Most snafus in a transaction happen because for some reason the buyer thinks he is being represented by the agent he is working with. This may or may not be the case.
Unlike a buyer’s attorney who must represent the buyer exclusively in the sales transaction, the buyer’s agent, if associated with a company that also represents sellers (lists property for sale), can also function as a dual agent. A listing agent can also function as a dual agent.
A typical dual agent situation usually happens one of two ways. The first is when an agent that is representing a buyer suddenly gets a listing that their buyer would be interested in purchasing. The second is when a listing agent meets buyers at an open house. If these buyers are not interested in that home they might form a relationship with that agent and ask him/her to represent them as a buyer’s agent. Suddenly, that same buyer starts to see other homes then decides that first home wasn’t so bad after all and wants to make an offer. Now that agent suddenly is a dual agent working for both parties – buyer and seller.
During the listing meeting between an agent and their new seller most listing contracts allow the possibility of dual agency.
Also, during the initial meeting an agent has with a buyer to sign a buyer agency contract the buyer also agrees to the possibility of dual agency.
In this capacity the agent cannot exclusively represent either party. They cannot favor or advocate for either party during any negotiations and function as an intermediary working for the good of the common transaction. Neither buyer nor seller has an advantage over the other.
During the next part of the process – home inspection – the same is true. The agent must deliver to the seller the buyer’s requests for repair or replacement plus a written copy of the inspection report detailing the issues at hand. Once again, the seller evaluates the requests and usually makes a counter offer through the agent and a mutually agreeable solution is found through the agent’s efforts to work for the good of the transaction.
It should be noted here also that any confidential information obtained by the agent about either party’s situation prior to the dual agent situation is required to remain confidential unless the party specifically asks that it be revealed.
In the dual agent scenario, neither the seller nor the buyer has an advantage over the other. However, for the buyer, having an equal playing field is better than the agent representing the seller only as a seller’s agent.
The buyer is best served by working exclusively with one agent that they retain as their buyer’s agent because that agent then has a fiduciary responsibility to work in only the buyer’s best interest – to get the best possible terms and price in an offer situation and home inspection situation and to help them through the entire process. Do not be misled – unless you sign a contract with the agent, you are not binding them to you.
After all, your home purchase is the largest financial investment you will make so don’t sell yourself short by thinking all the information you need is out there on the internet. Your buyer’s agent will know how to interpret it and is a local expert.
Knowledgeable buyers and sellers have the smoothest transactions – call me for a free consultation!
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