Should I consent to Dual/Designated Agency as a seller?

[cduhn]

I'm a seller getting ready to list in NC. I need some advice on dual agency consent.

We've selected an agent from a fairly large national agency to represent us. We received the agency's standard form to consent to dual agency. The form indicates that they practice designated agency whenever possible.

I've googled for hours, and everything I can find suggests that dual agency is a horrible idea and should be avoided. I see very few people stepping up in defense of dual agency. Most of these articles are written by real estate professionals for real estate professionals. They talk about conflicts of interest and liability for the agent, but no articles that I could find focus specifically on the interests of the seller.

When I told my agent that we planned on declining dual agency, she said, "Ok. You can do that, but you need to understand that this will exclude about 800 agents from being able to show your house." She said I would be the first seller she's ever had decline dual agency. This gave me second thoughts. Some houses in our neighborhood have been on the market for over six months, so I don't want to do something that will drastically limit our addressable market.

I said, "what if we start out without dual agency, and then allow it after a month or two if the house hasn't sold?" She said she would have to check with the real estate commission about how to do this, but she had concerns that it would be difficult to get agents to come visit the house after they were told they couldn't show it.

After checking with the real estate commission, she has now come back with a proposal to add a remark on MLS saying, "agents of (her agency) must be a subagent of the seller; No dual agency."

What should I do? If I decline dual agency and I add this remark on MLS, will I drastically reduce the amount of exposure my house will get, resulting in lower offers due to less competition, and increasing the chances that my house will go unsold for months?

If I accept dual agency, am I likely to walk away from a deal with a much lower price than I would have otherwise received?

One or two articles I saw on dual agency seemed to suggest that the inherent conflicts of interest generally tend to work against the buyer. Does this mean that as a seller I should accept dual agency so that these conflicts of interest can work in my favor?

Advice and opinions are deeply appreciated.

cduhn

[Ryan Ward]

Someone in NC should probably chime in here as this stuff can very state to state and i am not in NC, but, here goes a start...

I THINK you are confusing 'dual agency' and 'designated agency' which refers to what happens if the listing agent also procures the buyer and represents them in the sale of your home with 'cooperating' with other brokers by allowing them to show your home and represent a buyer as the selling agent - competely independent from you or the listing agent.

'subagency' would be exactly as you said, but dual agency involves a buyer and NOT another real estate agent/broker. Designated agency is when your agents broker 'designates' someone else in their office to represent the buyer to prevent a conflict of interest, usually.

As a practice, some brokers have decided not to allow any kind of dual agency which simply means that the listing agent cannot represent the buyer and the seller in the same transaction as a client as well as subagency, which is when a buyers agent comes in and also works for the seller instead of for the buyer. In this case, you would possibly find yourself in designated agency.

If another agent brings you a buyer, there will be no dual agency and there will only be designated agency if that other agent is under the same broker.

If another broker or agent from some other broker brings you a buyer, there should not be an issue.

In dual agency, the buyer would likely also have to consent in writing to the dual agency and being represented by your agent, but, I don't understand why you are dealing with this right now which is why it seems there might be some kind of miscommunication.

Your home isn't even listed and you are already talking about dual agency...Other than to say that it exists and if it does would you be ok with me representing you and the buyer, I don't see why it is already an issue because it won't matter unless the buyer also agrees...

[cduhn]

Thanks for the reply Ryan. I think I understand the distinction between dual and designated agency, but maybe I'm confused.

Based on what I've read, I believe dual agency (at least in NC) refers to any case where the buyer's agent and the seller's agent work for the same company. This would include the specific case where a single agent represents both the buyer and the seller.

Designated agency, as I understand it, refers to a case of dual agency where the broker in charge has selected separate agents to represent the buyer and seller. The articles I've read say this is still dual agency, and therefore it doesn't eliminate the inherent conflicts of interest.

The specific document I'm wrestling with is a "dual agency addendum". There's a sample here.

Upon further googling, I'm starting to think that this may just be a dysfunction of how agency works in North Carolina. The comments by MikeJaquish in this thread were enlightening, and seem to reflect what I was hearing from my agent.

I'd hate to think that I'm coming across as an unreasonable or difficult client. I'm just trying to protect myself and get as much value as possible for my house. If that means consenting to dual and/or designated agency, so be it.

Curtis

[Dallas Broker]

you could always agree to dual agency, but with the understanding listing fees will be reduced to certain percentage for this type of particular transaction, just add into special provisions.

[CarlaM]

Ryan has given you good information. You need to expose your property to all agents to get it sold in the least amount of time for the best price. You are worrying about something that may not even occur. Get your house listed and cross that bridge when you get to it.

[cduhn]

Thanks CarlaM. The problem is that I think I'm being asked to cross that bridge now, even before I list the house. The Dual Agency Addendum that I linked above is attached to our listing agreement. Unless I'm misreading it, this is my one and only chance to accept or reject dual agency. This may just be a North Carolina thing.

Regardless, I think I'm going to just accept it and take my chances. I trust and respect my agent, and in this market I don't want to risk not being able to sell my house.

Thanks, everyone for the advice.

[coastal]

I think the fact that all of this has to be put in writing is ridiculous. It's unfortunate that so many people are not trustworthy.

I am a dual agent if I list your house and find you a buyer for it. Is that not what you are hiring me for in the first place?

Usually when you hire a Realtor you are hoping they are going to be the one to sell your house don't you? If not why did you pick them as your Realtor rather than one of the other real estate agents in town?

I know in the real world it is often another agent who ends up selling the house that I list but in a perfect world I would have the magic skills to be a dual agent for every one of my listings.

As a dual agent I personally don't tell the buyers anything I am not supposed to and the same goes for the sellers. Usually they don't tell me much that would make a difference anyway.

If you don't trust your agent not to keep your secrets don't tell them your secrets. Divorce sale - don't tell me about it, someone died - I don't need to know, bankruptcy - keep your mouth shut. All you need to tell your agent is the price you want for the house and all the great things your house and neighborhood have to offer. As long as you follow this advice dual agency really makes no difference. An agent can't tell the buyers your motivation to sell or your bottom line if they do not know what it is.

[Sam Chapman]

In Texas there is no duel agency, but there is an Intermediary relationship that can happen. This occurs if I list you house and find the buyer, but also if I list the house and someone under my same broker finds the buyer. In the first case, all I can do is push paper back and forth. I really can not work FOR anyone. In the second case, even though the broker is the Intermediary, both sides still have representation. I will not do the first as I truly want to work for someone, but the second isn't a big deal at all.

[Bob Crain]

cduhn,

It sounds like you have a firm understanding of the agency relationship.

Unlike many of the other agents here, it is my belief that you hire an agent to market your home and provide you with professional representation. Not to sell it.

NOW before anyone shoots their morning coffee out their noses... If the home is priced right, marketed properly, and you get sound advice during the transaction, your home will sell.

Look at it this way... If you were going to go to divorce court would you want to be working with one attorney or have one only representing your interests?

[coastal]

Bob, I'm not disagreeing with you but how many clients do you think, think that way? They think they hire us to find them a buyer and they think that we are going to be the ones to do it.

Who do they complain to when their house does not sell? They don't complain to the other 1400 other real estate agents in my county, they complain at me. I may not be the norm but I sell close to 80% of my own listings AND market them better than most of the agents in my area. I'm more than happy to let other agents sell my homes, in fact I'd be happy to never leave the office other than to go on listing appointments but for some reason I get a ton of e-mail and phone calls with people asking to see my listings.