From the True Gotham Archives (yes I’m still away and back on Monday):
Bloodhound Blog, (which is based in Arizona) has a very interesting debate about dual agency–that is, when an agent represents both buyer and seller in a transaction. This is from Greg Swann’s latest post on the topic:
I have not heard what I consider to be a persuasively-valid argument in support of Dual Agency. Counting Our Lady Ardell in a comment, we have three testaments to personal integrity, and these I do not dispute.
But: So what?
The question is not: Can very trustworthy people effect Dual Agency in a way that occasions no overt objections from their clients? Surely this is possible.
The question is, rather: What policy should obtain in the absence of a presumptive angelitude?
The question is: Taking account that a certain percentage of licensees will be stupid, untrained, avaricious, uninformed or openly larcenous, what policy best protects the interests of the consumer — the alleged justification for our licenses?
Manhattan doesn’t really have buyer agency agreements, so the formal dual agency disclosure agreement doesn’t exist either–leaving room for frequent conflicts of interest.
Many sellers don’t ask their agent if they are representing both sides of a transaction and this is a very important thing to know. 99% of my transactions are two agent transactions where another agent brings a buyer to a property that I represent. And although I have successfully represented both buyer and seller in the othee one percent of my transactions, I often recommend that a buyer seek representation from another agent to allay any concerns about my fiduciary responsibility to the seller.
Integrity must always win in these situations. Rather than risk the perception of distrust on either side, it is much easier to involve an agent on the buyer side. I am a firm believer that the industry should put stops in place to prevent agents from representing both sides of a transaction to protect consumers. Again, not because all lack the integrity to handle this situation, but because too many do. I would gladly welcome a system that required representation on both sides of all transactions.