Who Does the Realtor Actually Represent?

Posted by Ed DePrato on Wednesday, August 6th, 2014 at 10:23am.

Who does the Realtor represent when working on a deal where one single agent represents both the buyer and seller?

Realtors have a responsibility to represent their clients to the best of their ability. I believe all Realtors truly want to do what’s best for their client; to get their buyer the best possible price terms and conditions for the home they want, and to achieve the same for their sellers. It is in fact our fiduciary responsibility and obligation. One that most agents take very seriously. Nobody intends to compromise the position of anyone, but often when a Realtor represents both sides on the same transaction someone (sometimes) feels like the other party got the benefit of the better advice from the agent, or perhaps feels like the other party received an unfair advantage over something during the negotiations.

So in plain language I’d like to explain the process and offer some options to any consumer who finds themselves in a situation where the agent they’ve retained represents both parties to the same transaction. Disclaimer: I’m not teaching here, just advising in plain language.

First, interview more than one agent. Buyers often make the mistake of simply working with almost any agent who’s available to show them houses. But just like a seller would interview two or three Realtors to find one to best represent them in the sale, buyers too should speak to a few professionals before committing to working with any one person. This way, you’ll have agents explain the process (and the options you have) when working with that person on a transaction where he or she might be working for both buyer and seller.

Most agents follow strict guidelines for these scenarios. First, when this type of situation arises, your Realtor should remind you of the discussion you would have had at the beginning of your relationship; and before writing your offer, your Realtor will again offer you two options:

  1. That he or she (with your permission) can represent both sides fairly but will not disclose your motivation for buying, nor your willingness to pay any more than what is offered on paper. Similarly, you should know that if you select this option, your agent won’t be able to disclose why the seller is selling or if he or she has any knowledge of whether or not the seller is willing to accept any less than the asking price for the property.
  2. The agent will represent either you OR the seller; another agent or the agent's broker will represent the other party for this transaction.

The process doesn't need to be complicated nor does it need to result in anyone feeling like their side was compromised. But sometimes agents have previous relationships and biases and this is what can cause problems. Agents are also not supposed to consider their own interests above those of their client(s) but when a listing agent has an opportunity to represent both the buyer and seller then they (most often) stand to cash two commission cheques. Normally listing agents receive half of the commission paid by the seller because half will be paid to the buyers’ agent. This can be a powerful temptation – especially for agents who may not do much business.

At DePrato Associates, our policy is to always charge just half of the commission we would have charged if/when we (as any one agent) represents both the buyer and seller on the same transaction.

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