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Dual Agency Forks Everyone

Posted by admin | July 18, 2011

You know you’ve got a faulty business model when even your own industry thinks it’s exploitive, duplicitous and downright dishonest.

That’s what ‘dual agency’ does for (or against) home sellers, as outlined in trade publication Inman News.
‘Dual agency’ is the innocuous name for having your cake and eating it too: representing the listing homeowner and also representing the buyer.  Sweet for the agent, sour for the clients. The conflict of interest is clear and compelling. Listing agents know more about the house and the sellers’ motivations for selling than would any dedicated buyers’ agent, and the two-faced agent also has inside knowledge the buyers’ resources, motivation and determination. The whole point of dual agency is that one agent gets both sides of the transaction – the listing fee and the buyers’ fee. That’s why agents present dual agency as a mere technicality.

It’s not. With double commission in the offing, dual agency incents agents to pursue only buyers that they can represent.  If a buyer drops into their laps from an online listing – and 93% of buyers start househunting online – the dual-agency agent gets a double commission for practically no extra work.  And when cultivating potential buyers from the neighborhood and their networks, agents are much more motivated to primarily pursue buyers who agree to dual agency.

As noted in the Inman story, dual agency offers all upside for agents and all downside for clients. But what’s a little integrity when a commission is within reach?

Image courtesy of Morguefile contributor gracey.