Dual agency

Undisclosed dual agency is illegal and, as such, agents who knowingly practice undisclosed dual agency could:

1. lose their license 2. lose their commission 3. have legal action taken against them

What are the forms of dual agency?

1. on agent, two principals 2. two agents, two principals

Disclosure is super important when it comes to dual agency. But, for those agents who do practice dual agency, there are some things that shouldn't be disclosed to the compromised party. A dual agent should NOT disclose to a party:

1. the other party's willingness to pay more or take less for a property 2. the other party's motivations to buy or sell a property 3. the other party's willingness to accept different terms than appear in the offer 4. the financial condition of the other party

Agent Alfie represents Seller Jerome, who is selling his vacation home. Alfie also represents Buyer Bo. Bo comes to Alfie wanting to buy an apartment but ends up being interested in Jerome's property, instead. What agency shifts are happening here? What risks are involved? What action should Alfie take?

Alfie's agency relationship is changing to dual agency because Alfie represents both parties to a pending transaction. This poses a lot of conflicts because Jerome's interests and Bo's interests are opposed. Alfie can't give both Jerome and Bo the same fiduciary duties a single agent could. Alfie needs to check with his brokerage to make sure he can actually practice dual agency so he doesn't get himself into trouble. He also needs to obtain informed consent to dual agency from both clients before proceeding with the transaction.

Although Agent Sally brought both the buyer and the seller to the brokerage, Broker Jenny assigned Sally as a designated agent for the seller and assigned a different agent to the buyer. What is the most likely explanation for Jenny's actions?

Broker Jenny likely chose to establish designated sales agents to give both clients at least some degree of individual representation in the in-house real estate transaction.

T/F - in Georiga, designated agency is considered dual agency

F - in some states it is, but in Georgia, IT IS NOT

T/F - In some states, including Georgia, dual agency is illegal.

F - while it is true that in some states, dual agency is illegal. It is legal in Georiga.

T/F - As long as there is informed consent from BOTH parties, dual agents are allowed to represent both of those parties

T

T/F - Both parties need to (and are legally required to) consent to dual agency in writing for it to be legal.

T

T/F - When a brokerage commits to practicing designated agency, they are saying that a client will have an exclusive agency relationship with only the named individuals in the agency agreement and no one else in the brokerage.

T

Why does the fact that a seller wants the highest sale price possible while the buyer wants the lowest sale price possible create a potential issue in dual agency?

That a seller wants the highest sale price possible while the buyer wants the lowest sale price possible is an example of conflicting interests that can exist between two parties in a dual agency transaction. This can make it difficult, if not impossible, to serve the best interests of both.

Darius is a buyer's agent helping Chantel purchase a new home. Darius and Chantel look at various listings all across the city. Chantel likes two listings Darius shows her, but she ends up wanting to purchase a house listed through Darius' brokerage. Would this be considered dual agency?

Though the listing is being handled by a different listing agent, this would still be an example of dual agency (remember, all license holders are connected to their sponsoring broker!)

An agent involved in an in-house transaction is called....

a dual agent

An agent may obtain advance informed consent in writing to operate as a dual agent during their first substantive contact with a client, even if that agent plans to operate as a single agent. This is often called _________

advance consent to dual agency

Why is consent so important with dual agency?

because client representation is compromised, specifically regarding fiduciary duties of full disclosure & undivided loyalty. When both parties to the transaction are being represented by a single broker, that broker can't possibly promise to pursue the best interests of both parties at the same time

an agency arrangement wherein both parties to the transaction are represented by their own agent, but both are employed by the same brokerage

designated agency

a license holder (appointed by their broker) who represents the interest of one of the two parties in an in-house real estate transaction

designated sales agent

In Georgia, dual agency is sometimes called....

divided agency

In other scenarios, one agent might represent a buyer, while a second agent represents a seller. But if both agents are sponsored by the same broker, then the principals are technically working with the same broker. That makes it an in-house transaction and an example of

dual agency

In some cases of dual agency, one agent might represent both principals involved in a transaction. This is the simplest form of ____

dual agency

an agency relationship wherein both the buyer and the seller are represented by the same broker in an in-house real eatate transaction

dual agency

This can occur when the words or actions of a license holder make a customer mistakenly feel that they (the license holder) are looking out for that customer's best interests. But in reality, the license holder is actually representing another party

implied dual agency

Why is the practice of undisclosed agency bad/illegal?

it is a violation of fiduciary duties to both parties in the transaciton

If a client is a party to a dual agency relationship, what must happen?

the client must consent (in writing) to do so (take part in the dual agency relationship)

the term for when both parties to a real estate transaction are unknowingly represented by the same broker.

undisclosed dual agency