On 4 Apr 2006 06:22:32 -0700, wrote:

I have a friend who is shopping for a house in Calif. and has found one
that she and her husband like a lot. They'd like to make a bid and try
to purchase it. Yet they've also learned that their real estate agent
also represents the person selling the house. What should they do in
this situation?

I used to be a commercial real estate agent in California. Here's
what I can tell you:

Dual agency is very common.

Dual agency must be disclosed by law
(http://www.dre.ca.gov/disclosures.htm#_Toc122939772)

Here's what Nolo--a provider of legal information, forms, and
solutions for do-it-yourselfers--says about dual agency:

"One of the best reasons to hire a real estate agent, however, is that
the sellers are likely to use their own agent -- and you want to keep
that agent from taking over the process. In fact, the seller’s agent
may pressure you to let him or her represent both of you, in a “dual
agency” relationship that primarily benefits the seller. (The less
scrupulous sellers’ agents don’t make it clear that they’re working
for both people -- but if only one agent is involved in your
transaction, it’s fair to assume that the agent’s loyalties are with
the seller.) It’s better to have your own agent than settle for dual
agency."

Notice this phrase: "In representing both Seller and Buyer, the agent
may not, without the express permission to the respective party,
disclose to the other party that the Seller will accept a price less
than the listing price or that the buyer will pay a price greater than
the price offered."

Ok, so ... since they're not supposed to do that ... it never happens,
right? Hmmm.

My final word on dual agency is this: it CAN work, but the agent is
technically (arguably) acting as a "sub-agent" of the seller's agent.
After all, the commission IS being paid by the seller, right?

Also, when the agent is paid based on a commission, then the more you
pay for the house, the more they make. It's that simple. An
*entirely* honest, ethical agent will put that fact aside in trying to
represent your best interests.

Is that the kind of agent you have here?

Trying to insert a "buyer's agent" at this point might really stir the
pot. If it's a house your friend wants, and if your friend has no
reason to doubt the ethics and character of the agent, then he/she
should probably move forward as is, BUT they should be VERY aware that
they no longer have somebody looking out SOLELY for their interests,
so they need to guard their own position a bit more jealously.

Good luck!