I often hear agents talk about how they are representing both the buyer and the seller in a transaction. This concept is called single-agent Dual Agency and it is legal in the state of Connecticut. I do not agree with this practice and believe that it is not in the best interest of either the buyer or the seller to work with the same agent during a transaction.
When you have a Real Estate agent represent you in a transaction, they are compensated to represent you and look after your best interests. If that same agent is also representing your counterpart, then they also have the responsibilty to do what is in the best interest of that person. Since it’s impossible to serve two masters, the end result may be that the agent is just trying to get the deal done as quickly and easily as possible, for them.
Consider this example: The seller is working with Agent Pat and tells Pat that the least they will accept for their house is $250,000. The house is currently listed at $265,000. Buyers come to an open house and decide that they like the house and want to put in an offer. They are not working with an agent at the time. Agent Pat offers to represent them and the buyers and sellers agree that this would be fine. The buyers tell Pat that they are qualified to spend $260,000. The buyers also tell Pat that they feel the house is overpriced compared to other comparable houses they have seen. They would like to initially offer $240,000 and will not go over $245,000 through the negotiations.
Now, what is Pat to do? Pat has a buyer willing to bring an offer for the house, but Pat knows that the buyer and seller are $5,000 apart from the most that will be paid and the least that will be accepted. What Pat should do is have the buyer submit their offer and present it to the seller. They will most likely negotiate back and forth to their upper and lower limits and then realize that there is no overlap.
However, $5,000 isn’t really that big of a gap to bridge, so Pat may try to get the buyer to extend their maximum offer price, or get the seller to lower their minimum selling price. It’s really tempting for an agent to “get the deal done” particularly if they have influence over both of the parties and know the size of the gap. If the agent feels the gap is surmountable, it’s tempting to convince one of the parties that they should offer more or accept less.
If you have your own buyer’s agent, this is less likely to happen. You tell your agent your maximum offer price. They present your offers to the seller’s agent, who then presents to the seller. You negotiate back and forth until neither party wants to go higher or lower. Your agent says this is the highest you will go. The seller’s agent says this is the lowest the sellers will go. You will walk away because you don’t want to offer more and your agent will not put undue pressure on you to buy this house. It is their job to help you find another house that works.
If you want to protect your best interests in a real estate transaction, it is always prudent to have your own independent representation. Think about how attorneys work, they never represent both the plaintiff and defendent in a case. It’s impossible to be impartial.