My Realtor is Acting as a Dual Agent – What Does That Mean and Why Should I Care?

If you are in the hunt for a house, or likewise selling your own, the topic of dual agency will (or should) come up for discussion with your agent.  Most people give consent for their agent to act as a dual agent if the opportunity arises, but do you really know what that consent means?

Under New Jersey law a disclosed dual agent works for both the Buyer and Seller. To work as a dual agent, a brokerage firm must first obtain the informed written consent of their client. It is not necessary that the agent representing both Buyer and Seller be the same person, rather dual agency runs to the brokerage firm. This means if your agent is with one of the handful of large brokerage firms in the area, it is more likely that your transaction will be one in which dual agency applies.

The agent affiliated with a brokerage working as a disclosed dual agent must carefully explain to each party that, in addition to working as their agent, the brokerage firm will also work as the agent for the other party. The agent must also explain what effect working as a disclosed dual agent will have on the fiduciary duties their brokerage firm owes to both the Buyer and Seller.

Dual agency gets tricky in a transaction when the agent is aware of confidential information that would benefit one party and negatively impact the other. A brokerage firm must have the express written permission prior to disclosing confidential information of one client, to the other.

Examples of confidential information includes the highest price a Buyer can afford to pay and the lowest price a Seller will accept. It also includes either party’s motivation to buy or sell. Remember, a brokerage firm acting as a disclosed dual agent will not be able to place one party’s interests ahead of those of the other party and cannot advise or counsel either party on how to gain an advantage at the expense of the other party because of such confidential information.

So why should you care? Well, it’s not likely you’ll be able to avoid a dual agency relationship, and you should not necessarily try to do so. If your agent is a dual agent, it means perhaps it was internal advertising that brought a Buyer to you for your home; but, it does mean you should strongly consider being represented by an attorney in a dual agency transaction. It is the only way to ensure you have an advocate protecting your interests up to and at the time of settlement.

Questions? Feel free to give us a call.

Reason #6457 Why Your Residential Closing Needs a Lawyer at the Table



Lawyers have war stories.  Stories about deals gone wrong and documents drawn up on a napkin, but missing an essential element.  Most of those stories originate with someone who decides to forgo legal advice (because it’s too expensive) then it costs them a TON of money to right the wrong. Sometimes money cannot fix the wrong, like this war story:

Sellers have lived in their house, in a very desirable town, for about 7 years.  They purchased at the height of the market and when the kids finished with the fantastic school system they decided it was time to downsize. To get ready for a sale, the property was spruced up, delayed routine maintenance addressed and the house made generally ready for the next family.

Typical, right?

Not so fast.

The property hit the market and a potential Buyer expressed interest early on but, with some simple questions.  The property has a driveway providing access to a neighbor’s house and the Buyer enquired as to the exact nature of this apparent easement.  A single, elderly woman did not want to be responsible for snow blowing, maintenance and taxes for anything more than necessary. Incredibly the Seller did not know the answer.

Obviously the potential Buyer needed more information to even assess interest in the property.  So the agent pulled a title search and after much research, including hiring a lawyer, the legal interests were determined.  The Seller learned (for the first time) the easement is permanent, that the tax burden for the property is theirs and responsibility for maintenance their neighbors.

Not a bad outcome, right?

Wrong. By the time it was sorted out, the potential buyer was long gone.  So was the Seller’s appetite for continuing on in the sales process.  Sellers have instead decided to stay on in the town with the great school system (no kids left in the schools) and pay the notoriously high taxes.

What does this mean to you? Well, the Seller was unaware there was an easement that ran with their property, and had no idea who was legally responsible for the upkeep.  Their first inclination when the Buyer asked these questions was to sue their form Realtor if the outcome was not satisfactory.

But what would they sue for?

The standard Realtors’ form agreement of sale, on the very first page says THIS IS A LEGAL CONTRACT. GET A LAWYER. However, most Buyers or Sellers don’t because who wants to spend another few hundred dollars unnecessarily.

Well, if the Sellers fully understood the easement at the time of purchase, perhaps they would have paid less, or during their 7 year tenure at the property, worked out a deal with the neighbor to purchase the strip, relieving them of the tax burden.  Or maybe they would have done nothing differently at all.  In any event any decision would have been an informed decision with the assistance of a lawyer next to them at the time of closing.

Interestingly the Sellers’ initial reaction was to sue their former Realtor.  Okay, but what exactly did that Realtor do wrong?

The first page of their contract of sale says THIS IS A LEGAL CONTRACT. GET A LAWYER. The Realtor’s job is to shepherd their Seller through the process.  It is not their job to interpret the language of contracts, review and offer opinions on surveys or explain title commitments and more importantly exemptions from title policies.  The answer is, the Realtor did their job and did nothing wrong.  The Sellers assumed the responsibility for accepting and understanding the transaction without the aid of legal counsel.

So do yourself a favor in your next real estate purchase or sale – get a lawyer.  Lawyers are not involved in the sales process to slow things down or impede the process, but rather to help you make appropriate and informed decisions throughout the process.

So what happened with the Seller and the easement?  Nothing.  They had been provided with a survey disclosing the easement at the time of closing, the easement was excepted from coverage in the title policy and they have paid taxes (and will continue to do so) on property with a restricted use.  Had they hired a lawyer to guide them through the process, maybe the only difference would be that they fully understood what they owned and the restrictions attached to their new home.

When you make what is likely the biggest purchase in your life, isn’t a few hundred dollars’ a price worth paying to understand every aspect of that purchase?  If you are buying or selling real estate in Pennsylvania or New Jersey, call Bergmann & Good.  We’ll guide you through the process.