Following is the statement on Dual Agency from the Lousiana Real Estate Commission. Dual Agency is controversial. Some states simply do not permit an agent to act as a Dual Agent it is not legal. Some agents refuse to act as Dual Agents because it is just too difficult. Once you have spent time with a buyer and you know their financial background and they have gotten to be your friend how do you not “represent” them in a transaction. As a Dual Agent you can help arrange an Inspection of a property but you can’t advise a buyer or help them interpret the inspection; as a Dual Agent you can provide comparables for a buyer but you can’t review the comparables with the buyer. You are a DUAL AGENT in the middle between a buyer and seller and neither is your client. You are neutral. How is that fair to a buyer you have been working with?
Dual Agency exists when a licensee is working with both the buyer and seller or both the landlord and tenant in the same transaction. For example, if your Designated Agent is also the listing agent, dual agency exists. Dual agency is allowed only with the informed consent of all clients. Informed consent is presumed if a client signs the separate Dual Agency Disclosure form prescribed by the Louisiana Real Estate Commission. Dual Agents owe the following duties to both the buyer/seller and the lessor/lessee:
(1) treat all clients honestly
(2) provide information about the property to buyers/tenants,
(3) disclose all latent material defects in the property known to the licensee,
(4) disclose financial qualifications of buyers/tenants to sellers/landlords,
(5) explain real estate terms,
(6) help buyers/tenants arrange for property inspections,
(7) explain closing costs and procedures,
(8) help buyers compare financing options, and
(9) provide information about comparable properties that have been sold so both clients can make educated buying/selling decisions.
Dual Agents are not permitted to disclose
(1) confidential information of one client to the other,
(2) the price the seller/landlord will take other than the listing price without the permission of the seller/landlord,
(3) the price the buyer/tenant is willing to pay without the permission of the buyer/tenant.
Here is a link to the existing form from the Louisiana Real Estate Commission on Dual Agency. This form is effective now (12/10/2011) and is subject to change.
Additional Reading:
Dual Agency: Why I Won’t and Why You Shouldn’t
Disclaimer: the Laws of Agency differ from state to state. Dual Agency is not legal in all states. Please check the law in whatever state you are in.
