Ask Our Broker With Peter G. Miller: Double Agent?

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Question: We found a house we would like to buy. As it happens, in our community several large brokers dominate the listings. Our salesperson works for the real estate brokerage, which has also listed this property. Does our salesperson represent us or the seller?

Answer: In today’s world there are four basic answers.

First, we have brokers that act as a “single” agent. This is a broker that represents either a buyer or a seller but not both in a single transaction.

Second, we have a disclosed dual agent. This is a case where a salesperson with the brokerage has listed a property and a different salesperson with the same brokerage has found a buyer. Since both salespeople work for the same brokerage, a single broker is actually representing both parties to the transaction.

How can one broker represent both the buyer and the seller? Smith is a disclosed dual agent, both parties know and understand Smith’s role and have approved it in writing and in advance. There are very strict rules regarding what Smith can do or not do as a disclosed dual agent.

Third, there can be undisclosed dual agency, a huge no-no in real estate. In this situation a broker represents a buyer or seller but undermines the client. For example, a home is listed for $600,000 by the listing broker. That broker tells prospective buyers that the owners are getting divorced and would really take $550,000. Since the broker is only authorized to mention the $600,000 listing price, anything less helps the buyers, which means essentially that the broker has undercut the ability of his or her client to get the best possible sale price. Brokers must be careful regarding what they say otherwise they can become accidental dual agents, a situation to be avoided.

Fourth, in some jurisdictions a broker may serve as a “transaction” or “'intermediary” broker, a neutral party who tries to bring the buyer and seller together in an effort to create a transaction.

With single agency, a listing broker will represent a seller. There is a listing agreement that gives the listing broker the authority to sell the property at a certain price and with certain conditions. The listing agreement also establishes a commission rate between the owner and the listing broker. If a buyer broker brings in a purchaser, at closing the commission established in the listing agreement will be shared by the brokers.

For details and specifics, sit down with local brokers and ask who they represent. Ask what they can and cannot do in your jurisdiction and how commissions are handled.

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Peter G. Miller Peter G. Miller is author of "The Common-Sense Mortgage," (Kindle 2016). Have a question? Please write to