When the buyer and seller are both represented by the same agent, dual agency is created and so is a conflict of interest. The agent can no longer fight for the best interests of either buyer or seller. The agent has an incentive to make the transaction happen and collect both sides of the commission. As a buyer or seller, you are entitled to decline dual agency. If one agent will represent both the buyer and seller in a transaction, both buyers and sellers must be fully informed and agree to this conflict of interest created in dual agency. This disclosure must be in writing.
What many do not realize is that when a broker represents both the buyer and seller in a transaction, even if there are two separate agents, dual agency is also created. Only the head broker of an agency has authority to buy or sell. Ever notice that the commission checks at a closing are not written to your agent, but to the broker that the agent is under? There is only one head broker in an agency. In a large agency, several agents may work under one broker. For example, Realtor Rita and Realtor Rick, both work under Broker Bob. Realtor Rick cannot show his buyers any homes listed by Realtor Rita unless Rick’s buyers and Rita’s sellers understand the conflict of interest created and after full written disclosure, agree to dual agency. Although buyer and seller often have conflicting interests, under dual agency, agents are prohibited from advocating exclusively for either party.
Some in Minnesota would like to add "designated agency" as another choice. Proponents of designated agency argue that agents can work in the client’s best interests over what is in the best interest of the firm, the broker, their boss. Others argue that when the brokerage is receiving both commissions, the conflict of interest is no different than with dual agency and should be clearly disclosed to the clients. Make sure you agent explains this to you so you completely understand.
If you want your opinion to be heard, contact your representative.
Glen, the head broker of CastleHomesMN, is committed to working for you. Looking to sell? Glen can give you a free market analysis and tell you how he would market your home. Looking to buy? Glen listens to you and is eager to help you find your castle, large or small. CastleHomesMN’s transactions range from a $20,000 investment property to a nearly million-dollar home. You deserve an agent that will work for you! Glen 763-670-8679 or firstname.lastname@example.org