Should Dual Agency Be Legal?

Dual agency, put simply, is one agent representing both the seller and buyer. The agent is responsible for the interests of both parties. In Oregon, the buyer and seller must agree, in writing, to dual agency. Transactions where there is an agent for the buyer and an agent for the seller is called a co-op transaction. The footer at the bottom of this page has a link to the Agency Disclosure Pamphlet.

As a rule, we will not be dual party agents. In our opinion, one person can not successfully represent two competing sides equally. Dual agency is great for the agent- they typically earn the entire commission or take a small discount from the full commission offered if it was a co-op transaction. It also creates a greater financial incentive to “get the deal done.” The financial windfall often leads to softer ethics as evidenced by the fact that the majority of real estate complaints involve a dual agent (source OAR GRI conference in Sunriver 3/06).

The only place I’d take a softer stance on dual agency is with new construction but ultimately, dual agency seems to be a bad idea. In our case, if we find a buyer that is interested in our listing, we will refer it to another agent.


11 Comments on “Should Dual Agency Be Legal?

  1. We do not have appointed agency per se but that is what we opperate under. Each agent is indpendent to the office.

    Yes, we would collect a referal fee if the buyer used the agent we referred, but in all honesty, the typical buyer knows an agent that they will use in lieu of us.

  2. I agree that dual agency is a bad idea. Here in Maine (home of the other ‘Portland’), dual agency is legal, but a choice must be made at the company level whether dual agency is allowed. If no dual agency is chosen, every agent in the company represents the client.

    As a company, we chose “appointed agency”, another option under Maine law that says that only a specific agent in the company represents the client. This means that in the same transaction, I can represent the seller and my business partner can represent a buyer. This avoids having to refer to another company while giving both sides full representation.

    One question, if you don’t mind me asking, when you have to refer an interested buyer to another agent, do you get a referral fee?

  3. I don’t particulary like dual agency, but not sure it should be illegal. As a mortgage broker I’ve see it work for the good and bad.

    The bad is when there is no real negotiation involved. The realtor is just looking for a quick sale at maximum price. I also feel that I can’t be completely open with the realtor about issues that might prevent them from giving a strong vote of approval regarding the borrower. This is usually the case if I don not have a relationship with the realtor.

    The good is when we have a real borrower, with solvable issues, and the dual agent is more willing to hang in there. This works best if I have a relationship with the realtor and feel that I can be open and honest with the situation.

    This can also happen without dual agency, it just takes more effort between the realtor and loan officer to build that trust.

    It would seem that a possible solution would be a state or federal form that details the pros and cons to the buyer and seller that is mandatory. It should be signed by both buyers and sellers and kept a part of the permanent record.

    Out of curiosity, what does Oregon require as far as disclosure for dual agency?

  4. >Agency Disclosures are a required handout at "first contact."  The top part of the earnest
    money agreement (purchase contract) has a short rehash and signatures required portion as the first section.

  5. It would seem it hard to complete #2 as a dual agent, other than principle broker where your agents are representing individual buyers and sellers. It would seem “negtiation” would put on of the two at jeopordy. All you can do is give advise and suttle offers and counters back and forth.

    The form also does not give pros and cons in lay terms that anyone can understand. It appears to be more of a summarization of law.

  6. I couldn’t agree more. It is much easier for us to say “We represent you. They are represented by someone else.”

  7. I don’t mind representing both parties at all. I have done so a few times and actually consider it to be one of my strenghts. It’s quite simple in my opinion.

  8. I don’t think that I can be convinced that both the buyer and the seller got the best deal that they could have. Unless you cut your commission in order for the buyer or seller to gain, the other party had to give.

    Would a plantiff and defendent be well served by a single attorney? One side is going to pay but the attorney is getting paid either way. I’d argue this is the same for real estate.

  9. Dual agency simply means you represent, I.E. look out for the best interests, of both parties. You immediately refer to money. This, in my opinion, is the problem with dual agency. It CAN be abused if put in the hands of the wrong person, just like anything else.

    It is not about money, it’s about making sure everyone is represented to the fullest.

    I can’t say how many times I have felt sorry for the other party who IS being represented by a Realtor. I’ve had other Realtor’s clients actually call me for advice because their Realtor is nowhere to be found, probably because they are out there running wild with one thing on their mind….MORE MONEY. I’ve had other Realtor’s clients call me and say “hey, we would like to sit down with you and your clients, we feel our Realtor is messing things up and we would really like to make this work”.

    Follow the rules, put clients interests first, remain ethical, and you will have no problems with dual agency.

    Would a plaintiff and a defendant be well served by one attorney? Again, you reference money. Not good. If money is of no motivation, and your true interest rests with doing the best you can for each client, then you have done your job and that is what counts. Sure one person (plaintiff or defendant) will prevail, but that is the point. One is supposed to prevail, and most likely should deserve to do so. A little different than Real Estate.

    These are my opinions, others obviously feel different.

  10. We won’t agree. No matter how we feel as Realtors and constantly striving to do the best for our clients, the client that feels slighted sees nothing but money. Represent both sides and you contribute to the “most likely to be sued” statistic from the Real Estate Agency.

    There are lots of stupid Realtors. No doubt, we’ve all worked with them. Are they doing the best for their clients? No. Is there a little of digging your own grave when you enter into the largest transaction of your life with someone you just called because there phone number was hanging in the yard? Yes. A changing market should see said stupid Realtors leave the industry.

    For all the buyers we’ve worked with, we’ve been interviewed a handful of times. Why is that?

    Regardless of how badly a Realtor is screwing up the transaction, the Realtor on the other side can say little more than “talk to your Realtor or their principle broker.”

    Unless the dual agency Realtor is a machine, I cannot be convinced that either the seller or buyer did not miss some opportunity that would have worked out better for them, monetary or otherwise.

  11. Dual agency should be legal. If you feel your rights have been violated.

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