Selling House...Dual Dislosing Agent Yea or Nay ?

[Wild_Knight]

Anyone in the business have thoughts about using a dual disclosing real estate agent ? The agent we plan to go with to list/show our house is adamant that we allow her agency to be dual disclosing because it would mean a larger pool of potential buyers and possibly more/higher bids.

But some internet research suggests dual agents are a bad idea notwithstanding the above because dual agents can't negotiate for you, they can only accept and relay offers.

Would appreciate insight from both attorneys and seller opinions.

 

[RUtix4me]

Anyone in the business have thoughts about using a dual disclosing real estate agent ? The agent we plan to go with to list/show our house is adamant that we allow her agency to be dual disclosing because it would mean a larger pool of potential buyers and possibly more/higher bids.

But some internet research suggests dual agents are a bad idea notwithstanding the above because dual agents can't negotiate for you, they can only accept and relay offers.

Would appreciate insight from both attorneys and seller opinions.

I feel like there was a thread here exactly like this recently, or is just me?

 

[RU01DrexelMed05]

Real estate agents are in no way, shape or form on your side. The only interest they have is making a sale. If the agent you have is insisting on that, I'd look elsewhere. Plenty of agents out there.

 

[RU85inFla]

This is different from state to state I believe. I believe in Florida, it is the agent that comes under consideration and not the agency. Only comes into play if your agent brings a buyer.

 

[RU205]

Why would it bring in a larger pool of potential buyers?? That part doesn't make sense.

 

[RutgersUnion]

What does being a dual agent having anything to do with the amount of buyers being exposed to.

 

[miker183]

Anyone in the business have thoughts about using a dual disclosing real estate agent ? The agent we plan to go with to list/show our house is adamant that we allow her agency to be dual disclosing because it would mean a larger pool of potential buyers and possibly more/higher bids.

But some internet research suggests dual agents are a bad idea notwithstanding the above because dual agents can't negotiate for you, they can only accept and relay offers.

Would appreciate insight from both attorneys and seller opinions.

A dual disclosed agent ALLOWS an agent to represent both seller and buyer. If it has been represented to you that this situation doesn't allow another agent/agency to bring a buyer they are wrong. You should find another agent. The advantage to the agent is to not split the commission. The pitfall is during negotiations, how do you faithfully represent two sides whose financial interest are at odds?

Disclosure-- I am a licensed NJ Real Estate Agent. I won't solicit business through this site, but if you have any questions private message me. It's likely I don't even work your area.

 

[knightfan2000]

I thought the dual agent clause simply covers cases where your realtor might be bringing a buyer to the table, either through their own contacts or via an Open House. If that were to happen, they need to disclose ahead of time that they need to become "impartial" at that point by simply relaying the offers back and forth. The good news is that you can usually write in a lower commission to cover that circumstance. I could be totally wrong but that's my understanding

 

[RutgersUnion]

I thought the dual agent clause simply covers cases where your realtor might be bringing a buyer to the table, either through their own contacts or via an Open House. If that were to happen, they need to disclose ahead of time that they need to become "impartial" at that point by simply relaying the offers back and forth. The good news is that you can usually write in a lower commission to cover that circumstance. I could be totally wrong but that's my understanding

It would apply if the broker brings in a buyer but not necessarily if a buyer shows up at an OH. If a buyer shows up at an OH with no representation theres no reason it couldn't remain that way.

 

[cicero grimes]

I am an attorney who has been concentrating in real estate for 25 years. The dual disclosed agency only becomes an issue if your listing agent procures a buyer. However this is your home and you have the right to insist on them acting only as a seller's agent If they tell you they cannot do that do not hire them. New Jersey law allows just about everything in a listing agreement to be negotiated between the broker and the home owner. If they tell you otherwise they are being dishonest.

Good luck with the process.

 

[eceres]

It is pretty common for listing agents to ask for this, as they hope to find buyer from open house / signage to get the full commission (instead of paying a part out).

In such a situation you lose some advice, they also might prefer their own offer which could affect how they present competing offers.

On the flip side refusing to sign might reduce any advertising / open houses they do for your property.

They should be able to clearly explain the benefit / downsides. If they cannot might be better to find another realtor.

 

[Wild_Knight]

Thanks for the info so far....my internet research led me to believe that 'agent' in this case means anyone from her agency/company....so that by not allowing that agency to work both ends of the deal we would be excluding all of the potential buyers using agents at that realty....that's why possibly fewer offers since is perhaps the most popular one in my area.

She hasn't said absolutely must be dual, but she has said no seller has ever rejected that arrangement in her 20 years in the business because it favors the seller in terms of allowing for more offers (ie offers thru other agents at her agency).

 

[RutgersUnion]

Thanks for the info so far....my internet research led me to believe that 'agent' in this case means anyone from her agency/company....so that by not allowing that agency to work both ends of the deal we would be excluding all of the potential buyers using agents at that realty....that's why possibly fewer offers since is perhaps the most popular one in my area.

She hasn't said absolutely must be dual, but she has said no seller has ever rejected that arrangement in her 20 years in the business because it favors the seller in terms of allowing for more offers (ie offers thru other agents at her agency).

Sounds like complete BS. Small town realtors are super shady in my experience.

Edit: Buyers are under no obligation to any realtor. In NJ I've heard that some companies ask buyers to sign a contract saying that realtor will represent them in all transactions. As far as I understand these contracts are in no way enforceable and the realtors know it.

She should be able yo show your property to anyone and everyone while still only representing your interest. sounds like this realtor puts her companies interest before yours.

 

[redlinehw]

IIRC an agent has a fiduciary responsibility to the party that pays them unless otherwise stated in writing. Since buyers rarely have it in writing that the agent is repping them, technically the buyer's agent has a responsibility to the seller, not the buyer in the negotiations.

 

[brookdale-soda]

There is not much incentive for a realtor to get you an extra $10-$20k. They want to make the sale and move on.

We should develop an incentivized type contract structure on this site since this question comes up a lot. Something along the lines of this:

If the house sells for X (agreed upon market value based on comps), the realtor gets XX% commission.
If the house sells for X + 10k, the realtor gets an extra 10% of the difference for a bonus.
If the house sells for X + $20k, the realtor gets an extra 25% of the difference for a bonus.

or something to incentivize the sellers agent to align interests with the seller.....

 

[miker183]

There is not much incentive for a realtor to get you an extra $10-$20k. They want to make the sale and move on.

We should develop an incentivized type contract structure on this site since this question comes up a lot. Something along the lines of this:

If the house sells for X (agreed upon market value based on comps), the realtor gets XX% commission.
If the house sells for X + 10k, the realtor gets an extra 10% of the difference for a bonus.
If the house sells for X + $20k, the realtor gets an extra 25% of the difference for a bonus.

or something to incentivize the sellers agent to align interests with the seller.....

What you are describing is a "net commission". It is illegal in NJ, as it has created some really shady deals.

 

[AreYouNUTS]

As a (recently) licensed agent in NJ I'll say this

I would NEVER "push" anything, let alone being a dual agent, on anyone (friend, family, or referral) and my suggestion, if they truly are "pushing," is to walk away and list with someone else.

NUTS

 

[brookdale-soda]

What you are describing is a "net commission". It is illegal in NJ, as it has created some really shady deals.

Interesting. Its done in other industries. Incentive contracts are fairly common in large construction projects.

What was shady about the deals? was the buyer and seller in on it together?

 

[miker183]

Interesting. Its done in other industries. Incentive contracts are fairly common in large construction projects.

What was shady about the deals? was the buyer and seller in on it together?

Since buyer agents are paid by the seller, (both agents are), some buyer agents wouldn't necessarily negotiate a fair price. The sellers agent could overprice, and if the buyer agent was less than moral, they both made more.

I'm sure it was infrequent, but bad practice.

 

[brookdale-soda]

Since buyer agents are paid by the seller, (both agents are), some buyer agents wouldn't necessarily negotiate a fair price. The sellers agent could overprice, and if the buyer agent was less than moral, they both made more.

I'm sure it was infrequent, but bad practice.

They are already not acting in the best interest of their client in many cases. They are acting in the interest of closing the sale.

My experience has been that a sellers agent treats the house as a commodity (lowering expectations on sale price during the negotiation) while the buyers agent treats the house as a "one of a kind specialty item" that you don't want to miss out on. Its usually a soft type of sell from both sides but it is there nonetheless.

My only advice to the OP then is find a realtor you trust and then get a list of comps and know a range that the house is worth. In fact, the house is a commodity within a range. Then hold tight.

That said, i would'nt want a dual agent. A man cannot serve two masters...............
\

 

[fischy5000]

I feel like I've been on the other side of a variation of this type of scenario. I went to an open house on a place in jersey city. As I finished the walk through, it came up in conversation with the sellers agent that I had a realtor working on my behalf. He told me the apartment was a realty office exclusive and that if I wanted to buy it I would have to essentially bail on my realtor and use him (or I guess anyone from his office). Seemed like something that was against the best interest of the seller reaching as many as possible but who knows.