A (Limited) Defense of Dual Agency

avatarthumbnail.jpgJust when I thought I was out, they pull me back in …

Here is a little known fact about the great big world of real estate blogs – there only are 14 topics to discuss, 15 if you live in an area with that odd atmospheric phenomenon known as humidity. As such, real estate agents tend to gravitate toward the same topics on regular cycles because there only are 14 (or 15) topics total.

These flareups are about as predictable as the Santa Ana-blown wildfires of Southern California if not quite as easy to schedule as Halley’s Comet. (Brief aside … we’re only 53 years away from Halley’s Comet’s next pass … does this still get mentioned in books after the 1986 pass was as thrilling as Ishtar?)

In any event, there has been a spate of articles about something called dual agency – the scenario where a single agent or single brokerage represents both buyer and seller (since in Arizona representation is by the brokerage, not your friendly beagle-toleraring agent, it’s possible to have dual agency involving more than one agent.)

My remarks on the topic will be brief and will start with a confession. I am unclean, at least in the eyes of those who feel I’m headed for the charred walls of the damned. Earlier this year, I represented the buyer and the seller on the same transaction.

How did I find myself in this clearly horrifying position? I had been hired by a homeowner to market and sell his home. In the process of marketing, I sent information on this home to buyers who had hired me to help them find their home. And then I promptly locked them in the garage until they made a decision.

Okay, so I made the last part up. What I did, to recap, is perform the job asked of me by both my buyers and my seller. Clearly, I am the antichrist.

When it came time for my buyers to make an offer I showed them the comps but could not advise them as to what to offer, since dual agency prevents me from saying something that would disadvantage the other party. I didn’t even give hints like Nipsy Russell on the $100,000 Pyramid.

As the ink dried I drove the offer to my seller and showed him the same comps. Again, I couldn’t advise him what to do – all I could do was present the numbers and talk to him about his own personal motivation after trying for two years to sell this place. He called his daughter and promptly accepted.

So, to review …

Seller hires me to market and sell his home. Which I do.

Buyer hires me to help them find a home they love. Which I do.

Theoretically, I could have passed the buyer to another agent for the contract but if it’s in the same brokerage then it’s still a dual agency situation. Where it benefits the buyer to be shunted onto an agent they don’t know versus someone they have trusted for more than a year is beyond me.

It’s not that I don’t understand the academic aspect of the debate. I do. But I also know that when the transaction ended and the seller was able to move closer to family and the buyers collected their keys, both sides were happy.

And shouldn’t that be what this is about? It’s not about the commission – how much I did or did not receive (though I did receive less than I would have had I sold the home to a different buyer and found a different property for my buyers.) It’s about what met the clients’ needs and the clients’ perception of the transaction.

The argument that they didn’t know any better gives them no credit, nor I. Because at the end of the day, dual agency isn’t a particularly complicated concept. If you’re effective at marketing a home, the situation is going to arise. Sending buyers away as a matter of course doesn’t benefit the seller, who then is left to wonder whether the new agent will try to sell this house or something more expensive around the corner for more commission.

Now, if one side of the other isn’t comfortable with the entire situation then by all means I’ll get another agent involved. So far, I can count the number of times that request has been made of me on one hand.

As I said, this isn’t a really a complicated topic. And, mercifully, it’s one that hopefully will remain smoldering until the return of Halley’s Comet … or at least until the spring.

In the interim, what say you?

[tags]Phoenix real estate[/tags]

Jonathan Dalton

Jonathan Dalton is a 40-plus-year resident of the Valley and has been helping folks buy and sell homes since 2004. He can be reached at 602-502-9693 or info at allphoenixrealestate.com.


  • Jim Little 9 years ago

    Jonathon, thanks for a voice of reason calling from the wilderness.
    I, Also have practiced dual agency. It adds another dimension of professional and ethical responsibility, but can be done with good results for all.

  • BawldGuy 9 years ago

    I’ve done millions in dual agency transactions, the vast majority of which the seller insisted upon. You nailed it — but I’ll say it less PC.

    Oh, never mind. I’m as tired of dealing with the self appointed, self righteous crowd as you are. 🙂

  • Kris Berg 9 years ago

    I say, “You rock.” Well said, Tobey

  • Jonathan Dalton 9 years ago

    Jim – many of us have. I’ve got no issue with those who don’t want to do it but I’m less thrilled with the tone used by those arguing against.

    Jeff – If it works for Russell Shaw, it can’t be that bad, eh? 🙂

    Kris – Yes, but you still wrote it better as always.

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