By Dennis Wilson, Manager, Professional Standards
I’d like to start this column by talking about a scenario that was brought to my attention, which to me, is a potential land mine.
A REALTOR® lists a property on a Wednesday and tells potential buyers’ agents that no offers will be presented until Sunday. In the meantime, one of his own clients hears about the listing and wants to make an offer. The Realtor signs a limited dual agency agreement with both parties and proceeds to write the offer. The seller loves the offer and decides to accept it. Everyone is happy… or are they?
There are a number of potential issues with the scenario but for this column, I’ll focus on one – the limited dual agency agreement. We all know that in limited dual agency, you’re restricted in your agency duties; you’re not allowed to disclose your clients’ acceptable price, motivation for buying/selling or their personal information. That of course goes for both the seller and the buyer.
However, the one thing that most Realtors seem to miss is that as a designated agent under limited dual agency, you have made a commitment to both clients to deal with them impartially. Now that you have taken an agency relationship with both the seller and buyer, you can’t have any discussions with either party that would put the other party at a disadvantage.
So what if you feel it may be better for your original client (the seller) to not deal with this offer at this time because it may be more to their advantage to wait for multiple offers on Sunday? Do you tell them? Now that you’re in limited dual agency, you would be putting your buyer client at a disadvantage. The problem is you’ve now put yourself in a situation where you can no longer provide the full agency services that both your buyer and your seller were expecting.
Limited dual agency arrangements are intended for times when you have existing agency relationships with both the buyer and seller, putting yourself at a conflict of interest. I would remind you to think very carefully before entering into such an agreement and to be sure that both parties thoroughly understand what they are to expect from you and what they aren’t.
Obviously in this hot real estate market, which is showing few signs of slowing down, we’re dealing with situations that neither we nor our clients may have encountered before. As a result, I think it’s important that we have an opportunity to discuss what we can do and what we can’t do, and what other Realtors ought to be doing to ensure that clients have every opportunity to accomplish their goals.
To assist in this, we’ve established a special, free session open to all members, where I will discuss do’s and don’ts. We’ll have an open discussion on what you’re finding is going on, how it can be dealt with, and what some appropriate strategies might be to compete in this crazy time.
Here’s a list of the free, all-member office presentations on, The Good, Bad and the Ugly: What REALTORS® Need to Know to Navigate Today’s Market, as requested by brokers and members.
- Wednesday, March 2 | 9:30 am to 11 am | FVREB | FULLY BOOKED
- Tuesday, March 15 | 9:30 am to 11 am | The Ramada Inn, 36035 N Parallel Road, Abbotsford
- Wednesday, March 16 | 9:30 am to 11 am | Coast Hotel & Convention Centre, 20393 Fraser Highway, Langley
Please let your office know which meeting you can attend. Office totals should be emailed to darcie@fvreb.bc.ca by no later than three business days prior to each presentation.
I look forward to seeing you there.