Real Estate is the #1 economic driver of the Downbeach area. Nope, it’s not tourism.
Over the years, Margate, Ventnor and Longport homeowners smartly cashed out when their modest properties were fetching lofty values. Modest housing was torn down to make way for multi-million dollar vacation homes.
With a robust amount of annual transactions, let’s review one particular, sometimes prickly portion of the home buying and selling process. Picking a real estate agent, then understanding how your relationship with that agent, will work.
Margate, Ventnor and Longport is a densely packed, ultra-competitive, real estate marketplace. That means we need a deeper dive into this thing called Dual Agency. This is where the same real estate agent/brokerage, represents both the buyer and seller, in the same real estate transaction.
- Single-Agent Dual Agency: agent represents both a buyer and seller for the same property.
- Dual Agency: Two agents from real estate office representing both buyer and seller.
The Consumer Federation of America warns:Buyers and sellers don’t always know whose interest the real estate agent is representing. This national consumer watchdog is calling for states to ban dual agency and make agency disclosures less confusing,
Real Estate Dual agency is often called “double-siding, ‘double-ending’ or ‘double-dipping’.
Dual Agency is legal in many states, including New Jersey. Is it good or bad, and just what the heck is it?
Consumer Watchdog Wants Nationwide Ban on Dual Agency
Homesellers may feel pressured to allow their agent to also represent buyers who want to work directly with the ‘selling’ agent.
Listing agents have the primary fiduciary responsibility to the seller. Remember that.
Read the report titled “The Agency Mess: Home Buyer and Seller Confusion and Costs Related to Diverse and Poorly Enforced State Laws About the Role and Responsibility of Real Estate Agents.”
Those who support dual agency say: “One agent can pull together a deal better and faster than two agents. If I represent both parties, I don’t have to worry about a bad agent blowing the deal.” WATCH VIDEO.
For the most part, one should always have their own representation, focused exclusively on their own interests. Job #1 for an agent should always be to look out for their client. They have a fiduciary duty to do that. One can’t serve two masters at the same time.
Ask the Real Estate agent whether they will be solely representing your best interests throughout the entire home purchase process. A completed form that discloses this relationship is needed.
Home sellers should demand that the agent represents only THE home sellers best interest. If they’re OK with a dual agent, ask for a discount of 2 percentage points if no other agent is involved. AKA: agent ends up working for both buyer and seller.
If you decide to work with a so-called ‘dual agent when selling your home, sellers should NOT share the lowest price they’re willing to accept. On the flip side, home buyers should be careful in sharing the highest price they’re prepared to pay for a property.
Downbeach Consumer Tip: When buyer & seller are represented by same real estate agent, or when both agents work for same real estate office — many sellers still pay same, full commission. Smart sellers negotiate for reduced commission prior to signing with broker. REMEMBER: If only one real estate brokerage is connected to a dual agent deal, they could potentially make 2x the profit.
In transactions where the buyer and seller are each represented exclusively by a single agent employed by different brokers, the commission paid by the seller to the listing broker — typically between 5 to 6 percent — is split evenly between the listing broker and the cooperating broker.
Dirty Little Secret: Unscrupulous real estate brokers incentivize agents with sweeter commissions if transaction is kept in-house.
WARNING. Home sellers take note. Your house could sit on the market longer if your real estate agent is waiting for a so-called, 2-sided deal.
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