BUYERS BEWARE of Dual Agency When Buying a Home

Depending on the state where you’re buying a home, laws related to agency and real estate representation can be different. The real estate agent you’re working with will probably not be your agent in the legal sense of the term in most states. They will be called something like a representative or some other term that does not require the full duties of a legal agent.

This article isn’t about full agency, so the legal details aren’t necessary. Whatever your real estate professional’s level of responsibility, you should expect to have them working with your best interests at the top of their list of duties. Whether the listing agent who is working for the seller is a full legal agent or not isn’t important to this discussion either. Whether your contract or other paperwork in buying a home calls your agent a “dual agent,” or a dual representative, or some other term it means they’re working for both you and the seller.

The financial motivations of the real estate professional help to explain why you want to avoid dual representation if possible. They’re humans, and human beings can with the best of intentions still be influenced by the financial aspects of a deal. Real estate people love to sell their own listings or those of their brokerage. It makes the company look good, but the big thing is that the brokerage and the agent will double their commission by representing both sides.

If you were working with an agent from another brokerage, the two companies and agents would be splitting the commission. So, think about working with the listing agent as a buyer. It can be very difficult for that agent to play hardball or even take a strong negotiation position on your behalf. Doing so could kill the entire deal and leave them with no compensation at all. There is a lot of pressure to get the deal done.

Dual Agency — We love this little comic by Remax Agent Bill Gasset in Massachusetts

This is not intended to criticize the agents involved, nor to assume any intentional wrong-doing. This is a discussion of human nature and how to avoid putting yourself in an inferior negotiating position. In dual representation situations, there is usually a disclosure provided to both sides explaining it and your choices. You may be able to elect to have another agent work on your behalf, and they would not share information with the listing agent.

At any rate, agents love to show their brokerage’s listings first, so always know if you’re looking at a home that is listed by the same brokerage as the agent working with you. If it turns out to be one you want, start asking about dual representation and your options. Another approach guaranteed to protect your interests would be to work with a dedicated buyer agency brokerage that doesn’t take listings.

Are You thinking of buying a Home in Tampa Bay?

Use our site to search homes for sale in Tampa Bay and all of our surrounding areas. Unlike the “big name” sites out there, our site is directly connected to our local MLS and is updated EVERY HOUR. By creating a Property Manager account you can stay on top of the newest homes for sale and get Price Change alerts so you can stay ahead of other buyers and beat them to the BEST deals!