Same agent representing buyer and seller for investment property

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Same agent representing buyer and seller for investment property

Vandan Mehta
Member since 2021 · 3 posts · 0 votes

Hello, I am a first time investor and I reached out to an agent for helping me in the process and he sent me couple of his own listings. While they look attractive, I am not sure if this is a good idea to have the same agent representing both me and the seller. Can anyone please share their experience who have been in the similar situation? How can I find out if agent is looking out for me? Thanks..

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Charlie MacPherson
China, ME · Member since 2014 · 3k+ posts · 4k+ votes
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Especially as a new investor, you need your own agent.  A Dual Agency is legal in many states, but borderline unethical.

In that relationship, the agent is supposed to function as an impartial representative for both sides.  That means that if he knows something useful about the other side in negotiations, like "they absolutely have to close by X date", he cannot share it with you.

You need someone on YOUR side and in a Dual Agency situation, you don't have it.  There's a reason we don't let the fox guard the hen house.
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  • Kevin Sobilo
    Realtor · Hanover Twp, PA · Member since 2018 · 3k+ posts · 3k+ votes
    4y

    @Vandan Mehta, as an agent it can be awkward to represent both the buyer and the seller as a dual agent but only because sometimes the clients don't understand what limits that places on the relationship.

    The agent still needs to be honest and hold your confidences. For example, the agent can't tell the seller you're willing to pay $5k more even if they know that to be true.

    Basically a dual agent can't give you advice and help you negotiate with the seller. They can help you in every other way, but they can't do that because it conflicts with their responsibilities to the seller. For a client who is experiences that may not be an issue at all. For someone brand new that might not be great. 

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  • Charlie MacPherson
    China, ME · Member since 2014 · 3k+ posts · 4k+ votes
    4y
    Especially as a new investor, you need your own agent.  A Dual Agency is legal in many states, but borderline unethical.

    In that relationship, the agent is supposed to function as an impartial representative for both sides.  That means that if he knows something useful about the other side in negotiations, like "they absolutely have to close by X date", he cannot share it with you.

    You need someone on YOUR side and in a Dual Agency situation, you don't have it.  There's a reason we don't let the fox guard the hen house.
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  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    4y

    @Vandan Mehta

    Dual agency is when a single real estate agent represents both the buyer and the seller in a real estate transaction.

    As a investor considering dual agency, these are the pros and cons you should be aware of before making a decision.

    Pros

    • Faster communication: When one agent represents both sides of a real estate transaction, there can be less of a delay in price negotiations or getting the answer to a question. The agent still may not get a timely response from their buyer or seller. However, because there aren’t two agents, there’s one fewer party that could hold things up.
    • Possible savings: An agent who stands to earn a double commission might be willing to accept a lower commission. The seller typically pays both agents’ commissions, so the seller is the one who can directly save money in this situation. But when the seller’s costs are lower, they may be willing to accept a lower price from the buyer. The seller, buyer and agent could all benefit from the arrangement.
    • More knowledge of the property: From a buyer’s or tenant’s perspective, using the seller’s or landlord’s agent could mean gaining access to more information about the home. The problem is that some of the details you want may be the same details the seller or landlord doesn’t want their agent to share. Indeed, an ethical agent in this situation will keep these details to themselves.

    Cons

    • Conflict of interest: This is the biggest drawback to dual agency and the reason why some states ban it. Human nature and financial incentives can make it hard for an agent to be neutral when representing both the buyer and seller, or both the landlord and tenant.
    • Tricky negotiations: An agent who represents parties with opposite interests can’t advocate for either. If a dual agent suggests the buyer make a purchase offer below list price, the agent is going against the seller’s best interest. Similarly, if that dual agent tells the seller not to accept an offer below the list price, they go against the buyer’s best interest.
    • Clients have to look out for their own best interests: A dual agent can’t possibly represent the best interests of two parties with different goals. That means a dual agent acting ethically can’t do more than facilitate the transaction. For example, the buyer will have to come up with the price they want to offer and decide whether to counteroffer without their agent’s input.

    Read this article for detailed information https://www.forbes.com/advisor...

    All the best!

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