When a real estate agent represents both the buyer and the seller, it is known as a dual agency. The majority of individuals with knowledge of the real estate industry are aware that a buyer’s agent works for the buyer and a listing agent works for the seller. However, there is a third category that is far more mysterious: the dual agent.
Dual agents, sometimes called transaction brokers, combine the functions of the buyer and the seller into one person. When a buyer falls in love with a house, they may run into this situation since the agent they engaged to represent them also happens to represent the seller. It’s uncommon, but it does happen, particularly in smaller markets where there aren’t many available houses. Dual agency is another term for having distinct agents representing the buyer and seller at the same real estate company. This is particularly common at large brokerages with a significant number of listings.
Dual agency is legal in some states (but not others), provided that both buyers and sellers are informed. But is the notion of dual agency wise? Yes and no, I suppose. Dual agency real estate transactions have both benefits and drawbacks. Pros and drawbacks are listed below.
Benefits of dual agency
The property purchase process may be streamlined with dual agency, no doubt. Consider this: Four schedules will need to be examined before the property can be viewed if the buyer and seller each have different agents. Eliminating one agent makes scheduling 25% simpler. something close to that.
A second benefit of using two agents is that you might be able to save money on the commission, which is the fee that sellers of homes pay their agent in exchange for all of their labor (usually 6% of the sales price), which is then shared with the buyer’s agent in exchange for their own labor. A dual agent, on the other hand, keeps everything. (Well done them!) Dual agents could be more willing than normal to reduce that commission a little as a consequence.
Downsides of dual agency
A dual agent is meant to be impartial, providing equal assistance to clients on both sides of the transaction. But maintaining objectivity might be challenging. For instance, since an agent’s compensation is based on the sales price of a property, getting a high selling price is naturally in the agent’s best interest because he would profit more. That benefits the vendor but not the customer as much.
How do you know you wouldn’t have negotiated a better price if you had your own skilled representation, even if you notice commission savings?
A dual agent must also be careful not to breach the trust of either party because he represents both the buyer and the seller. Therefore, if you had your own agent fighting for you, he might not provide juicy details that you might have obtained more readily.
For example, A listing agent may be aware that his customers are in a hurry to sell. If the buyer’s agent learns of this, he can let his clients know that they have more negotiating leverage. On the other side, a dual agent can be required to keep all personal affairs quiet.
When to use a dual agent
If a dual agency situation arises, agents in areas where this is legal must notify customers; they cannot proceed without the informed assent of both parties. Additionally, both buyers and sellers have the option to reject the representation and work with another agency, ensuring that each side is properly represented.
A transactional Realtor®, according to Mitchell, “facilitates the documentation required for the sale rather than representing the seller or the buyer. “An illustration of that would be in the event that you and your neighbor reached an agreement to sell your house and have already worked out the conditions, price, etc. A transactional realtor might help both parties move toward closure. Since so much of the sale has already been worked out, you might wish to request a lesser commission in this situation.
