What is Dual Representation?
If you’re involved in any leasing/purchasing real estate process it’s likely you’ve come across the term “dual representation” and it’s basically this: dual agency representation happens when the same broker or firm represents both the tenant and landlord in the same transaction. It’s common to find this happening when big firms are involved in the process. What might seem like an ideal solution at the time can cause problems during the transaction because it’s not possible to represent both parties fairly in dual representation real estate transactions. There are too many conflicts of interest between the tenant and the landlord, and in the end, it gives an unfair advantage to the brokers/firms as it has a major effect on the sales price. For instance, depending on the timing of the transaction, having an agent represent both the buyer and the seller can either raise or reduce the final selling price of a transaction. It should also be mentioned that the agent typically makes far more money representing the landlord than they do the tenant.
Rather than negotiating a deal that’s good for the broker, an agent should always negotiate a good deal for their client. This is why howardcommercial represent tenants only as opposed to firms that do both as this prevents any potential conflict of interest and helps to ensure the client’s best interests are being served.
When you find yourself entering into a leasing or purchasing transaction, every potential tenant should hire a broker/firm that doesn’t have any conflict of interest with a landlord/leasing agent. Every real estate transaction is different. Always clarify your relationship with your agent. If you suspect dual representation is occurring, speak up. Don’t be afraid to ask for a listing agreement or an exclusive buyer agency agreement. Both are great ways to help ensure you’re being represented, fairly. Consider engaging howardcommercial, who only has tenants interests in mind. We will save you time and money.
Dual representation is illegal in many states and while a few states still allow dual representation, most of them have passed laws that require both brokers and agents to disclose this information. These laws are a great step to help continue to protect buyers and tenants.