Dual agency disclosures fail homebuyers

A look at some of the worst-offending states

By Inman News Feed
Add Comment Add Comment | Comments: 0 | Posted Jul. 14, 2011

Share this Story:

The New Jersey disclosure statement, titled, "Real Estate Relationships," does state that "to work as a dual agent, a firm must first obtain the informed written consent of the buyer and the seller," but people who want to be dual agents minimize the effect of it, said Howard.

"I was in an online discussion and an agent commented that she explains the advantages of dual agency to her clients," Howard said. "My reply was, 'The state law requires that you tell what the disadvantages are.' "

The problem is a lack of proper disclosure, said John Sullivan, vice president of Buyer's Edge Co. Inc. in Silver Spring, Md. "If consumers were more aware of their choices, there wouldn't be a problem with dual agency, because no one in their right mind would do it."

Sullivan works in Virginia, Maryland and Washington, D.C.

"The D.C.-area disclosure is probably the worst in the nation," he said. "It says nothing more than the dual agent represents the buyer and seller. Virginia says much the same thing, with the addition that you might be entitled to other rights under the law, so here's a citation -- go look it up. Maryland's law is so confounded it actually permits an agent working for a brokerage to perform functions that a broker cannot perform."

As with other states, in Maryland and Washington, D.C., disclosures are to be made at the first scheduled meeting, which is always a problem. As the National Association of Realtors' studies in the first decade of this century show, only about 30-35 percent of homebuyers received disclosure information in the first meeting, and as many as 22 percent didn't received any disclosure at all.

Even before the recession, buyer representation lawsuits started to multiply significantly, according to a legal scan by NAR.

"State real estate associations lobbied for the passage of laws permitting dual agency," said Bruce Hahn, president of the American Homeowners Grassroots Alliance. "But, it was short-sighted on their part because of all the problems that have (arisen), bad publicity, and damage done to the profession's reputation."

Steve Bergsman is a freelance writer in Arizona and author of several books. His latest book, "After the Fall: Opportunities and Strategies for Real Estate Investing in the Coming Decade," has been ranked as a top-selling real estate investment book for the Amazon Kindle e-reader.

Contact Steve Bergsman:
Email Email Letter to the Editor Letter to the Editor

Prev| Page: 1 2
Add to favoritesAdd to Favorites PrintPrint Send to friendSend to Friend

COMMENTS

ADD COMMENT

Rate:
(HTML and URLs prohibited)