When you hire a real estate agent, it is possible that they represent both the buyer and the seller within a single transaction – this is called dual agency. The best interests of each party are then shadowed by what the realtor stands to gain.
Imagine if your server at a restaurant was paid commission on how many expensive steak dinners they sold. The server would benefit from telling you to buy that high-ticket item, despite the actual quality of the steak or the overall value of the meal. And you may never know if you were deceived or not.
Dual agency is a contentious issue, which led some states to prohibit it outright (most recently British Columbia in 2018). In California, it’s required to disclose a dual agency situation to the buyer and the seller in writing, before a purchase contract is finalized.
Dual Agency Disclosures Are Often Confusing
Unfortunately, these disclosures tend to be confusing for homebuyers, who may not fully understand what they’re signing off on.
The practice of dual agency recently came under fire from the Consumer Federation of America (CFA), which published a blistering report on the dangers that homebuyers or sellers face when working with a dual agent.
CFA even went so far as to recommend a federal law banning dual agency in all 50 states in order to protect consumer interests!
The CFA also revealed that many homebuyers and sellers assume that the agents they’ve hired are on their side, which is not always the case. In turn, when faced with more wary homebuyers, agents are often met with mistrust.
The CFA is determined to establish a more positive system of transparency and informed consumers, which in turn will benefit everyone involved.
How to Avoid Working with a Dual Agent When Buying a Home in San Diego
When I started Globella Buyers Realty in 2008, I chose to work exclusively with homebuyers (never sellers). One of the reasons I made that choice is that I wanted to give my clients 100% confidence that I would NEVER be a dual agent.
What’s the point of hiring a buyer’s agent, if that agent may end up also representing the seller on the home you buy?!
When your buyer’s agent works for a company that never takes listings, you NEVER have that problem.
A buyer’s agent can’t become a dual agent IF they work for a company that NEVER takes listings!
And that’s a great reason to look into working with Globella Buyers Realty (as your San Diego exclusive buyer agent).For further information, check out CFA’s full report.