This is a kind of public service message I write at the beginning of every year when the home buyers come out of hibernation and get serious about looking at some real estate.
Here are some basics: If you list your house with a real estate agent and that agent brings in an offer from a buyer that she is representing you now have dual agency which means that agent cannot represent the buyer or the seller but instead becomes a facilitator. The agent facilitates the sale and can not do anything to the advantage of one party and the detriment of another. No matter what the seller or the buyer have signed with that agent previously they are not in a dual agency situation until both parties agree to dual agency by checking the box on line 229 on page 6 of the purchase agreement and signing lines 234 and 244.
What most home sellers and buyers do not understand is the way the word broker is used in the disclosure. If an agent from real estate company A lists a home and another agent from real estate company A brings in the buyer there is dual agency because they have the same broker. All agents work under a broker and most people have no idea what a broker does or who that person is.
There are a couple of large real estate companies in the area that has one broker for a few thousand agents. When they list your home they will tell you all about the networking and how they will market your home to other agents. What they don’t tell you is that if one of those agents brings in a buyer those agents go from being able to advocate for their clients to being facilitators.
The rules are broken often as agents from two offices of the same real estate company under the same broker both advocate for their clients.
Home buyers need to be aware when they go into an open house or new construction the nice agent who is showing them around is representing the seller and anything they say can be to their detriment later on. Buyers should choose an agent to work with who will work for them as an advocate and not just a facilitator.
I am just writing about Minnesota. Real estate is locally regulated and the law may be different in your state.
Related articles about dual agency Agency and dual agency, Agency in real estate, Agency and the open house, Agency? What is agency?, What consumers should know about agency
