Just when you thought you had all this "agency" business figured out, here are few wrinkles.

What happens when both the buyer and the seller are represented by the same real estate agency or by the same real estate agent?

It's important to point something out here....When you list your home for sale with a real estate agent, that listing actually belongs not to the individual agent, but to his or her broker - or firm. For example, when I list your home for sale, the listing actually belongs to the agency under which I practice, in this case, Century 21 Old Richmond Realty.

The same holds true if you're a buyer and you've entered into an exclusive buyer's agreement with me. You are the client of Century 21 Old Richmond Realty, with me (and my broker and every other agent in my office) acting on your behalf.

Back to the question - What happens when both the buyer and the seller are represented by the same agency or broker?

The agency or broker is a Dual Agent .

Dual Agency exists when the same firm or brokerage represents both sides to a transaction.

And - this is very important - your agent is required by law to disclose this state of Dual Agency at the first possible opportunity.

Broker as Dual Agent

Say another agent in my office has a client who makes an offer on one of my listings. This is commonly known as an "in-house" transaction or sale. My broker, the other agent who has the buyer, and I are all Dual Agents.

Individual Agent as Dual Agent

If an individual real estate agent represents both the buyer and the seller, that agent is also a Dual Agent. For example, say I have a buyer/client (he's signed an exclusive buyer's agreement with me to represent him) who is looking for a 4 bedroom colonial. I have just listed a home for sale that I think would be a perfect match for him. My buyer decides to make an offer to purchase my listing. I and my broker are dual agents because we represent both the buyer and the seller.

Duties of a Dual Agent

The duties of a dual agent are basically the same duties I listed in my article Understanding Agency.

Let's have another look at the duties of a standard agent:

• perform in accordance with the agreement with their clients
• act in their best interests
• maintain confidentiality exercise a level of care and service in line with industry standards
• obey the law and regulations.....

I'm obligated to tell my clients everything I know about the property and the transaction including all information about the other party that could affect the sale. But how do I do this and still maintain the confidentiality of both sides?

Answer - I can't!

Dual agency places some limitations on the duties I owe to my clients. When I and my firm represent both parties in a transaction, performing a duty to one client may be limited by my duty to the other client.

Suppose that my sellers/clients have told me in confidence that they are planning to get a divorce and that they are looking for a quick sale, and that they would be willing to accept a lower offer just to wrap up the sale as quickly as possible. My buyer/client would love to know this! It would provide him with leverage as to the final purchase price and terms of closing.

But I can't share this important information with him (and neither can my broker or anyone else in my firm) because.....

The duty of confidentiality supercedes my duty to tell my other client everything I know.

So, how does this translate into the real world?

I'm limited in my ability to fully represent both clients. I can't advise my buyer as to what to offer or my sellers as to what is an acceptable offer, etc. I* can only help put the transaction together by acting as a "mediator" for both clients. I can only present the offers and counter-offers, etc. of both sides, without offering opinions or advise, and let them decide for themselves.

* Whenever I refer to "I" or "me" or "my" when discussing dual agency, the same holds true for my broker (Century 21 Old Richmond Realty) and all the other agents affiliated with my firm.

Now, this arrangement can work out quite well, especially when I'm dealing with clients on both sides of the transaction who know what they want and how they want it and as long as both sides have some experience in buying and selling real estate and I'm confident that they know what they're doing.

However, there are many people in the market as first time home buyers. And there are many sellers who have never sold a house or haven't sold a house in a long time. What do I do if one or both parties really want and need my advise and guidance?

That's a tough one....

                                Wait!.....

                                               I know what to do!.....

I'll go to my broker and ask her to "designate" another agent for one of my clients!

See my article on Designated Agency.