If you were going to court, how comfortable would you be if the lawyer who was representing you, was the same lawyer who was representing the other party? You would probably be extremely uncomfortable! In fact, I would venture a guess that you would never willingly agree to such an arrangement if given the choice.
Interestingly, this situation is extremely similar to the choice sellers are offered when hiring a real estate agent to list their property – however, most sellers don’t realize the dangers of dual agency, and unwittingly agree to it!
In a real estate sales situation, dual agency is created when one agent or two agents from the same brokerage represent both the buyer and seller in a transaction.
When dual agency is created, your real estate company will be limited as to the level of representation that it can be provide to you, and your listing agent will be prohibited from advocating exclusively on your behalf. Considering the fact that part of the reason you hired a real estate agent in the first place was for professional representation and advocacy, this is a pretty bad outcome.
Dual agency is so considered to be so detrimental to the interests of consumers, that in some states it is prohibited by law. In Minnesota, dual agency is allowed, but it cannot be forced upon you unless you agree to it ahead of time in writing. As such, the listing contract that you sign will contain a section in which you will be asked to either agree or not agree to dual agency.
When you’re going through the listing agreement and this section comes up, your agent will likely try to casually breeze through it, suggesting to you that dual agency is a common practice and is not a big deal. He may even suggest that you will lose out on the opportunity to sell to certain buyers if you refuse to agree to dual agency. However, before you so quickly agree to give up your right to exclusive representation, think carefully.
Considering the amount of commission dollars you’ll be spending for the benefit of agency representation, you may be wise to avoid dual agency and seek out an agent who is willing to serve your interests exclusively.
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