Friday, May 16, 2008
Get Represented. Understand Agency.
So many consumers aren't fully informed about how real estate representation or agency works. When you see a sign on someones lawn advertising the home for sale, that agent represents the seller, first and foremost. Idaho law allows that agent to also represent you as the buyer. This is called "dual agency" and both parties have to consent in writing to it. But is this really the best situation for a buyer? Can a seller's agent really represent a buyer at the same time even though the law allows it? It seems like an obvious conflict of interest to me. Most agents want to represent both. It's called "double ending" the transaction because they will get 2 commissions instead of one. This can breed dishonesty. I kind of liken it to showing up for court and hoping the other person's attorney will represent you as well. I believe it is forbidden in our legal justice system, but not in real estate. So many times I have heard that people think they will get a better deal if they go direct to the agent. Maybe they can, but I have also heard the regret that the agent didn't negotiate hard enough on their behalf or other inherent issues that could arise with dual representation. With buyers there is little reason not to bring your own agent to the table. The buyer's representative (agent) is payed by the seller's closing costs. That's right, it's totally free to get a Realtor to represent you as a buyer. So why do some do it anyway? I think lack of information or misinformation.
