Boston Condos for Sale and Apartments for Rent
Boston condo agent and ‘Dual Agency’
One debate I often hear is whether a Boston real estate agent should represent both sides of a transaction. The question lies on whom you represent. I have been in real estate for 20 plus years and have done numerous transactions where I represented both sides. I have guidelines that I personally use when deciding whether or not I would feel comfortable in doing so. Here are the things I consider:
There is the danger of dual agency in a Boston condo transaction.
What happens when one agent works with both the buyer and the seller in a Boston condo sale, and what that means is that the agent becomes a facilitator and can not advocate for either party or do anything to the detriment of either party. Most homeowners and Boston condo buyers would rather have an agent advocating for them and negotiating fiercely on their behalf.
The other downside is the danger of violating fair housing rules.
If a home is being marketed to one group of real estate agents through agent networking that makes it available to a limited number of buyers and those buyers. Other eligible and interested Boston condo buyers may not get the opportunity to buy the condominium or even know that it is coming up for sale. Home sellers benefit when their home is marketed to a larger pool of buyers.
We have had clients who asked us to look for those special secret deals. I get it but most of the time it doesn’t work that way. The internet has made the home selling and buying process a lot less secret which is a good thing for people who don’t know the right people but who still want to buy or sell real estate.
The MLS is agent networking at its best.
Using the same agent. “Dual Agency”
I have been in real estate for 20 plus years and have done numerous transactions where I represented both sides. I have guidelines that I personally use when deciding whether or not I would feel comfortable in doing so. Here are the things I consider:
1) Is it a win-win situation for both parties? In other words, is the seller getting what they wanted or maybe a little bit more? Is the buyer happy with the price and it is reasonable?
2) Did the listing stay on the market long enough to give the sellers an indication of demand, or lack of?
3) Are there good comps that support the price that the buyer is paying? If not, and I am selling for a record price in the building, I would not touch dual agency with a 10-foot pole! This is where it gets very tricky. If I am a listing agent, and I am selling for a record price, and there are no comps that justify my pricing…I just hit a grand slam for my selling clients! If the buyer’s agent allowed their client to pay that amount, well let’s just say I don’t want to be THAT agent! Especially as a dual agent! NEVER! Now I will say there have been times where I represented clients that had so much money they just did not care about the price, they just wanted the condo. In that situation, you make sure that you document that conversation.
Regarding #3, this is where representation comes into play. As a dual agent whom do you represent? You should be representing buyer and seller equally. But how is this possible when you have a situation like above? If you are getting a record price for your sellers, and there are NO COMPS to support the price, how can you be the buyer’s agent and say “I did a good job for my clients”? The answer: You can’t!
If this same agent acted only as the buyer’s agent, you can bet that he would be hammering on the seller’s agent that the unit is at a record price and might be overpriced? Now, records are meant to be broken. So how much of a record price is it? Is it $10 to $30 a square foot more? That is reasonable. Is it $50 to $100 a sq. foot more? This is when you have real problems. For one, the property would most likely not appraise. But what if the buyer is paying cash and an appraisal is not required? Well then the buyer is really at risk. This is when they REALLY should have a separate agent. ( and for peace of mind, the cash buyer might still consider getting the property appraised).
In multiple-offer situations, if an agent is representing both sides, he or she better make sure that their buyer’s client is the best offer! If it is, the listing agent and the seller are making the final decision as to which offer to select. In this situation, there is no problems in representing both.
So bottom line: If both parties are happy and well educated on pricing, and there are good comps to support the purchase and sale, there are no problems.
On the flip side. If there is a big difference in price from the comps, especially if it is a record price in the building for the seller or huge discount for a buyer. This is when you need two agents fighting it out for their client’s best interest. I would never do dual agency in this situation.