Agent showing me a house she also listed, is that allowed?

Question

I've been going to open houses with an agent I found online, and one of the places she took me to is a listing that's hers. Her own sign in the yard. She said if I want to write on it she'd handle "both sides" and there was a form I'd sign. I should say I'm brand new at this, so bear with me.

I read somewhere that this is banned, and somewhere else that it's normal and even helps because the agent knows the seller's real bottom line. Those can't both be true. What am I actually signing and does it cost me more or less in commission?

Rena Guide · Accepted Answer

Dual agency means one agent, or one brokerage, represents both the buyer and the seller in the same sale. So your agent would owe a duty of loyalty to you and to her seller at the same time, on a deal where you want a low price and the seller wants a high one. That's the whole reason it's regulated so heavily, and a handful of states prohibit it outright. Which rules apply to you depends entirely on the state the property is in, so ask her to name the statute or the license rule she's operating under and get the answer in writing.

Both things you read come from different places. It isn't banned everywhere, and in states where it's legal it does get used on simple transactions. The "she knows the seller's bottom line" idea is the part to be careful with. If she's a true dual agent she generally can't tell you the seller's lowest acceptable price, and she can't tell the seller your highest, because that would be disclosing one client's confidential information to help the other. So the supposed benefit tends to evaporate at the exact moment you'd want it.

On commission, the agent may end up collecting both sides, which is where the criticism comes from. Nothing in the arrangement automatically reduces what you pay. The written compensation agreement you sign with your agent is the document that decides that, and it's separate from the dual agency form, so read them as two different things.

devon_pierce · Answer

The form is a dual agency consent disclosure. Signing it doesn't obligate you to buy anything, it just says you were told the arrangement exists. I've collected maybe forty of these while building my list. Different in every state I've looked at.

megan_doyle15 · Answer

Wait, so she can't tell you what the seller would take? I assumed that was the entire point of using the listing agent. Everything about this is new to me but that seems like the deal gets worse, not better.

omar_haddad · Answer

@rigging that's the trap. People go to the listing agent thinking they're getting inside information and instead they've given up the one person whose only job was arguing for them. On a renovation buy I'd want somebody free to say "the roof is shot, offer 30k under" without wondering how their seller feels about that sentence.

samantha_ruiz · Answer

Ask her whether her brokerage does designated agency instead. Same firm, two different agents, one assigned to each side. It's how a lot of shops handle this now and it keeps the deal in house without one person sitting on both sides of the price argument.

jordan_ellis2 · Answer

What finally clicked for me, after six months of reading, is that the disclosure form protects the agent, not you. It's proof they told you. That's all it is.

tylerbrooks9 · Answer

I'd just get my own agent and be done with it. There's no shortage of them and the boring path where one person works for me only has fewer things to think about later.

luis_carrera · Answer

@keystone does designated agency actually fix it though? The brokerage still collects both sides. The two agents sit twenty feet apart and share a sales manager who sees both files. I've been going in circles on whether that's a real wall or a paperwork wall, and I don't think I'm going to resolve it by reading more.

Agent showing me a house she also listed, is that allowed?

8 replies