Acting as a dual agent, representing the buyer and the seller within the same transaction, is a tough one and requires a lot of thought and dialog, from both the agent and both the clients, before firing up this agreement.
The oracle of all things real estate: the Massachusetts Academy of Real Estate describes it this way: “A real estate agent may act as a dual agent representing both the buyer and the seller in a transaction but only with the express and informed consent(paperwork) of both the seller and buyer. Written consent to to dual agency must be obtained by a real estate agent prior to the execution of an offer to purchase a specific property. A dual agent shall be neutral with regard to any conflicting interest of the seller and/or the buyer. Consequently, a dual agent can not satisfy the duties of loyalty, full disclosure, obedience to lawful instruction which are required of an exclusive buyer or seller agent. The dual agent does, however, still owe the duty of confidentiality of material information and accountability of funds. The written consent for dual agency must contain the information provided for in the regulations of the Massachusetts Board of Registration of Real Estate Brokers and Salespeople Board.” Whew!!!
Basically, a dual agent stays neutral to both clients. They’re still required to disclose known material defects in the property, still required to keep both side’s legally permissible secrets and manage the accounting of exchanged funds, just like a seller’s or a buyer’s agent. That’s it though. As a neutral party, they can’t gather and use information to affect the price or better the terms for either the buyer or the seller.
This is serious stuff. Notice the written consent mentions above? If the agent doesn’t have prior written consent from both the buyer and seller, they can be in oodles of trouble with the Real Estate Board or worse. It actually illegal to be an undisclosed dual agent in Massachusetts. This is a very delicate line to walk for a motivated, thoughtful agent, because our natural inclination is to assist fully, to get elbows deep in the transaction and make things happen. Now, the dual agent is elbows deep with all the usual activity swirling around and he’s essentially just helping the procedure move along.
The bottom line is it can be done, done well(to the satisfaction of both clients) and it provides some nice benefits to the property transaction. The agent can focus on the overall process, which can make things run more smoothly, having one point of contact for both clients. The cost of that smoothness is in representation and energetic, dedicated advocacy. Both client parties and the agent need to understand and abide by that. In certain circumstances, the cost is more than acceptable to the clients. In fact, it’s preferable in situations where the transaction is very straight forward or there’s a time crunch, like the First Time Home Buyer’s Tax Credit deadline a few months ago.
Focused on Home Buyers and Sellers in Brockton, Abington, Whitman, Hanson, Halifax and East Bridgewater