Good Bye Dual Agency
Posted by Elizabeth Biberger on
The new rules came into effect on June 15th of this year. It has been an adjustment, but I think we are now settling into a rhythm. On one hand, many consumers are glad to be rid of the “Dual Agency” and on the other, I have had some consumers resent that their favourite agent may not be able to represent them in their transaction due to a conflict of interest.
The simplest and most common form of dual agency was when a agent represented both a seller and a buyer in the same transaction.
Since the new rules came into play, I have had to refer out two of my buyers who wished to purchase one of my listings. One had been looking for their next home for some years, and I listed it shortly after June 15th. They were disappointed that they could not deal with me after many years as their trusted agent. In addition to their disappointment, my years of providing guidance and showing them homes was not fully rewarded as the commission had to be split with another agent.
The matter is complicated. It became apparent to my team a couple of years ago that dual agency was wrought with problems. We decided that dual agency would be reserved for those situations where both buyer and seller were existing clients and consented. Or where a seller was fine with dual agency, despite a very clear explanation that it was not in their best interests, and a buyer, despite a similar warning, also consented to the process. My explanation of dual agency usually resulted in most sellers refusing to allow dual agency in the sale of their home. In other words – it was how the message was delivered which was one of the problems with dual agency. Agents had their own opinions on whether it was good or bad and framed the explanation accordingly.
In my mind, the real problem with dual agency was listing agents encouraging dual agency with a stranger (buyer) who had approached them on their listing. I came to realize that dual agency compromised our fundamental obligation to be loyal to our seller. Dual agency had the potential of putting our interests first, above our clients because we would have an opportunity to earn sides of the commission. This was permitted under the rules, but when one considers that the interests of the client must be put above the financial interests of the agent, there was certainly room for agents to forget their primary duty to the client. However, life is a journey and after almost 31 years selling real estate I can see that all the changes over the years have brought us to a place that is more consumer focused. Each step along the way has improved our industry which makes us more professional.
Dual agency is no longer an option and under our new rules, and I think that the consumers are probably better served, despite some of the shortcomings of the new rules.