I live in Maryland.

I found a house on the internet and called the listing agent to look at it. I liked the house. i didn't have my own agent so i ended up using the listing agent as my agent.

I didn't sign a buyer's agreement, but i did sign a Disclosure of Dual Agency form. There were no other agents involved.

The agent got a 4% commission on the transaction.

I always thought a dual agent was one person who represents both the buyer and the seller. Well, recently, i learned that a dual agent is "when the buyer's agent and the seller's agent both work for the same real estate company, and the buyer is interested in property listed by that company."

Did my agent do something wrong or unethical by acting as the only agent representing both the buyer and seller?

Thanks

If you did not sign a Buyers Agreement, than you are not going to be represented in this transaction. This agent has disclosed to you that there is a dual agency situation. (Broker doing both sides of the transaction)

It is important for you to understand that Dual Agency means that the broker (agent) will be responsible for the transaction. It has nothing to do with how the broker (agent)is representing each side.

This agent is representing the Seller, is the Seller's Broker to the Seller and has fuduciary duties to the Seller. Since you have not signed a Buyers Agreement, you the agent will be a Subagent to you and will not have any fuduciary duties to you.

"Did my agent do something wrong or unethical by acting as the only agent representing both the buyer and seller?"

The answer is no as long as the agent explained to you Agency Relationships.

------------------
If you are honest, you don't have to remember anything ... Mark Twain

Thanks for writing.

I guess i'm still confused because the paper i signed said:

State of Maryland Real Estate Commission
Consent for Dual Agency

When Dual Agency May Occur

The possibility of dual agency arises when:
-the buyer is interested in a property listed by a real estate company; and
-the seller's agent and the buyer's agent work for that same real estate company.

That is quoted from the paper i signed.

So it seems that according to Maryland, a dual agency relationship involves 2 agents. But in my transaction, there was only one agent.

The key term here is broker. A broker is the one person who is responsible for all the agent's within the office. Whether there is one agent or two agents handling both sides of the transaction, if the agent or agents are with the same real estate brokerage, dual agency will exist.

Jim,

Some additional clarification is needed, I think. You are referring to Consensual Dual Agency, I believe, where all agents within the same company represent all clients.

I work in a Designated Agency office in Iowa - the only clients I represent are MY sellers or MY buyers. If I sell a house listed by my company, I am NOT in dual agency. However, if my office were consensual dual, I would be. So for me, the only time I am in "dual agency" is when I am the listing agent AND have the buyer, at which point I am "fence sitting" and can neither advice nor advocate for either client. I do NOT represent the seller and "ignore" the buyer - I represent both, but by doing that this means I "fence sit". I must maintain confidentiality to both parties, so full disclosure (normally required) has to go. I cannot provide full disclosure to both sides and maintain confidentiality.

I think the original poster should call his agent and/or broker and ask if they are Consensual Dual, Designated Agency or Transaction Broker to get clarification.

Cheri, Realtor in Iowa

How dual agency works is dependant on jusidication. The scenario that Jim describes is the same here in British Columbia, Canada.

An agent/realtor works for a broker or agency usually as an independant contractor. The agreements are with the agency/broker represented by a realtor/agent in the transaction. Every transaction has two sides, listing and selling. Dual agency means both sides represented by the same agency/broker whether or not it is the same realtor.



------------------
Jeffery Shields
RE/MAX Select Properties
Vancouver, BC
jefferyshields.com
jefferyshields@remax.net

I am not a lawyer and I am not giving legal advice. The information provided here is for information purposes only and should not be relied upon without seeking proper legal advice.

Yes, I agree it varies by jurisdiction. Our designated agency paperwork is very clear on how our dual agency works, and it is only when I personally have both the buyer and the seller (and I am an independent contractor, as are most agents). However, there are other companies in my city that are "consensual dual", and that is the situation you are describing with Jim and yourself in Canada.

I think it is very important for buyers and sellers to understand how the agency works with their particular agent and company.

Cheri, Realtor in Iowa

In states where dual agency is legal, the real estate agent will serve the needs of both parties fully, because good business practices and professional integrity require honesty and fairness. If a buyer and seller are both represented by the same agency, they will be asked to sign a dual agent contract acknowledging the affirmative obligations of the real estate agent...

LOL, someone in India posted the best answer to the OP's question.


"Did my agent do something wrong or unethical by acting as the only agent representing both the buyer and seller?"

No, as long as this is allowed under state law.

This is probably the best explanation by Ann Joliet: (and your agent did everything right when disclosing dual agency to you)

Dual Agency
Understanding Dual Agency in Maryland

In Maryland, a single agent cannot represent both parties ( Buyer and Seller) - it's illegal. However, "Dual Agency" is permitted, but it is defined differently than in most other states.

In Maryland "Dual Agency" applies to the status of the "Broker". Dual Agency can only occur when a listing agent and a buyer's agent, who both work for the same broker, become involved in a single transaction together. The Broker becomes the "dual agent". The seller is still represented by the same seller's agent, and the purchaser is still represented by the same buyer's agent. Although neither of the agent's relationships with their clients change, in a dual agency arrangement, they are now formally classified as "Intra-Company Agents".

Example:

At Re/Max Realty Centre Inc., Betty Buffington is the Broker. If Ann Joliet, a licensed Realtor, lists your home, she would be your "Seller's Agent". If a buyer's agent working for Betty Buffington, presented a contract on Ann's listing, both agents would now be classified as "Intra-Company agents. Betty would become a the Dual Agent, since both agents are working under her Broker's license.

In a transaction when a Dual Agency situation occurs, each agent still represents their client in the same capacity as in any other transaction.


All Maryland Realtors maintain individual real estate sales licenses. Agents cannot practice real estate without being associated with a licensed Broker, who is registered in the state of Maryland.

"Dual Agency" must be disclosed to both buyer and seller and a special disclosure form accepting the "Dual Agency" arrangement must be approved and signed by all parties.

Click Here to review the disclosure form "Consent for Dual Agency"
http://www.move2olney.com/PDF_Files/Contract%20Forms/Consent%20for%20Dual%20Agency.pdf

Ah...but then you have the situation where Betty Buffington (THE Broker) is representing a Seller and now, also, will be representing the Buyer of this Seller's property - you now have Dual Agency.

And 2 very important points to remember from the Maryland Form " Consent for Dual Agency":
Important Considerations Before Making a Decision About Dual
Agency

1) A dual agent does not exclusively represent either the seller or buyer and there may be a conflict of interest because the interests of the seller and buyer may be different or adverse.

2) As a dual agent, the real estate company does not owe undivided loyalty to either the seller or buyer.

Dual Agency does have here in Minnesota as well. And you are exactly right, it is when the brokerage represents the seller and the buyer on the MLS listing.

I have found: depending upon the listing agent and the volume of listings that he or she carries, most high volume agents do not take their own "sign call" leads. They pass those to buyer agents.

Regardless, dual agency does happen and of course the real estate brokerage involved needs to make all of the proper disclosures accordingly.

Dual Agency - Dangerous Ground


Let’s assume that the buyer has consented to a dual agency relationship and is not happy with the way in which things are going and visits his lawyer.

The lawyer examines the documentation and might advise his client as follows:

1. Notwithstanding a consensual dual agency agreement, each agent has a fiduciary duty toward their principal.

2. That in order for the principal’s consent to be valid, they must have received full and timely disclosure, prior to giving their consent.

3. In order for the principal to make an informed decision, the disclosure must contain all the negative elements of a dual agency relationship, failing which, the disclosure may be deemed inadequate and not full disclosure as required and the consent to dual agency may be ruled invalid.

4. The preprinted standard form utilized by the buyer’s agent, wherein through either negligence or by design and without the express knowledge or consent of their principal, failed to remove or modify detrimental clauses contained therein benefiting the opposing party, and should be held accountable.

5. That the buyer’s agent breached their fiduciary duty to their principal.

6. That the buyer’s agent, either through negligence or by design, and without the principal’s express consent, utilized the standard preprinted Agreement of Purchase containing clauses that clearly beneficial to the opposing party and detrimental to their principal’s best interest.

One should think very carefully prior to stepping onto this slippery slope, as litigation can be both time consuming and expensive.

IMPORTANT NOTICE: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a Lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information.

"THIS IS A BINDING CONTRACT. THIS FORM HAS IMPORTANT LEGAL CONSEQUENCES AND THE PARTIES SHOULD CONSULT LEGAL AND TAX OR OTHER COUNSEL BEFORE SIGNING."

The above statement is missing from the Maryland Form and should be added and read to every client. One page forms can't be all inclusive and I don't know if this is a mandatory form to be used by agents, but regardless, agents usually are not competent or authorized to write or remove protective clauses modifying contract forms for their clients.