W
hen you are looking to sell your home, you hire an agent to market the property to potential buyers. More and more often, successful marketing draws a buyer who wishes to be represented by one and the same agent. This results in a “multiple representation” situation where the agent must act in the best interests of both the buyer and the seller.
It’s important that both the buyer and seller understand the brokerage’s duties and responsibilities and consent to this multiple representation in writing.
There are pros and cons to this type of representation and both parties must consider all aspects. All agents provide a fiduciary duty to their clients, which means that they must act in the best interests of every client.
In the case of multiple representation, that translates into the agent crafting the clauses in the offer so that the best legal interests of all parties are taken care of. There should be full understanding of what is expected from both buyers and sellers and the timelines to be fulfilled. One agent means timelines are not held up waiting for another agent to fulfill conditions. Also, when an agent works with both the seller and the buyer, the agent has hands on information about the buyer’s finances and the results of any inspections that are a condition of the sale.
When a buyer has their own representation, their agent has a limited responsibility to reveal information about that buyer.
Unless permission is given by the buyer and/or seller in writing, an agent in multiple representation cannot disclose how much a buyer is willing to pay for a property. Nor can they disclose how much a seller is willing to accept. If either party is desperate to make the sale, that can’t be disclosed either.
But, the agent must provide the seller and the buyer with comparable recent sales to allow both parties to come to their own conclusions regarding the property’s fair market value.
If there is a problem with the house, the multiple representation agent must disclose that to the buyer. Or, if the Buyer has a deficiency, bad credit for instance, that also must be disclosed to the seller.
Often, there is a financial advantage to the seller when there is only one agent involved. That may mean a saving for the buyer as the seller’s net from the proceeds of the sale is higher.
In summary, in multiple representation, nothing can be hidden from either the buyer or the seller. It is the agent’s duty to disclose all pertinent facts to the seller and buyer, to protect the legal interests of both but to let the buyer and seller negotiate the price with the agent acting as a resource and a professional mediator.
