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Real Estate Fight Club

19
Feb 2020

Episode 21: Can Agents Effectively Represent Both Sides of the Deal?

February 19, 2020

In Episode 21 of the Toe-2-Toe Podcast, hosts Jenn Murtland and Monica Weakley duke it out over whether agents can effectively represent both sides of the deal. Hear why Jenn feels that agents can do this effectively because they can get both parties what they want. Then hear why Monica thinks it’s very difficult to fulfill your fiduciary duty in this scenario. Listen to the end of the episode for a major epiphany Monica has about credentials.

Episode Highlights: 

  • Can agents effectively represent both sides of the deal?
  • Jenn says yes.
  • Her concern in this situation is getting both the buyer and the seller what they want.
  • There have been times when buyers have come that Jenn doesn't feel comfortable with and she has sent them to other agents.
  • When Jenn has represented both sides, the transactions have been very smooth.
  • Monica makes a distinction between representing both sides legally vs. representing them effectively.
  • Monica is concerned about fiduciary responsibility. If you have certain knowledge about one side, that may get in the way of your ability to represent the other side.
  • Jenn disagrees.
  • Jenn feels that the more knowledge she has, the better she can represent their interests.
  • Jenn tells the story of two people sitting with two oranges. They both want both oranges. Neither of them get as much as they could have had due to a failure to communicate.
  • Many times buyers and sellers can't communicate what could work.
  • Jenn imagines that representing both sides might create opportunities for agents to get creative about how to serve everyone’s needs.
  • Monica asks us to consider a hypothetical transaction. Let's say the listing price a home is $250k. A buyer comes along unrepresented. The buyer asks if they should go in over asking but you already know that there isn't anyone else interested in the house.
  • Monica feels that she would have knowledge that would help them not pay top dollar for this house. In her mind, this creates a problem when she considers fiduciary responsibility.
  • Jenn asks what the definition of fiduciary responsibility is.
  • Jenn says that she doesn't know if the language you’d use to talk about making an offer in this hypothetical transaction necessarily changes.
  • Jenn asserts that people are coming from the assumption that buyers always want to pay less and sellers always want to pay more and that is not always the case.
  • There are situations where Monica feels she can't actively represent the buyer because of something she knows.
  • When you're all-in on a listing and an opportunity for dual agency comes up, you have to downshift into another role.
  • At that point, Monica feels that you need to explain to your clients how your role is shifting.
  • Jenn argues that the average agent usually is not a pitbull, which nullifies Monica’s concern about downshifting.
  • This was a heated discussion among their realtor friends.
  • There were many comments about how in some states dual agency becomes transactional agency. 
  • Many agents leaned towards no.
  • Monica states that she does not think agents can effectively represent both sides of a transaction.
  • Jenn reminds us that the average agent sells 5-10 houses a year and they are not necessarily doing their full fiduciary responsibility.
  • Not every agent should do dual agency.
  • Monica has the epiphany this is the one designation she would see to be effective.

3 Key Points:

  1. Representing both sides of a deal can go smoothly because as an agent, you are simply focusing on helping both parties get what they want.
  2. Representing both sides of a deal effectively could be difficult based on the knowledge you may have about both side’s interests.
  3. Not every agent should do dual agency and perhaps agents would be served by obtaining a certification in dual agency if they want to offer that service.

Resources Mentioned: