Dual agent for pocket listing good/bad?

Question

I am currently in the due diligence period for a duplex that a realtor I work with has been working on getting to sell for a while. I was able to offer a deal that the seller is comfortable with and we have been moving along fairly well. However, due to my ignorance, I am now finding out that the realtor I am working with is also representing the seller as a dual agent.

Is this a common practice in REI to have dual agents in pocket listings? My understanding was that having an agent represent both parties was generally to be avoided.

Thanks for your input!

Is this a common practice in REI to have dual agents in pocket listings? My understanding was that having an agent represent both parties was generally to be avoided.

Thanks for your input!

Will Fraser · Answer

Hi @Keaton Smith, the answers are Yes and Yes.  Yes, according to me and many it is advisable that you avoid dual agency when it is possible, as it helps align interests at no (or low) additional costs to you.

But yes, it is very common to have dual agency with pocket listings.  This is because they are pocket listings . . . they live in the pocket of agents who bring them out, often, when it most benefits them, like when they can represent both sides.

You might still get excellent, ethical service from the dual agent.  It's not guaranteed, but it's not impossible either.  Do your own due diligence and go in with eyes wide open, knowing that you are the primary one in the transaction representing YOUR best interests.

Paul Howard · Answer

Unless the agent told you  upfront that they were a dual agent and got your written permission  the agent acted illegally and you should report the agent to the real estate commission for your state. It doesn't matter if it is a 'pocket listing' or not.  Also, in many areas pocket listings are a violation of the rules of the MLS - if the agent is a member of the MLS.   If you proceed you should use an attorney since it may be too late to get your own agent.

Keaton Smith · Answer

@Will Fraser Thanks so much for your insight, what you say makes a lot of sense. I will heed your warning and make absolutely sure the numbers make sense before moving forward.