While dual agency is allowed in almost every state in the U.S., Team McMurray doesn't suggest it. There is an old adage that says one cannot serve two masters. In our opinion, that's exactly what happens in a dual agency relationship.
We know that many — but not all — professional real estate brokers and agents will disagree with our opinion, but let's face it: Can one agent really represent both the buyer and the seller?
A recent case needs to be carefully analyzed. In Horiike v. Coldwell Banker, the California Supreme Court held that if a real estate brokerage company represents both buyer and seller, it owes a fiduciary duty to both sides.
The case (which you can easily search on the internet merely by typing “Horiike”) involved an agent who was hired by the seller but worked for Coldwell Banker, which represented the buyer.
According to the court, “It is undisputed that Coldwell Banker owed such a duty to the buyer. We now conclude that the associate licensee, who functioned on Coldwell Banker's behalf in the real property transaction, owed to the buyer an ‘equivalent' duty of disclosure.”
The court reminded the real estate industry that dual agency “is a relatively recent development” and that “the statutory law permits dual agency provided that real estate agents both inform their clients of the agency relationships involved and obtain the clients' consent.”
In general, wherever dual agency is involved, the laws require that dual agents are not allowed to disclose to a buyer that the seller is willing to sell at a lower price without the consent of the seller, or vice versa — a dual agent cannot tell the seller that the buyer is willing to pay a higher price without the consent of the buyer.
Buyers often call us naively hoping we are the listing agent. We shockingly interject "Why would you want to do business with them!" While it is legal, we are personally opposed to the concept of a dual agency agreement. If you do make that choice, be very careful about what you tell the agent. He or she also represents the other side (which likely has the goal of selling for the highest price.)
Imagine that you are in the process of buying a new house, and have entered into an agreement with a real estate agent. Say that agent then asks if she can list your current house for sale. This might sound like a good deal, but is it? You want to get the best price for your house, but even with the most ethical agent, the temptation is to achieve a quick sale.
Most agents are hardworking, honest and ethical, and do a respectable job for both buyers and sellers in different sales transactions. This doesn't mean they will perform better by working both sides of one sale. Find an agent who has YOUR best interest in mind.
See the original article from the Chicago Tribune, "Can 1 realty agent work for both buyer and seller?" by Benny L. Kass, Housing Counsel.