Sometimes I feel like a dinosaur in the real estate world. The reason I say that is that one of the single biggest pet peeves I have as a Realtor is that I ADAMANTLY want consumers to have an “advocate” on their side during every real estate transaction. I am not sure advocate is a strong enough word… perhaps “protector” is a better word. But because of that I am definitely not a fan of “dual agency.”
Dual agency is where one agent “represents” both the seller and the buyer in a real estate transaction. I put represents in quotes, because representation truly doesn’t occur. All of the things you probably want from your REALTOR goes out the window with the signed dual agency disclosure.
The original idea of of dual agency was designed to allow an agent who ALREADY has a relationship with both parties in the transaction to work with both parties in the transaction. It was NOT designed to allow agents to fish for unrepresented buyers so that the agent can keep the commission for both sides of the transaction. Even under these circumstances dual agency is problematic at best.
I was about to break down the Virginia law and add some commentary about it… but I just found where Jim Duncan down in the Charlottesville area has already done it on his blog. So, I am going to quote his post below, but I want to give credit where credit is due and link to Jim’s Blog as well. He has done a fabulous job with his blog over the years, and it is a super worthy read. Click here to visit Jim’s RealCentralVA.com blog.
QUOTING JIM DUNCAN’S BLOG….
Single Agent Dual Agency will be allowed, so long as the following disclosures are made:
The disclosure shall contain the following provisions:
1. That following the commencement of dual standard agency, the licensee will be unable to advise either party as to the terms, offers or counteroffers; however, under the limited circumstances specified in subsection C, the licensee may have previously discussed such terms with one party prior to the commencement of dual standard agency;
2. That the licensee cannot advise a buyer client as to the suitability of the property, its condition (other than to make any disclosures as required by law of any licensee representing a seller), and cannot advise either party as to repairs of the property to make or request;
3. That the licensee cannot advise either party in any dispute that might later arise relating to the transaction;
4. That the licensee will be acting without knowledge of the client’s needs, client’s experience in the market, or client’s experience in handling real estate transactions unless he has gained that information from earlier contact with the client under the limited circumstances specified in subsection C; and
5. That either party may engage another licensee if he requires additional representation.
B. Such disclosures shall not be deemed to comply with the requirements set out in this section if (i) not signed by the client or (ii) given in a purchase agreement, lease or any other document related to a transaction
Translated:
1 – The agent can’t tell you about price, terms, etc, but may have already (and probably has) advised the opposing party
2 – The agent can’t tell you anything about the property that’s useful or isn’t something you don’t already know.
3 – The agent is an impartial advisor (rather than an advocate for one party)
4 – The agent doesn’t and can’t know anything about the clients wants or needs.
5 – Get another agent to get actual representation.
