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As a Seller-Exclusive Listing Agent (S.E.L.A.) I do not personally act as a dual agent in my real estate practice. I believe that separate representation when listing a property for sale is the most ethical form of representation in a real estate transaction. I also believe that acting as a seller-exclusive listing agent enables me to achieve the optimal price and terms for my clients when they are selling their property.
How does seller exclusive representation benefit the Seller?
By having no personal stake regarding which buyer purchases my client’s property, they will have the confidence of knowing that they will be getting my undivided loyalty. Moreover, by design, I will be putting their interest before my own, the mark of a true fiduciary. My obligation is to successfully market and sell my client’s home to the most qualified buyer, offering the best price and terms.
But, if you are a Dual Agent, doesn’t the seller save on commission?
Because I don’t represent buyers, I have no personal agenda that would lead me to rush and pressure the seller into accepting an offer before the property has been marketed to the buying public on the open market (more exposure means more interested parties and a better selection of offers).
Buyers and their agents love S.E.L.A. because it assures them that they won’t be competing with a buyer to whom I could share inside information that would enable them to know the price to beat, giving that buyer an unfair advantage. This specifically benefits the Seller in 3 ways:
- Buyer Agents are much more inclined to show my listings to their clients because I offer a level and fair playing field. In addition, because I’m not repping a buyer the odds are much greater that their buyer will be the successful bidder and therefore, agents are highly motivated to “push” their buyer to submit offer on my listing over another property.
- Expounding on this concept, a “level and fair playing field” gives the buyer and agent the confidence to submit their highest and best offer, knowing that it won’t be used against them by a listing agent with their own buyer. As you look at my recent sold listings (next page) you will note that I am routinely selling my listings for huge amounts over the listing price-magnitudes higher than the 1-2 percent that a Seller might save in a dual agency transaction and in nearly every case I sell for prices that embarrass the valuations one finds on Zillow, Red Fin and other web sites that offer on-line property values.
- My reputation as a seller-exclusive listing agent is well-established among Relators city-wide and with that reputation come the reasonably-concluded expectations that I am an agent of high ethical standardsand that I will exhibit professionalism in transactions and other dealings. (On a personal note, I have had scores of agents thank me for not repping buyers on my listings and many of those have expressed wishing that more agents would do the same).
But isn’t the deal done once the offer is negotiated?
Hardly! During the escrow period, negotiations between buyer and seller can become “prickly” and even combative while resolving disputes over transactional matters (including, but not limited to) inspection, loan, and appraisal contingencies. In my personal experiences (from years ago) with dual agency and, through tales shared by other agents, it appears inevitable that at some point the buyer, seller or both become suspicious of, and dissatisfied with their representative and question their dual agent’s loyalties. This is particularly the case when unexpected problems arise during a transaction. Over the years I have heard countless stories of transactions going off-the-rails when problems arise during and not surprisingly, both buyer and seller blame the dual agent.
With separate representation, problems tend to arise less frequently. I believe this to be the case because both parties have a representative who is carefully focused on their client’s interests. Such agents working towards the greater good while acting as their client’s trusted advisor tend to do a better job of troubleshooting at time of contract, thus encountering fewer problems down the road. And of course, “two heads are better than one”. In summary, when your clients list and sell their home with me they will never question my loyalty or ask whose side I’m on.
Isn’t their less risk of lawsuits if you represent both buyer and seller?
Arguably, dual agency potentially presents greater legal risk. Dual Agency Representation in real estate transactions has been on the hot seat for some time and recently the very legality of dual agency has been challenged in landmark court cases that asserted that dual agency in a real estate transaction should be considered a conflict of interest and disallowed.
Seller-exclusive representation, on the other hand, makes for a more ethical, honorable process that is compatible and consistent with the beliefs held by most attorneys and trustees, when it comes to dual loyalties and conflict of interest. And, since attorneys almost always represent trusts and/or estates and, are therefore actively involved in these types of real estate transactions, it just makes good sense that we should all “be on the same page”. Moreover, separate representation is the best option for avoiding the potential legal pitfalls associated with dual agency,
In conclusion, while dual agency in a real estate transaction is currently allowable under California law, I personally question the ethics of dual representation. In addition, I have serious doubts that anybody can be truly fair to both parties and lastly, I think it is naive to think that there are people capable of putting their client’s interests before their own, when the opportunity for them to make much more commission may not be in the best interest of their client. For these and other reasons, Dual Agency/Representation is not part of my business practice. *
* Note: While personally, I will not represent a buyer wanting to purchase a property that I am representing as Listing Agent, I approve and encourage any buyer agent to submit an offer to purchase my listing, even if they work under the same brokerage as me. This would be considered dual agency under my brokerage however, I would still be acting as the Seller’s representative, only.
