Recently I read a question on facebook about agency in antoher state that led me to write this post. I want to explain a little to you the buyer or you the seller who might be searching for the right brokerage firm on Lake Sinclair to list or assist you in finding a home.
I will be the first to admit that when buyer's agency arrived on the scene I was one of the biggest skeptics around. When I entered the real estate profession, agents represented sellers and sellers only. After all, the seller was paying the commission so he seemed entitled to have the representation. There was agency and sub agency. And then the dual agency came into being and my first thought was... How can you be loyal to your "husband" and your "boyfriend" at the same time?
But when buyers learned they could have representation then they WANTED representation. And when you put yourself in the buyers shoes you understand that representation for a major purchase from a professional in the industry makes perfect sense.
Let me start by defining some terms :
- "Agency" means every relationship in which a real estate broker acts for or represents another by the latter's express authority in a real property transaction;
- "Client" means a person who has entered into a brokerage agreement with a real estate broker
- "Brokerage Engagement" means a written contract wherein the seller, buyer becomes a client of the broker and promises to pay the broker a valuable consideration or agrees that the broker may receive a valuable consideration from another in consideration of the broker's producing a seller or buyer ready, able and willing to sell or buy the property.
- "Customer" means a person who has not entered into a brokerage engagement with a broker but for who a broker may perform ministerial acts in a real estate transaction.
- "Ministerial acts" mean those acts which the broker or affiliated licensee performs for a person which do not require discretion or the exercise of the broker or affiliated licensee's own judgment.
- "Dual agent" means a broker who simultaneously has a brokerage relationship with both buyer and seller in the same real estate transaction.
Okay, now that we have some terms out of the way what does "dual agency" mean for buyers and sellers? If you are the seller and have hired a broker to sell your property you have agreed to pay a commission for this service. Do you really want your broker or his licensee to also represent the potential buyer of your home? Well if the buyer walks into his office looking for a home and also wants representation do you want your home to be excluded from the list of properties that get shown to this buyer? No, I didn't think so. If you have told your broker I'll take $xxx,xxx. for my house is your broker allowed to give this information to a potential buyer as a dual agent? NO!
In every case Licensed brokers and licensees are required, by law, to be honest, truthful and to disclose materially adverse conditions relative to the purchase and sale of a property.
So what does dual agency mean if you are the buyer? If you want representation, but won't agree to dual agency you are excluding any listings that this broker may have currently listed. Which homes do you think the broker or his licensee might know more about and know will fit the needs and desires as you describe them to your broker or his licensee? Maybe those they have listed? And if you and the seller both agree to dual agency then are you requited to pay your agent a commission as a buyer? No, you are allowing him to accept the selling side of the commission as compensation for your representation. WOW, free representation sounds good right? Now this does mean that the broker or licensee CAN NOT tell you the amount to offer on a property. But isn't that something you'd like to decide for yourself anyway. The broker or licensee can provide you with comparable properties to help you make an educated offer. It may likely be the same sold listings that the broker or licensee provided the seller when suggesting a listing price for the property you are making an offer on.
Dual agency simply means that neither party is exclusively represented. It also means that confidentiality must be maintained for each party. Again all materially adverse conditions MUST be disclosed.
Now let me add one additional circumstance and short explanation... If the buyer and seller in a transaction are clients of the same brokerage firm but are working with different licensees under the broker then "Designated Agency" occurs. In Georgia designated agency is a form of dual agency. It does mean that the licensee working with the buyer and the licensee working with the seller can not discuss the certain aspects that would be detrimental to the position of either party. They can still discuss things directly with the broker who is legally bound not to discuss with the other licensee. In most cases in my office we choose designated agency with one person working with the buyer and one working with the seller when one of our buyers wants to buy one of our listings.
In the end and after many years of Lane Realty successfully practicing both dual and designated agency I no longer have any adverse views to either. Lane Realty has been offering dual agency for over a decade now and we have had many many happy buyers and sellers and no problems have come from our fair and honest representation of both parties.
I would be more than happy to answer any questions you might have about the types of agency allowed in Georgia that we practice at LANE REALTY. The only one my firm does not allow is sub-agency.
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Tammy Lankford, Broker/Owner
Broker License # 169695 Lane Realty License # H-11420
Call me today for all your Lake Sinclair real estate needs.
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