Dual agent, good or bad way of closing a deal?

Question

Hello fellow real estate experts .

Here is my situation , I found a property (duplex) negotiated selling price and pretty much moving forward with a deal! I did everything without real estate agent. Now I’m at point when I have received paperwork to sing from SELLER agent

It says he is a dual agent and represents BOTH seller and buyer , there is another option BYER IS NOT REPRESENTED BY A BROKER . Should I keep everything as seller agent insisting or should I choose an option of NOT REPRESENTED BY A BROKER ? Maybe I even should bring a buyers agent into a deal ?

I would love to have an advice on this!

Thank you in advance.

Charlie MacPherson · Answer

@Maxim Kaflovich We're missing a bit of information.

Was this property listed on MLS?  If it was, then the seller's agent likely has something like an "Exclusive right to Sell" contract.  That means regardless of who brought the buyer, the agent is entitled to collect the commission.

If it wasn't listed and you contacted the seller and negotiated a price and then suddenly, a Realtor pops up out of nowhere (which is how it sounds), you're under no obligation to have anything to do with that agent.  The seller is certainly free to pay him for representation though - but that comes out of the seller's pocket, not yours.

Dual agency is probably not to your advantage.  In dual agency, the agent turns into a transaction broker.  He can not negotiate against himself in your best interest.  If he thinks that the seller would take less than your offer, he cannot say so.  Conversely, if you have told him that you could increase your offer or offer better terms, he can't tell the seller that either.

If the property is listed, the total commission is agreed to in advance.  In that case, it's better for you to have a buyer's agent.  That person can work to get you the best possible deal on price, concessions and terms.  You'll benefit from a sharp agent's years of experience and negotiating expertise.

If the property is not listed, dual agency should at least protect you from having the seller's agent negotiating against you.  Though for the reasons stated above, you would still do better to have a strong buyer's agent.

John Warren · Answer

@Maxim Kaflovich you would still need to hire a real estate attorney to represent you, so why not do dual agency? Let the listing agent get rewarded for doing the work. You will still have representation for the rest of the transaction through your attorney, and your attorney will be impartial and can give good advice.

I have done dual agency multiple times with investors, and am actually doing two dual agency off market deals right now in Berwyn, IL. Typically in the deals I have done we have been able to get under contract very quickly as price wasn't the main concern. Once under contract, the transaction is the attorney's game anyways as the agents just facilitate inspections, appraisals, etc until closing.

Paul Howard · Answer

You have a lot of answers saying go with the dual agent/seller's existing agent.  I disagree.  Legally a dual agent must treat both parties equally. In reality you have no idea whether the agent has a prior (in addition to the listing) relationship or is even a relative.  They do NOT always treat both parties equally and have been giving advice to the seller as a advocate all along.  You made a mistake in even looking at the property with the seller's agent and you may end up paying for it in that you don't have anyone to help you even the playing field with due diligence.  Of course, if you are a sophisticated investor and truely do not need anyone to advocate for you go for it.  But, since you are asking I'd say you would have been better off with your own advocate.  A lesson hopefuly you have learned.  Good luck.  Oh, next time try  to find your own agent.  Suze Orman has a good link to find a buyer's agent in her Home Ownership section

https://www.suzeorman.com/resources/home-ownership

Mike Cumbie · Answer

@Charlie MacPherson

NY Doesn't have transaction brokers (Wish they did).

You really have 2 options

"Not represented" which means he is working for them and you know this, don't tell him anything you want to keep secret or have used against you at every turn he can.

Dual agency. In this case it affords you some protections. He still owes you (and the seller) confidentiality, honest and fair dealing etc. However he does not have disclosure to either party and that is better than him working against you.

As far as bringing another agent now that you have actually presented an offer and worked to a deal..... That would most likely backfire at some point.

Just my 2 cents and good luck

Matthew Irish-Jones · Answer

If the agent listed the property... and brought you to the table as a buyer, he is a dual agent.  What is the issue with using him?  The seller is paying his fee.  If it's a good deal, get it done and make sure everybody wins.

DJ M. · Answer

Bad form to waste the list agents time and then use another agent as your buyers agent on the deal.  Having a bad reputation is not something Id want for myself, personally.

Not to mention procuring cause.

Account Closed · Answer

I have personally sold four houses thru a duel agent. The agent was the same person each time, but this was with owner financing.I had already went over how I wanted the pieces to come together with Agent ahead of time do this help him explain to the buyer what I was looking for. If the buyer was trying to get a better deal then the agent would call me up to discuss on behalf of the buyers, before writing up the contract/ offer. It worked out fine.

Wayne Brooks · Answer

Well, it’s too late now to bring in another agent, they would not collect part of the commission.

Michael Lewis Lee · Answer

Hello Maxim!  It depends who is their highest concern, you or theirs?  The seller usually pay all brokers on both sides but you need to make sure their cost does not come out of your profit.  Beware of all those that are salespeople.

Good luck to you!

Karl B. · Answer

A dual agent is likely going to work EXTRA hard to get the deal done because he/she wants that 6% commission. I've dealt with it in the past as a buyer and had zero issues; I felt like the dual agent did a good job of walking the line of doing what's best for both the buyer and the seller.

Dual agent, good or bad way of closing a deal?

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