"Agency" in the realty business

[peterbj7]

An interesting principle has arisen in another thread.  It is the suggestion that an "agent" (by which I mean one of the realty businesses hereabouts) when working for one of the parties (buyer or seller) has nonetheless some responsibility to the other party.  Chris at Pelican said that almost directly.  Coral Beach took it to the extreme in providing paid services to both parties at the same time, without at least one of those principals knowing about it.

But I'm not trying to knock Coral Beach or anyone else here, but to explore the general question of agency in these matters.  If you employ an agent. for an agreed fee, to represent you in some transaction (whether buying or selling) is it proper for that agency then also to accept instructions from the party you are dealing with?  Exploring Chris's position, just what duty is owed to the "other" party in these transactions?

[Sunshine]

95% of the time we represent both the seller and the buyer. And this works well about 99.9% of the time.  Certainly there are times when it isn't ideal. If the deal is cut and dried, simple, cash for deed with a firm price with no conflicts then the transaction is smooth and quick.  If there is a need for more thorough investigation or if there is a need for a mortgage then we advise the buyer to retain an attorney, we revert to working for the Seller if we are the listing agent. We also advise the Seller to have an attorney review the mortgage contract provide by the Buyer's attorney.  We then work with the Buyer's & Seller's attorneys to get things ironed out and put on paper.  If we are the buyer's agent then we work exclusively for the buyer and don't work with or advise the Seller.

[2Aggies]

I have only had transactions in the states and the US Virgin's, but I can not imagine using an agent that represented both. I just do not think I would feel my best interest was being protected. I am sure there are agents who feel they can fairly represent both parties, but I will not place myself in that position. I think in some states it is not legal to rep both sides, not sure.

[Nova]

I'm with Sunshine on this one - I think most realtors understand their fiduciary duties well enough to separate "client" from "customer" and the biggest difference in duties owed to the client vs. customer are 1.  loyalty and, 2. ability to advise them and negotiate on the their behalf.  Those two duties are owed exclusively to the client.  You still must provide to both full disclosure, competence, accounting, etc.

[Milfred]

that the REALTOR® will not disclose that the buyer will pay a price or agree to terms other than those contained in the offer, or that the seller will accept a price or terms other than those contained in the Exclusive Seller's Brokerage Contract.
that the REALTOR® will not disclose the motivation of the buyer to buy or the seller to sell unless authorized by the buyer or seller. (of course in small towns everyone knows)
that the REALTOR® shall disclose to the buyer all material defects about the physical condition of the property known to the REALTOR®.
that all "comparable" property information may be disclosed to both the seller and buyer at any time.

I think many areas use at least the above in dual agecy rules, think most provinces and states all have their own rules so unless Belize has any legislation in place...
Most disputes are about dual agency. Some areas have forms for all parties to sign so everyone knows what is going on for dual agency. Some areas insist that EVERY person, buyer or seller must choose single agency only, dual agency is ok, or customer status only and sign.

Of course the larger the MLS system the lower chance that their will be dual agency.
 

[Inplub]

If the Agent works for both the buyer and the seller, does that mean they get paid by both parties?

[Milfred]

When a seller signs a listing contract it usually means they agree to pay commission.

[pedro]

I wonder how many agents take advantage of their position

could this ever happen-a person owns a lot a beach side bought say 20 years ago for 30kusd

the person dies-the lawyer for the estate of the deceased contacts the only person on the documents and it is the realtor and is told the

land is worth 35kusd and aforesaid realtor said I will take care of everything-a few weeks later the lawyer receives the cheque for 31.5k(realtor takes commission at 10%)

and the realtor ends up with a lot worth 500.000usd

would this be considered ethical behaviour and could it ever happen

[Milfred]

I guess it would depend on the size of the lot and whether it was facing the reef or not. Everone has a different opinion of value. But I do agree the lawyer's ethics could have slipped there for not getting more than one appraisal.

[pedro]

if the lawyer was in Australia-lets say the realtor ended up selling the lot for 450k

the lawyer is not at fault-lazy perhaps-but what about the realtor

[Nova]

Some would call him dirty, some would call him smart. 

[Inplub]

Some would call him rich.

[2Aggies]

I'd call the realtor a thief, I'd call the lawyer incompetent and if I was a relative I'd call a hit man.

[Inplub]

For which one or both.

[2Aggies]

Everyone knows two for one deals are the most economical!