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Listing Agent Representing Buyer Means Less Money for Seller

If you’ve read this blog for awhile, you know I don’t think “dual agency” is a good idea. Dual Agency is when the Listing Agent represents both the Seller and the Buyer. In a dual agency transaction, the Agent CAN NOT provide any guidance to either party in the transaction. All they can do is facilitate the transaction (the paperwork part of the transaction). The Agent can’t answer Buyer questions like “how much should we offer?” or Seller’s questions like “should we counter?”. Answering questions like this would mean that the Agent is not being neutral to both parties. If an Agent does answer questions like these, then either party can sue the Agent.

Redfin, a real estate brokerage, released a study they did of 22 areas and found that a home was discounted more from the list price in dual agency transactions. They found that the Seller received $9,000 less in dual agency transactions for home listed at $60,000.

So if a Seller starts with an Agent that is 100% working for them, once dual agency happens the Agent no longer is working for them, but 50/50 for both the Seller and Buyer. Now add that the Seller will get a lower sale price for their home and dual agency is just a bad idea for Sellers.

A lot of Listing Agents will give a commission discount if they represent the Buyer too. While that might make up the lower sale price, the Seller still doesn’t have an Agent that is looking after their best interest.

When you are interviewing Agents to list your home, ask them if they would also represent the Buyer. Then ask them how this is beneficial for you, the Seller. That should give you an indication if the Agent’s priority is to represent you vs. making more money for themselves.

Written by Keith Byrd - Go to Keith's Website/Profile