Should an Agent represent both a Buyer and a Seller?

The first question a client should ask themselves before deciding to use a single Agent to represent both the Buyer and the Seller should be... How can one agent fairly negotiate on behalf of both parties?

Here are a few scenarios, for, and against.

1. In the case of a Seller’s market, a single Agent might be able to represent both parties because the offer must beat out all other offers and any Buyer competing in a Seller’s market will know their offer must be non-contingent and the highest offer in order to prevail with nothing to negotiate --with an "as is" over the asking price offer. However, a Buyer, new to the market, will not understand this yet and might feel the Agent is pushing for an easy sale or working in favor of the Seller. But in the case of a seasoned Buyer there is nothing to negotiate. It’s a done deal as long as they are the highest offer with favorable terms.* However, I would suggest, in fairness to the Real Estate community and other Buyers that the Agent has their Broker or Manager oversee the presentation of all offers. Optics matter, even if the Agent is demonstrating fair dealings.

In real estate, reputation and integrity is key to a long lasting career.

2. In a balanced market where multiple offers are not the norm, how can one Agent negotiate on behalf of both parties, fairly? The agent writes an offer for the Buyer. The agent presents the offer to the Seller. If the Seller readily accepts, did the Agent really try and get the highest and best offer for the Seller? Or, what if the Seller counters the Buyer, the Buyer goes back to his/her Buyer clients and discusses the Seller's counter offer? In this situation, I do not see how an Agent can counsel and guide both the Seller and the Buyer and provide utmost care to both. If the Agent is aware of information or insight from either the Buyer or the Seller client, and does not disclose that information the Agent is not being fair and honest. It’s a tricky situation; and more than that, an Agent can be held liable if things go awry.

3. Each Agent must decide for themselves how to handle this situation. Personally, I will only represent both parties if both parties insist; but not always. A few times in my 30 years I was asked to represent both parties. Two of the times I recall this happening was when a home was not selling, and the other was when the home had gone into escrow, and then fallen out of escrow, so in both cases each Seller asked that I represent both parties in order to get the deal done. In both scenarios I was asked to cut my commission. The public may say we should be happy with half a commission as Agents get paid big commissions, but what one doesn’t know is all the work that goes into preparing a home for market along with the expense of marketing the home. Not to mention, the work it takes to represent both parties is very stressful, and the workload is no less, it’s actually double.

4. If you have a team, or a partner like I do, and we have a Buyer who wants to work with us and we also have the listing on a property, Adam and I will each represent one of the parties. Each time we list a home there is usually a point person or lead. So if I obtained the listing and we have a Buyer who wants to write an offer, I connect the Buyer with Adam and step away entirely. I end all communication until after the deal with that Buyer. We simply do not want any issues with other Agents, other Buyers or our Seller, so we keep things very separate. I would rather lose a deal fairly than win a deal unfairly. It’s cut and dry for us.

To further note, Agents in the communities they serve are well aware of the Agents who lack integrity.

5. In the case of new construction it could/would be easier to represent both a Buyer and a Seller. In the case of a new build the Seller is turning over a new property so the walk through is more of a Check List or To Do List. However, be certain to get the To Do list signed off prior to close of escrow. It’s imperative that BEFORE close of escrow the Buyer is provided with all permits, plans, reports, engineering and architectural designs. In a new build it’s about dotting your I’s and crossing your T’s. It’s less about negotiation. 

If you have a real estate question, or want to learn more please reach out.