The other day we were wondering, how often does the listing agent for a home also represent the buyer? This situation is called Dual Agency, and is something we’ve explored in the past. However, we never looked to see how often it happens in our area.
To attack the question we looked at all the single family home sales that have closed so far this year in Hartford County. The data came from the CTMLS, which is deemed reliable but not guaranteed, and was gathered on the afternoon of the 20th.
The same agent represented both the buyer and the seller in about 1 out of every 11 deals. There were 4,678 total sales, and 9.1% of the time the buyer and seller used the same agent.
We really had no idea what to expect as an answer, but 9% seems reasonable based on our experience. Agents have an opportunity to sell their listings to unrepresented buyers (who become their clients) through the advertising of their listings and through open houses. We would also expect agents with a very strong listing presence in a particular neighborhood or town to be more likely to sell their own listings since they would also attract a pool of buyers interested in their territory.
This quick analysis leads to a number of additional questions that would be interesting to research. For example, is the percentage of dual agency deals seasonal? Has it changed over time? Are some agents more likely to sell their own listings than others? If so, are there any hints as to why? If there are agents who do a disproportionate number of dual agency deals, should sellers seek them out or shy away? What are our percentages and how do they compare?
Hmmmmmm. Maybe some answers to these additional questions will even make it into a future post.
I think this practice can be very unethical. It doesn’t seem possible to fairly represent both sides of this real estate transaction. One side is trying to get the highest price and the other is trying to get as low a price as possible. And when there are issues that come up during an inspection, etc. it’s difficult to understand how one person could be working for both sides.
Unfortunately, we naively purchased our house this way and while we love our house, we regret that we did not have our own agent to counsel us on this purchase.
Thanks for the comment Sarah.
I honestly wish that dual agency would be disallowed as a practice in CT. It would make things cleaner and neater and get rid of at least one of the conflicts of interest in the business.
We’ve been in dual agency situations a handful of times. In each case we ask both parties if they are comfortable with it. Sometimes they are and sometimes they are not. People that are comfortable with it typically have done a few transactions in the past and are familiar with the negotiating and inspection process regarding buying a home.
When one or both clients are not comfortable with it we would assign one of the clients to another agent in our office. That has worked very well because each party then feels more comfortable sharing information with the agent helping them and asking questions that they have.
We had a dual agency experience once and it was a very negative experience – but we didn’t have any experience and the agent was an ass – in my opinion. Luckily the deal fell through – it was for a condo at The Linden. The property didn’t appraise, and it became apparent that the agent was 100% having the seller’s interests at heart. Luckily, it fell through. The thing is probably worth even less today than it was 5 years ago when it didn’t appraise anywhere near the “great price” the realtor was going on about. Being more experienced now I could probably manage it – but would generally counsel people to avoid it if at all possible.