There are some important real estate terms to know when buying or selling real estate. The one I feel is skimmed over far too lightly by many real estate agents in Illinois is DUAL AGENCY. No it’s not a swear word but it is extremely important.
Real Estate Terms To Know – Agency
Agency is the law that governs the relationship between real estate agents and clients in the transactions of real estate.
What is Dual Agency
The selling of real estate where the agent acts on behalf of the seller and the buyer. Think of it this way, one house, one buyer, one seller, one agent. Dual agency in Illinois is legal but is it right? In my mind no it isn’t. Perhaps it’s because I think about my clients more than I think about the sale. Perhaps it’s because I would not agree with it if I were a buyer or seller. Perhaps I just understand it better than you.
I never have an issue explaining in depth the lack of benefits when it comes to dual agency and once I do, my clients never say yes. I always advise them that I don’t practice dual agency anyway but it is interesting that the reaction is always the same. What buyers and sellers need to know is what a Dual Agent cannot disclose or do for either party as part of the real estate transaction.
- Confidential information the licensee may know about a client, without the clients permission.
- The price or terms the seller or landlord will accept, with the permission of the seller or landlord, except the asking price.
- The price or terms the buyer or tenant is willing to pay without their permission.
- A recommended or suggested price or terms the buyer or tenant should offer.
- A recommended or suggested price or terms the seller or landlord should accept or counter with.
This extract is from one of our contracts. It states:
Representing more than one party to a transaction presents a conflict of interest since both clients may rely on the licensees advice, and the clients respective interests may be adverse to each other.
It’s also important to know that Illinois laws of agency can be a lot different to other states. If you read articles online like this one it might confuse you and you may think I am wrong. I am not, I am talking about agency in Illinois. Always contact a real estate professional to find out how agency works in that state.
Both buyer and seller must formally agree to Dual Agency but your real estate agent must want to practice it too. I don’t. I really believe it’s a conflict of interest no matter which why I slice it. I do explain it to my seller clients so they also understand it does not prevent me from marketing their homes and even find a buyer. If that happens I simply refer the buyers to an agent who will work for the buyer.
It isn’t about a winner and a loser, one getting a better deal than the other. After all we want a buyer and seller to come together on terms for a successful property ownership transfer. It is about making sure you get represented in the best possible way.
Remember: With Dual Agency you get ZERO help with the offer price, offer pricing strategy, or counter offers. Considering that’s one of the top things buyers especially need help with, seems like a no brainer to me to not call the listing agents but call your buyers agent.
If you are buying on Barrington Illinois and need the services of a buyers agent, give us a call. 847.363.3686.
Is th function of a duel agent the same in a rental when the agent has represented the owner in the sale of the house who decides to rent it but will continue to try to sell the house during those six months? Hope I am being clear! Thank You