The practice of real estate Dual Agency brings so many conflicts to the table; I wanted to share some of them. Over the last 5 years we have sold hundreds of REO’s (foreclosures) and now with the market improving we are seeing fewer and fewer REO’s come up for sale, which is fantastic because it means we are dealing with regular sellers and the market is starting to improve. Take a look at this email I received about a new foreclosure listing we have. We have received similar e-mails inquiring about dual agency at least once a week for the last 5 years.
Please read the bottom first, as this will show you the original email sent to Carlos, along with Carlos’ response at the top. This is just one example of why I hate real estate dual agency. In addition, I created a video where I talk about Why I Hate Real Estate Dual Agency. Please also take a couple minutes to view.
My question is similar to what Carlos stated in his reply above: Why would we enter into a dual agency relationship for just one extra real-estate commission and jeopardize our relationships with various banks and put our careers and reputations at risk? In fairness to the email above and many other emails we have received, the investor is not flat-out asking us to do anything illicit like look the other way when higher offers come in – but it is pretty obvious when you read between the lines.
You walk a very fine line with dual agency, and that’s a line that I’m not comfortable walking. What happens if another offer comes in at a higher price? In this scenario we had 28 offers on this REO listing. Our investor buyer will certainly want to know that number and expect that we will tell him the number that he will need to be at to make the deal work. How is that fair to the other party who submitted the offer? How can I negotiate on behalf of each party and represent their best interest? Should I walk in and out of a room during negotiations or have a 3 way conference call? It just doesn’t make sense and someone always ends up losing out (in our little example above it would be the seller).
I really wish dual agency would go away!!!