Question: Should I purchase a home that my realtor is also selling? Could there be a conflict of interest?
Answer: This question refers to dual agency, where the agent representing you is also the seller’s agent. This is what’s known as a dual agent. Since the agent is on both ends of the transaction their role in it is diminished.
“It is difficult and confusing to have an agent suddenly become the gatekeeper on the other side of a transaction, and there have been cases argued in the courts about where the agent’s loyalties should lie in this situation. Some customers feel their broker should have a duty of loyalty only to them, especially if the home buyer or seller has worked with a broker or real estate salesperson for quite some time, ” says Ilyce Glink and Samuel J. Tamkin
Real estate agents learn about their clients’ likes, dislikes and financial ability over time. They probably know the most a client can afford and if there are any trade-offs they would be willing to make.
Knowing all of that information, you could say it is hard for the realtor to stay neutral in a dual agency situation. The best case scenario is that your dual agent does not provide any personal info about the buyer to the seller and vise versa.
Is there a conflict of interest? Many people tend to think so. In a dual-agency situation your buyer broker won’t be able to give you advice that they would generally provide if they were not the listing broker. They might not even be able to tell you if they think it’s the wrong house for you.
If you cant get the advice you are looking for, what are you getting? In these dual-agency situations you get a middle person that will not give or help you with your purchase. Quite ofter you will see agents refer buyers to a different broker. Doing this allows buyers to have someone in their corner looking out for them. The seller has their agent looking out for them as well.
Frequently however, buyers and sellers are left with a bad taste when they have worked with a trusted agent for a long time and then are left to be helped by someone new. Many realtors have their clients agree to a dual-agency situation early on in the process. Typically neither the buyer or the seller are prepared for what comes next. The agent that handles the transaction suddenly stops giving advice and buyers are left alone to negotiate the price.
Figure these complexities out beforehand. Before you hire a broker, understand what they will do for you if you end up in a dual-agency situation.
If you are buying, the agent can find a different agent in the office to represent the seller. If the agent is unwilling to do that (maybe he or she has an even longer-term relationship with the seller), then require the agent to find you another agent to help you close the deal. A final option is to simply take a pass on the home. (Easier said than done in tight markets, we know.)
Finally, if you decide to proceed in a dual agency situation, get yourself some backup. Hire a real estate attorney to look out for your best interests, and, if you live in an area where real estate attorneys are not used for residential deals, find someone knowledgeable about the market to help you out. Otherwise, you’ll have to think about this home as if you were buying it on your own without any help from an agent or broker.
Source: The Washington Post – Read Full Article Here
Kara L. Stachel, Esq. is an experienced Fort Lauderdale real estate attorney. Ms. Stachel is admitted to the Florida Bar and the New Jersey Bar, and is a member of the Florida Bar Journal’s Editorial Board, American Bar Association, Commercial Real Estate Women Network, and Real Property, Probate and Trust Law Section of the Florida Bar.
Stachel Law’s real estate clients include lenders, brokers, investors, consumers, sellers, and real estate agents, all of whom are counseled and represented throughout every step of a legal matter. The firm provides clients with extensive experience in complex real estate transactions and litigation.