Must a realtor disclose a dual agency relationship?
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Must a realtor disclose a dual agency relationship?
I have made an offer on a bank owned property and my offer was not accepted; I was represented by my Realtor. Later as I wanted to find out how much more some else paid for the property it turned out that the listing agent also represented the competing buyer, and therefore knew the amount that I offered. His buyer paid only a little more than my offer. This was a multifamily unit and my potential loss can be estimated in over $100,000 over time. Shouldn’t the seller’s agent have disclosed that he was in a dual agency situation? What are the ethical/fiduciary obligations? How to avoid this in the future?
Asked on December 1, 2010 under Real Estate Law, Arizona
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
I think that you may have used the term "dual agency" in the wrong context here. A realtor is a dual agent when he or she represents the interest of both the buyer and the seller of a property. That is where the potential conflict can come in and yes in that situation there must be full disclosure in some states and there even must be written and signed disclosures as to who the agent "really" represents. Here there was also a conflict of sorts but as between buyers. So you have to look at it from a different perspective: did the realtor advise you that there was an offer that was made that was higher than the offer you made? Were you given the opportunity to give a counter bid? The realtor could not have schemed against the other buyer nor against you. They could only give you both a fair shake. In the future ask for disclosure as to how many people are bidding and if he or she represents more than one. Then you will know.
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