Minnesota law requires that agents/brokers, "early in any relationship", disclose and discuss the different types of representation that are available to prospective home buyers and sellers.
Dual Agency is "when one broker or salesperson represents both parties to a transaction, or when two salespersons licensed to the same broker each represent a party to the transaction".
So what's the big deal with Dual Agency?
The challenge is that Dual Agency creates a neutral environment in which an agent/broker is prohibited from acting exclusively for either party in a transaction. The agent/broker owes the same duties to both parties, which can limit the level of representation to either party, and "dual agents may not advocate for one party to the detriment of the other".
For most home buyers/sellers, the main reason they hire an agent in the first place is to have their interests best represented. They count on the experience and knowledge of their agent to protect them in a transaction. Dual Agency would then seem to be an obstacle in achieving this end.
All is not lost however...
If the agent/broker follows two vital steps, Dual Agency can work reasonably well for most transactions: 1. Always, Always, Always disclose and discuss with both parties what their representation options are and how those choices can affect them in a transaction. 2. When Dual Agency becomes the route, have a separate agent/broker, within the brokerage, communicate and work on behalf of only one (either the buyer or seller) side of the sale. This helps create an equal, yet separate, barrier of protection for both parties.
As long as both parties are treated fairly and their interests are equally protected, we've found that Dual Agency transactions can work properly in following agency law, yet achieve good representation for both the buyers and sellers.
If you'd like to find out more about representation in Real Estate transactions, call me anytime.
Written by Glenn Necklen is Broker / Owner / REALTOR at Necklen & Oakland- Professional Real Estate services in Maple Grove, MN.