Is dual agency legal in my state?
An agent is supposed to negotiate on their client's behalf, but one agent representing both sides of a sale can't.
Many states have regulations designed to protect sellers and buyers from being taken advantage of by dual agents.
It is difficult for dual agents to remain neutral and respect their clients confidentiality.
If you confide in your listing agent that you are willing to accept an offer of $50k below the asking price, you may be able to sell your house.A prospective buyer is represented by your agent.Is it possible that the agent will push to get you the highest price?Will they tell you your bottom line to help your new client get a good deal?
A dual agent can earn more commission from a single transaction if they represent two clients at the same time.
A single agent can manage the timelines with no back-and-forth, which is why dual agent sales are likely to be faster.
A designated agency is when the buyer and seller work with two different agents.
Some risks may carry over, even though designated agency is slightly different than dual agency.
Each party has an agent advocating for them.When one agent tries to represent both sides, a designated agency can help minimize the conflict of interest that occurs.
In November 2020, dual agency is illegal in eight states: Alaska, Colorado, Florida, Kansas, Oklahoma, Texas, and Wyoming.
In all other states and Washington, D.C., dual agency is legal.
There is a need to know about dual agency regulations in all 50 states and Washington, D.C.
If you don't fully understand them, dual agency carries some significant risks.
The benefits and risks of a dual agency sale need to be weighed against each other.
We have outlined some helpful considerations and tips so you can proceed with confidence if you choose to move forward.
The seller only has to pay one agent if there is only one involved in the sale.The lower the cost of the transaction, the greater the savings.
Both parties have more wiggle room in negotiations.The seller may walk away with more profit, the buyer may have secured a lower price, or both!
In some cases, dual agency will allow you to skip the house hunting process.This happens when an agent.
More direct communication is a result of dual agency.You will never have to wait for a complicated back-and-forth mediation because both parties share one agent.
The agent can't try to sway either party while trying to close a deal because they must serve both clients equally and fairly.It is your responsibility to handle all negotiations and advocate for your best interests.
The dual agents are supposed to be neutral parties, but they are highly motivated to get the deal done.
They have a lot of information that can be used in negotiations, such as the parties bottom lines, motivation for selling or buying, and so on.
The dual agent may use or share that information to close the deal, which could affect one of the parties involved.
This is technically illegal, but it happens a lot.You may have legal recourse if you think you were deceived in a dual agency sale.
When an agent knows they have an existing buyer who would be a good match for one of their listings, dual agency can happen.This can bring convenience and savings to the seller.
It is not always the best option.In a high-demand market, listing the property to the widest possible audience can spark competition and potentially drive up the sale price.
Your priorities are speed and convenience, so talk to your agent about your options.A good agent will be honest in helping you make the right decision and look out for your best interests.
The agents will earn more through dual agency.If your agent ignores your concerns, it's a red flag.
The seller pays a commission that is split between their agent and the buyer's agent.Double ending a sale is when a dual agent gets to keep the entire commission.
Don't be afraid to negotiate because many dual agents are willing to reduce their commission.A traditional transaction in which the commission is split between two agents will still earn them more than a dual agency sale.
The numbers could be broken down for a standard 6% commission.
Ask about variable rate commission as you negotiate with your agent.If it is a dual agency sale, your agent would charge a reduced rate if the sale closes with another agent.
In a dual agency sale, your agent is technically an impartial mediator, so you will be in the driver's seat when it comes to negotiating the terms of the deal.
Don't be afraid to push for the things you want, everything in real estate is negotiable.
If you want to succeed at the negotiating table, be careful about what you tell the dual agent.
Sharing your bottom line, motivation for selling or buying, or required timelines can be avoided.This type of information increases the risk of confidentiality breeches.
Many buyers will attempt to make a lower offer in a dual agency deal, knowing that the seller is paying less in commission.
If you want to push on price, you have to do your own research.Ask your agent if the recent sales prices for similar homes in your area justify the listing price.To confirm their findings, look at similar properties in the area, focusing on the price per square foot and interior finishes.
While negotiating, buyers may ask for repairs or concessions because sellers often have some wiggle room in a dual agency deal.
You should compare the buyer's estimate to your own quotes from trusted contractors.It is easy for sellers who are not familiar with repair costs to be taken for a ride.
If you want to avoid or get out of a dual agency situation, your options will depend on how far into the process you have gotten.
Before a dual agency sale can take place, agents must obtain consent from both parties.It is not necessary for you to agree to dual agency if you don't feel comfortable with it.
When an agent gets an inquiry about one of their listings, it's the most common dual agency scenario.It's easy to avoid the dual agency situation in this case.
We recommend talking to your agent.If they can adjust, explain what is making you uncomfortable or unhappy.Your agent may be able to bring another agent from their broker into the deal.
It is possible to change agents if you have already signed a contract.The next steps will be different for both buyers and sellers.
Changing agents can break down into two different situations if you buy.The broker's agreement is the deciding factor.
There are more barriers to changing agents if you are selling.Any limitations or processes you are legally obligated to follow will be spelled out in your contract.
Many contracts last for two to six months.If you are close to the end of your contract, you may want to wait.