Dual Agency is legal in the State of Louisiana. Dual agency means that the agent you are working with, the agent that you think is looking out for you is not working for you at all. Dual Agency means that the agent you are working with does not “represent” you and does not “represent” the seller in your transaction. Dual agency means that both you and the seller signed a paper that says that you agree to let your agent work as a dual agent. Question is why would you agree to share an agent in a transaction.
Dual Agency is in the agents best interests. It is not in the best interests of the buyer or the best interests of the seller to have one agent in the middle of a transaction mediating issues and not being allowed to advise either side.
When dual agency is agreed to it is always the seller who stands to gain and never the buyer. Why? Because for the most part dual agency occurs when a seller’s agent gets a call from a buyer and the buyer decides to buy the house they called on. Ethical and honest real estate agents will explain clearly to any buyer they come into contact with that they have a right to their own agent, and that the listing agent represents the seller.
Often I hear from buyers that they understand dual agency and that is means that the agent “will get the deal done”. Whoa! That is not a clear explanation of what it means to a buyer to not have an agent who represents them in a transaction. So what does it mean?
1. Everything that a buyer says to a seller’s agent is information that agent can use against a buyer in a negotiation. As an example if you go to an Open House and the seller’s agent is there and you start to chat EVERYTHING you say could end up affecting a negotiation..until you discuss whether that agent will act as a dual agent or you decide to get your own agent.
“I am moving from Anycity, USA and we haven’t sold our home yet, market is down and we don’t know what we will end up doing but that doesn’t mean I don’t love this house and can’t buy it”
Telling the listing agent that you “love” their listing means you are emotionally engaged and that means a different tactic in a negotiation than if you had said that you love the house to your own agent.
2. Determining price. A dual agent might be able to provide you with comparables but can’t advise you to start lower or that they think such an such price is good because that is working against the seller and a dual agent must remain neutral. A buyer’s agent can give you the comparables and then review them with you and discuss a strategy of how to proceed because they are looking out for your interests. A dual agent can give you the com parables and go over the with you but not advise you…
3. Inspections. You do a Home Inspection on the property and discover issues. If you have a buyer’s agent working for you you can discuss the issues and then decide what you should do about those issues. If you are working with a dual agent you may find issues in your home inspection and you have to decide what to do on your own because a dual agent can’t advise you against a seller because a dual agent has to remain neutral.
So why did you sign that form and agree to allow your agent to work as a dual agent? Did you do it because you believe that it might save you some money on commission? Really? Well the seller signed an agreement to pay a commission and is bound to pay that amount whether it is one agent or two agents. It does not mean one side of a commission it means one agent making both sides of the commission. So again, why did you sign that form?
I have so far in my career only worked as a dual agent once and the buyer was an investor who bought and sold properties and knew how the process works, knew the area, knew house issues and basically was experienced and didn’t need to be represented. For a first time buyer I believe that should always have their own agent in a transaction holding their hand through the process.
I much prefer a buyer to have their own agent representing them in a transaction on my listings. I consider this to be a clean deal. There is no question as to the guidance a buyer received.
Real Estate agents have differing views on this and need to disclose and explain how they work and you need to agree to it in writing. There are agents who have no problem with dual agency. All’s good as long as everything is disclosed and agreed to before you tell them your financial history.
Disclosure, disclosure, disclosure.