How you should deal with Dual Real Estate Agents?
Dual real estate agents represent both buyer and seller. The concept of dual agency is legal in most U.S. states. However, most consumer advocacy organizations recommend against using a dual agent - reason being the existence of an inherit conflict of interest for the agent. Real estate agents receive a commission based on the selling price of the property. The higher the price, the higher the real estate agent's commission, so the reasoning of these organizations is that dual agents never really have the buyer's best interests at heart. The case could also be vice-versa - the agent could be in a position to manipulate his seller into selling the property at a given price because he has a buyer ready to buy at that price.
Given the drawbacks of using a dual agent, should you even consider using the services of one? Well, there are laws governing the practices of dual agents. In spite of the disadvantages mentioned, if a dual agent is able to get you a good deal there shouldn't be a reason to stop you.
A dual agent needs to disclose to both the buyer and seller that he is representing both parties and both have to agree, in writing. Dual agents are bound by law and ethics to treat both buyers and sellers honestly, equally, and fairly. Dual agents can be prevented from divulging confidential information about each party to the other as it could adversely impact negotiating positions.
When you're dealing with a dual real estate agent, you need to remember that the agent's primary objective is to close the deal - a difference in price margin to you is not going to impact his real estate commissions as much. It's very difficult for a dual agent to truly and equally represent both parties, since the conflicting interests make that inherently impossible. As a buyer or seller, you would need to be more alert and be in a position to make the right decisions for yourself.
Be sure the exact nature of your relationship with the dual agent is clear and have him mention what services he will be performing for you, how he will be paid, and how any conflicts of interest that arise during the transaction will be handled.
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