Should an agent represent both buyer and seller in a transaction?

A: The short answer is ... it depends. It depends on the experience level of the agent, and the wishes of the buyer and seller. I would not recommend that an inexperienced agent try to do “dual agency” as it is called in the real estate world. An agent can legally be the agent of both the buyer and the seller in a transaction but only with the knowledge and consent of both the buyer and the seller. The agent is wearing “two hats” while doing dual agency. There are additional responsibilities that come along with that.

In a dual agency situation, the agent owes a fiduciary duty to both parties of the utmost care, integrity, honesty and loyalty in dealings with either the seller or the buyer. An agent may not without the express permission of the respective party disclose to the other party confidential information — such as the seller’s willingness to accept in a price less than the list price or the buyer’s willingness to pay a price greater than the price offered.

In my real estate brokerage firm, it is standard protocol to inform the other buyer’s agents if we are representing a buyer on one of our own listings when it’s a multiple-offer situation. It is important that all the buyers get a fair chance at the property. If a seller client is not comfortable with me potentially representing both parties to a transaction, I will write into the listing contract that I will only represent the seller.

Jeff LaMont, Coldwell Banker, 650-740-8808, jeff@jefflamont.com.

A: I don’t believe it’s possible to represent both a buyer and a seller in a transaction fairly. When an agent lists a home for sale, that client (seller) should be their primary concern. The seller hired the agent to represent their best interests. It would be unfair for that agent to then represent a buyer, because the agent knows the seller and their goals intimately. In a poker game, do you open your hand to your opponents? I think not.

And if you’re trying to fairly represent and guide the buyer in this situation — are you going to encourage a higher offer outside of the buyers comfort zone in order to get “your” seller more money? Will you negotiate terms and inspections in favor of the buyer in opposition to the seller’s needs and desires?

I just don’t see how one can negotiate on behalf of both buyer and seller and realize a mutually acceptable outcome. Someone is going to suffer, and typically it’s the agent. Last words: Agents, don’t be greedy.

Debbi DiMaggio, Highland Partners, 510-414-6777, debbidimaggio@gmail.com.

A: In a market that is as competitive as the one we have been experiencing, some buyers become desperate and feel like they need an advantage. This advantage often takes the form of working directly with the listing agent. There is nothing illegal about this, but we discourage it within our brokerage for professional and liability reasons. Article 7 of the Realtor Code of Ethics discourages dual agency, but let me further explain.

There are two agents in every transaction, one representing the buyer and one the seller. Each has a fiduciary duty to best represent their client’s interests. In a courtroom you wouldn’t have the same lawyer arguing for the plaintiff and defending the defendant. Why would you use one agent in a residential transaction?

When I buy or sell, I rely on my agents to best represent and inform me. There are more parts of the transaction than price.

Wallace Chane, METIS Real Estate, Inc.,

650-924-2631, wallace@metisre.com.