Dual Agency, Practical or
Impractical
|
||||
|
Let's break it down. The assumption is that most people are aware that a real estate broker or salesperson ("Broker") is an agent with fiduciary duties to the party that the Broker represents. The reality and the problem is that most people do not know this. Now... most real estate agents should know this but unfortunately, many do not. You see, an "agency relationship" is most often created by express agreement, I.E. a listing agreement and/or a buyer broker agreement. Normally, both documents clearly outline the fiduciary relationship and duties of the real estate agent. However, an agency relationship can be legally implied by the parties' "agent's" actions. Regardless of whether the agency relationship is express or implied, the agency relationship imposes on a Broker the fiduciary duties of loyalty, obedience, disclosure, confidentiality, and accounting.
In King County, Washington State, in
Busk v. Hoard, 396 P.2d 171 (1964 Wash. 1964).
, the King County Supreme Court held that: "...The concept of agency
is one of law. Its existence depends upon factual elements that enable a
determination, as to whether an agency relationship existed, to be made from
all the peculiar circumstances of the particular case. No one fact, seized
from its setting, should be regarded as conclusive or controlling under any
and all circumstances..."
• Standard of Practice 11-2
Here Fiduciary is defined as: Ok, so why is this important? Because Article 26 sets the foundation for how real estate agents engage the public. We have an inherent duty to understand our craft. If we engage a consumer in a transaction, we have an obligation to lay out all of the nuances of the transaction, all of the nuances and peculiarities of each document that becomes an integrated part of the transaction. Our duty is not only to help negotiate the transaction, but more importantly, our duty is to help the consumer fully understand their duties to the transaction. Too many folks, real estate agents and the public, place way too much emphasis on the negotiations of a transaction rather than the complexities of the transaction. Any monkey on a chain can fill in a contract form, it's not rocket science. And, while we, as an industry are heralded as learned negotiators, we are all too often dismissed for our knowledge of the intricacies of keeping a transaction together. It is this Realtor's opinion that we are not paid the big bucks for our slight of tongue or negotiating strategy; we are, or should be, paid the big bucks for making sure that the transaction makes it to the finish line. We are entrusted with an overwhelming responsibility to fully understand and explain the meaning of the contract, the meaning of each form to the contract, the ins-and-outs of surveys, disclosure of waste water treatment requirements, the ability to dissect the potential pot-holes in a transaction and how to navigate around or through them and to explain the particular responsibility of each party to the transaction. We have an obligation to the parties to help them complete the transaction with as little inconvenience as possible. The particulars of who "gets the best deal", buyer or seller, is an arguable point if the transaction never closes! In no way is Dual Agency an obstacle to these duties! Just because one party or the other loses the edge of gaining an advantage of 'covert knowledge gained' about the other side, has little bearing on the real estate agent's responsibility to deal fairly and honestly with both the buyer and seller in a Dual Agency transaction or any transaction! Article 26 of the Arizona Constitution places Arizona Real Estate Professionals on a playing field that is far more different than any real estate agent in any other part of the United States. Moreover an excerpt from the AAR-On-Line publication March 2006 written by Michelle Lind, General Council to the Arizona Association of Realtors read:
So, where does this all lead with respect to Dual Agency? In this Realtor's opinion, simply stated, as an industry we have an obligation to be fair and honest with the public, the consumers of our services. We have a duty to be honest and upfront about how Agency Relationship works and what it means. There are numerous instances of case law, in Arizona and around the US that tell of tales of dubious dealings by agents, knowingly and unknowingly, mismanaging the public's expectations of these relationships. This is not a bi-product of Dual Agency, this is a bi-product of inexperience and incompetence by real estate practitioners who do not take the necessary steps to fully explain the fine distinction between advocacy and fiduciary VS fair and honest dealings with the public. If we, as an industry, take a more responsible roll in explaining Dual Agency Representation VS Single Agency Representation, we will find that there will be many fewer complaints filed with the Arizona Department of Real Estate over this subject. Yes, there are advantages for a buyer or seller to be represented by an exclusive agency relationship. For example, the ability to take advantage of misguided disclosure of the motivations by one side or the other can be valuable during the initial negotiations and throughout the transaction. But... if the buyer or seller has been properly schooled by his/her real estate agent, there is little chance of either side ever coming across such, foolishly disclosed, information. Lori Klindera and "G-II" Varrato II are Realtors with Coldwell Banker Residential Brokerage, 3050 W. Agua Fria Freeway, Suite 110, Phoenix, AZ. 85027. We can be reached at cell phones 602-574-5674 for Lori, 602-796-5674 for G-II or by eMail at any number of eMail addresses, such as Lori.and.G-II@RealEstateInPhoenix.net or Lori.G-II@AirForceHomeSeller.com. Bye till next time. Lori and I truly wish you and your family a Happy, Healthy, Safe, and Prosperous 2007! |
This article was solicited from us by the Law firm of Michael A. Fleishman, Butler & Associates, P.L.C. and used in the the Lorman Education Systems continuing legal education seminar - "Real Estate Litigation in Arizona" - 9/14/07 - We were very honored!
Go to
AirForceHomeBuyer.info |
|||
This article has been written by "G-II". All rights reserved