Can a Realtor Represent Both the Seller and Buyer in a Transaction?
To date dual agency is not uncommon, so let’s dig into the ins and outs of what you should know about it when you set out to sell the house.
Typically as you go through the process of selling your house, the agent you partner up with assists you and only you throughout the course of the transaction. This single agent has what’s called a “fiduciary responsibility” to uphold your best interests in good faith and trust. In the event that the seller’s agent (your agent) also represents the buyer — that’s called dual agency and it works differently.
The “dual” agent handles all of the communications, paperwork, and negotiations between both parties and is supposed to remain neutral as the facilitator of the deal with no fiduciary duty to either side. However, dual agency could be seen as creating an inherent conflict of interest, so it comes with special disclosure requirements.
Dual agency has drawn scrutiny and in January 2019 a consumer watchdog group published a report pushing the states to prohibit the practice. However, to date dual agency is not uncommon, so let’s dig into the ins and outs of what you should know about it when you set out to sell the house.
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Is it possible for an agent to represent both sides of a transaction?
“Agents can act as a dual agent. But you need to have the consent of both parties in writing beforehand, and the agent has to become a neutral party representing both clients,” says Mikel DeFrancesco, a top-ranked broker in Quincy, Massachusetts.
But that commitment to stay neutral gets tricky: Say the appraisal comes in and the buyer asks for a $10,000 price reduction. Next, the home inspection notes your roof’s age and other minor repairs needed, so now the buyer’s demanding a roof credit and other concessions.
And just when you think the deal’s finally done, the buyer abruptly asks that you cover all closing costs.
Suddenly you’re left feeling like you’re getting a whole lot less money for your house than it’s worth, and you’re wondering if you would have been better off with an agent who you could trust would try to negotiate the terms of the deal in your favor.
When one person is trying to work out a “fair” deal for both the buyer and the seller, it’s possible for both parties to walk away feeling like they got the short end of the stick.
“I don’t think that’s a reasonable expectation, trying to represent both the buyer and the seller fairly,” says DeFrancesco. “That’s why there’s a movement building to prohibit it nationally. I know that my company in Massachusetts doesn’t allow it, I think for good reason.”
