Q: If I attend an open house, am I obligated to use the realtor staging the open house if I decide to make an offer?
– Anonymous
A: Absolutely not! You are not the first buyer to be confused about the role of a real estate agent in their quest to purchase a home. They may not understand exactly who the agent represents and real estate agency (Broker) relationship. Let me educate you a bit about what’s called “Agency” (I.E. who represents whom) in a Real Estate transaction. Many states actually demand that agents give buyers and sellers an “Agency Disclosure” form to sign up front before a transaction is started or offer is written. This form is not a contract or an agreement, it simply disclosures the various types of possible agency relationships that may exist. It is very important that you read the disclosure to better understand it and all that is involved in “Agency”. In this way you will be able to determine what type of agency relationship will work best for you.
Single Agency vs. Dual Agency– Generally, buyers agents who represent buyers are operating in a single agency capacity as a buyer’s agent and seller’s agents who represent sellers are operating in a single agency capacity as a listing agent. Agents who represent clients under single agency owe a “fiduciary responsibility” to their client. Agents are not allowed to share confidential information with the other party or the other party’s representative. Single agency agents are bound to use care and due diligence while performing their duties, disclose all material facts and above all be honest. Buyer’s agents and the buyer sometimes sign a buyer’s broker agreement, which lays out the duties and obligations of the agent. Both listing agents and buyer’s agents owe the client loyalty, confidentiality, accountability and honesty. Some agents work as buyer’s agent with buyers and as a seller’s agent with sellers, (both sides of the fence) and some agents work solely as exclusive buyer’s agents and don’t take listings.
Dual Agency With Two Agents– Because all real estate agents are licensed under a real estate broker, it is possible to work with one agent who is licensed by the same broker as the listing agent. This situation creates a dual agency. The agents could work at separate offices and be strangers to each other, but since they are licensed by the broker, they are still operating under dual agency if one agent represents the buyer and the other represents the seller. When first representing a new client an agent probably entered into a single agency relationship with their buyer. However, when the buyer chooses a home listed by that agent’s broker, the agent’s relationship with the buyer changes. Not all single agents make a point of informing their buyer of the change. The listing agent must also inform their seller of the newly created agency relationship as well. Remember, transparency is key. Dual agency must be agreed to in writing by both the buyer and the seller.
I’ll always remember my first transaction. After signing up with the seller as their listing agent I proceeded to write an offer from a buyer visiting my first open house. I instantly became a dual agent. I managed to close a very lucrative deal in about 60 days with a very understanding seller and a buyer who thought they were making the best possible decision to have me represent them.
Personally I’ll never understand the thinking of buyers and sellers who freely fall into dual agency at the blink of an eye. To me it’s like hiring your wife’s divorce lawyer to represent you in the proceedings. But that’s just me.
Lee Dworshak is a Realtor® with Keller Williams LA Harbor Realty in Rancho Palos Verdes, CA.
A: Not at all, good luck!
Lesley Barbosa is a Realtor® with Shelia Banner Weichert Realtors in Blue Bell, PA.
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