, it creates a split-loyalty relationship, which is referred to as dual agency. Dual agency is illegal in many states. In states like California that allow dual agency, it’s legal only if both buyers and sellers agree to it in writing.

In some states, like Colorado, agents can work as transaction agents who don’t have a fiduciary relationship with either buyer or seller; they can’t advocate or negotiate for either party — they simply facilitate the transaction.

HOUSE HUNTING TIP: A home purchase is one of the biggest transactions most people make. Even in states where dual agency is legal, ask yourself whether it’s more important to have your own representative who will put your best interest above all others involved in the transaction, or save a few thousand dollars on the purchase.

That’s not to say that all dual-agency transactions end in disaster. But there are limitations on what agents can do for the respective parties when they are representing both as a dual agent. They can’t negotiate on either client’s behalf. They become a conduit of information between the buyer and seller, which is not the same as working with an agent who represents you exclusively.

Most real estate agents aren’t brokers, but work under the umbrella of a brokerage firm. Many brokers choose to work for other brokers rather than work on their own. Two agents that work for one brokerage firm, even if they work in different offices or counties, become dual agents when one represents the buyer and one represents the seller in a home purchase.

So, even though there are two agents involved, it’s a split-loyalty situation and is legal only if agreed to in writing by both buyer and seller.

THE CLOSING: If two agents are involved in a dual-agency transaction, usually there’s less likelihood that your confidential communications with your agent will be communicated to the seller.

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