Wednesday, April 14, 2010

Real Estate Book: Question for Chapter 2-Using a Real Estate Agent

Q: My real estate agent has been showing me property for months.
He recently listed a property that is just what I am looking for.
Are there any drawbacks to using one agent in a transaction?

A: You are asking about what is known as a “dual agency”.
A dual agency exists whenever the same real estate brokerage company represents both the buyer and seller.
When you sign a listing or buyer representation agreement with an agent, you are actually retaining the agent’s entire brokerage to represent you in your purchase or sale.
Dual agency requires the brokerage company and its agents to simultaneously be an agent and advocate for both the buyer and the seller in the same transaction.
Some buyers and sellers are uncomfortable with this agency relationship. Many agents are uncomfortable with this dual agency, as well.
A dual agent has an equal fiduciary duty to both the buyer and seller which include loyalty, disclosure, confidentiality, reasonable care and due diligence.
By consenting to dual agency, an agent or brokerage company cannot favor the interests of one party over the other even with the contrasting motivations of a buyer and seller.
There are some advantages to a dual agency relationship.
If there is only one agent involved, the lines of communication are shorter and there is one less individual in the loop to filter or hamper communication between each party.
A brokerage company can legally be a dual agent only with the mutual written consent of both parties prior to entering into negotiations to purchase or sell real estate.
Read the entire first chapter of the book “Get the Best Deal When Selling Your Home” to learn more about the different types of agency relationships and listing agreements.

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