What is Dual Agency?
Tuesday, May 24th, 2011In Massachusetts any real estate company that lists property and represents sellers and also represents buyers in the purchase of one of the company’s listings is in Dual Agency. That means the brokerage firm has a conflict of interest. In our state it could be called either Dual Agency or Designated Agency depending on the office policy of the real estate company. Dual Agency recognizes the conflict and limits the level of service to both clients.
In a Designated Agency company both agents are allowed to represent their respective seller and buyer clients without being a Dual Agent. However, they are still in a dual agency transaction and their broker is considered a Dual Agent. The real estate company still profits more when a higher purchase price is negotiated. This also benefits the seller. But where does that leave the buyer?
Some Buyer Agents in Designated Agency offices think of themselves as Exclusive Buyer Agents. But by definition an Exclusive Buyer Agents works for an office that does not take listings of any kind and represents only buyers. The National Association of REALTORS defines Exclusive Buyer Agency as “the practice of representing only buyers, and never sellers in a transaction. The company never lists a seller’s property and thus never has a seller as a client.”
Any company that represents both sellers and buyers runs the risk of dual agency. Designated Agency is the primary choice for real estate companies in Massachusetts. Any Buyer’s Agent representing a purchaser in a buying a company listing is in Dual Agency.
Most true Exclusive Buyer’s Agents belong to NAEBA (National Association of Exclusive Buyer Agents). What kind of office does your Buyer’s Agent work in? Are they members of NAEBA?
Ronn Huth 800 25-BUYER