What is Dual Agency?
In North Carolina, Dual Agency is taken very seriously and must always be disclosed to all parties in the transaction. In fact, it is so important that it must be agreed upon in writing by both parties. Dual Agency occurs when the brokering firm represents both the seller and the buyer in a real estate transaction. It does not necessarily mean the same agent is representing both sides. Are you confused as to how this really works? Let’s look at some scenarios to understand this better.
Dual Agency – Agent Represents Both Buyer & Seller
For this example, let’s say an agent represents both the seller and the buyer. How can this happen? Perhaps the buyer approached the listing agent, said they do not have a buyer’s agent and will work directly with them. Or perhaps the buyer agent sources an off market property and the seller agrees to work directly with the buyer agent (no separate listing agent). Whatever the case may be, the agent is in an interesting situation. They represent both sides, must now remain neutral and be extremely cautious when giving advice to either side. This does not provide either party with the best form of protection and is not recommended.
Designated Dual Agency
Since the above scenario poses so many sticky predicaments and can be so problematic for both parties and the agent, designated dual agency was created. Let’s go back to the example of the buyer approaching the listing agent to work directly with them. The brokering firm will assign a neutral agent (with no direct connection to the seller or direct knowledge of the listing) to work with the buyer. In this way, both the seller and buyer can get full representation from their agent and be fully protected. The practice of assigning the neutral agent to work with the other party is truly the best way to go.
Exclusive Representation
Of course, a buyer can always elect to have exclusive representation from their agent… but what does this really mean? Well, they would not be able to purchase a property that is listed with the same brokering firm that their agent works for (and that can rule out a lot of options that are on the market!) It truly does not serve in the buyer’s best interest to say “I agree not to look at any houses that is listed by the same firm that you work for.” It is far better for the buyer to state in writing that they always want their agent to act as their designated dual agent in a transaction with the same brokering firm.
Learn More…
Click here to learn more about the legal side of “The Dangers Of Dual Agency”.
Click here to learn more about the benefits of having a buyer’s agent.
Click here to learn more about the benefits of having a seller’s agent.
