Do you understand dual agency when it is explained to you? Most people don’t. At Carolina Living Real Estate, we make every effort to train our agents and our clients on what we can and can’t do in the dual agency scenario. Below is not an explanation of what it is but it IS an explanation of what we can and can’t do in this situation!
What will a Broker who is acting as a standard (non-designated) dual agent be able to do for his/her two principals?
The broker must treat both fairly, equally and impartially and act in good faith with/to each.
A broker acting as a non-designated dual agent has the following duties and May perform the following services:
- MUST disclose all material facts to both principals
- May provide standard transactional forms to each, such as ‘Offer to Purchase’ and related addenda, and assist each in completing the various forms, but may not advocate on the behalf of either party or advocate on behalf or advise either in negotiations.
- The broker could provide each party with information concerning comparable sales of perform a comparative market analysis (CMA) for each. In all probability the Broker performed a CMA for the seller prior to marketing the listing, and to treat both parties fairly and impartially, should be permitted to perform similar service for his/her buyer-client. The CMA may, but need not, be the same CMA previously prepared for the seller, depending on the time elapsed.
- A broker could inform each party of the availability of resources to answer questions a party might have.
- The broker must promptly deliver documents between the parties regarding the contract etc., and may remind each party of impending deadlines
- The broker should attempt to facilitate communication and performance of each party of his/her contractual obligations.
- The broker may provide a list of various service providers for each party’s consideration, whether attorneys, inspectors, lenders, appraisers, etc.
- The broker will be accountable to both principals for any trust monies received.
- A dual agent might assist both parties in determining issues such as whether a requested repair is a ‘necessary repair’ under the terms of the contract or whether the buyer has demonstrated good faith efforts to obtain financing.
- The broker acting as a ‘standard’ (non-designated) dual agent has the duty not only to disclose material facts to both principals, but to also disclose any information the broker has/knows about either principal to the other unless the parties has relieved the broker from this common law duty to disclose all information by the terms of the agency agreement. (This is not necessarily true for designated agents).
A broker/dual agent May not:
Suggest to either party an amount to offer or counter offer on a property. (The broker/standard dual agent must refrain from recommending any course of conduct to one principal which might compromise the bargaining position of his/her other principal).
Designated Dual Agency
The difference between Standard dual agency versus designated dual agency is that while the company and most of its affiliated agents remain neutral and impartial, those brokers designated to represent the buyer or seller respectively each retain their advocacy and advisory abilities for their designated client and owe their fiduciary obligations only to that client.
Thus, the designated brokers may continue to advise, counsel and make recommendations to their respective clients, so long as they did not possess confidential information about the other party at the time of designation.
