Why Dual Agency Does Not Benefit Buyers or Sellers
When buying or selling a home, it is commonplace for you to have representation by a real estate. If you are buying a home, you want a buyer's agent. Likewise, if you are selling a home, you want a seller's agent. Your agent is there to protect your best interests. He or she is your guide throughout the transaction beholden only to you. So when you need a question answered and want an experts advice, they are there for you!
In real estate sales, however, there is a third option that real estate agents can practice called dual agency. If you are smart, this is something you will avoid at all costs. Why? With dual agency the agent, you hired to be your confidant becomes a neutral party in the transaction. It is like being punched in the mouth by the person you hired to provide you with real estate expertise.
What exactly does that mean in the real world? It means the agent you hired to look out for your best interests no longer represent you anymore. So when you find a home, you would like to make an offer on and ask your real estate agent what you should offer, by law they are not able to help you. To do so would be illegal.
On the flip side, if you are selling a home and a buyer makes an offer, your agent is also not allowed to offer you any advice. Imagine this for a moment - you hire an agent thousands of dollars, and they are not able to guide you anymore. Makes a lot of sense right? Of course not!
Well, guess who benefits? If your answer is the real estate agent, you would be correct. The only party who benefits from dual agency is the Realtor. Both the buyer and seller are left to fend for themselves.
To take the downside of dual agency one step further wait till you get to the home inspection. If you are the buyer or the seller don't expect the real estate agent to counsel you at this phase of the transaction either - they can't!
When a real estate agent practices dual agency they become a neutral party but get paid double. Is there any wonder so many real estate agents will tell you dual agency is an acceptable practice?
Dual agency has been banned in some states. Unfortunately, however, there are quite a few states where it is perfectly legal. That doesn't mean you should agree to it though!
Real Estate agents are required by law to explain dual agency to both a buyer or a seller. More often than not dual agency starts with a seller. If you are going to be selling your home, make sure you reject dual agency outright. Tell your real estate agent you only want them to work for you. Remember you are paying them a ton of money to sell your property. Why on earth would you want them to become a neutral party?
To be clear your real estate agent can still show a buyer your home and remain a seller's agent. They do not have to become a dual agent. The smart thing to do is insist that your agent represent you and you only.
If your agent happens to procure a buyer they can refer the buyer to another agent in their offer who can assist them. In the link at the top of the article, you will see exactly how dual agency works. Make sure you understand it completely. Dual agency does nothing to benefit you.
Community news via WN by massrealty
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