Being a dual agent — it’s a seemingly harmless thing that appears to be an extremely profitable deal incorporating the best of both worlds.
But is it? Have you ever thought about dual agency from the point of view of buyers and sellers? Let’s think about the buyers’ and sellers’ perspective now.
There was a time when the two parties involved in a property deal, the buyer and seller, went for dual agent agreements to streamline the property transaction, ease communications, gather more information about the property and possibly pay less commission.
It only took consumers so long to realize that the conflict of interest surpasses all the benefits of appointing a dual agent.
This article is about why you should drop the idea of being a dual agent or why it is time for a slight career change if you are already one.
Here are the factors taking the parties away from dual agency, or in your case, proving to be a strong kick in the stomach:
1. Dual agents cannot be a brother to both parties
For an agreement that relies on nondisclosure, it’s difficult for the agent who is catering to both buyer and seller to withhold information from the buyer just because he or she is following the secrecy deal with the seller.
2. The ball is in the court of one party
The dual agent is working to get the best deal for both the parties. But when the motives of each party are contradictory — for the buyer to get a lower price and the seller to get a higher price — one party will lose.
What usually happens is that the dual agent signs the contract at the same time — a contract that marks the time of buyer-agent and seller-agent agreement — with both parties.
And to close the deal in the limited time period, either the buyer agrees to pay a little extra or the seller agrees to get a little less than the price quoted.
3. The incentive factor is no longer a secret
For someone who works for both the parties, the logic is that the dual agent will get incentives from both parties. For the party who has the possibility of getting less than what they deserve, this can be a major factor.
4. Dual agency binds the parties
In the event that a buyer or seller files a lawsuit, he or she will have just one broker’s office to sue, and the fact that dual agents are not allowed to share confidential information but are allowed to give confidential advice only makes the legal situation worse when someone files suit for breach of contract.
5. The thin line of agent identity is crossed without the parties’ knowledge
It’s difficult to judge when the agent is behaving as a buyer’s agent and when he or she is on the seller’s side. The time it takes to be sure that the parties’ (buyer/seller) best interests are met is much greater than the time it will take to find individual representation.
It’s less commission, but it’s also less hassle and better for long-term relations to be a single agent representing one party.