Navigating the real estate market can be complex at times. Both buyers and sellers are looking for ways to find the best deal. Here we are going to discuss how the goals of buyers and sellers can sometimes merge through the concept of dual agency.
A dual agency occurs when the same agent represents a buyer and seller. Generally, this creates a conflict of interest when completing a real estate transaction. It’s almost impossible for an agent to remain neutral and avoid acting more favorably for a buyer or seller while finalizing the terms. Another common situation when dual agency occurs is when an agent represents both a tenant and landlord during lease terms.
The Basic Concept of a Dual Agency
When you hire a real estate agency, you have the option to choose a dual agent. If you don’t have any issues with dual agency, you can sign a disclosure form, depending on the state that you reside in. Be aware that many of these disclosure forms may contain hidden language regarding an agent/ client relationship. Dual agency is not permitted in Colorado, Alaska, Texas, Kansas, Wyoming, Oklahoma, Florida, and Vermont. There are no exceptions allowed for a dual agency in some states, even by accident, e.g., in situations where someone is searching for a home and eventually finds out that the house is listed through the same agency.
When Is a Dual Agency Beneficial?
Many real estate analysts point out that dual agency can be beneficial because it helps the communication process run smoothly and also leads to faster transactions. Analysts also point out that sometimes dual agency is inevitable when many agents are working in a small area or if a large real estate firm has several agents working in the same region. If you are looking to buy new construction, dual agency can happen without you even realizing it. If you inquire about an open house, you may be vulnerable to a dual agency situation. Be cautious of online listings as well, as you could easily find yourself involved in a dual agency situation.
Common Benefits of a Dual Agency
You may enjoy possible savings through a dual agency. As a seller, you can save money by accepting a direct price from the buyer. The seller, the buyer, and the agent can find a dual agency situation mutually beneficial. There’s a reduced chance that the transaction might break down or be delayed as fewer parties are involved in the transaction. As a buyer, you can also gain more intimate knowledge about the property before making a final decision.
Possible Negatives of a Dual Agency
Dual agency can lead to complex negotiations. Dual agents might be unable to advocate for either party truly without any conflict of interest. With two clients that have different goals, they are left to make decisions on their own. You may have to figure out the best offer without seeking input from your agent.
Consult with Brighton Escrow Inc.
To prevent the possibility of dual agency, speak with your agent and ask if there are any potential conflicts of interest. To learn more about leveraging safe escrow services, contact the team at Brighton Escrow. We provide standard escrow services to safeguard your best interests as a homebuyer, seller, or mortgage provider.