High Quality Problems For an Agent to Have

[Note to Readers: The views expressed here are solely those of Ross Kaplan, and do not represent Edina Realty, Berkshire Hathaway, or any other entity referenced. If you need legal advice, please consult an attorney.]

Which of the following roles pose a potential conflict of interest for a Realtor? (at least according to this one):

A. Representing the same client as a Buyer in one deal, and as a Seller in another.
B. Representing both the Buyer and Seller in the same deal.
C. Representing potentially competing Buyers — that is, whose purchase criteria (price range, preferred neighborhood(s), etc.) overlap.
D. Representing competing Sellers.

Answer key:

A. No, perfectly fine — in fact, it’s done all the time.

Many agents (myself included) would argue that this is actually simpler and more convenient for the client, who doesn’t need to act as a liaison between two different agents, or otherwise coordinate their actions, key transaction dates (closing, Written Statement deadlines), etc.

B. Unh-unh.

At least according to this former attorney, such dual agency is the very definition of a conflict of interest.

While allowed in Minnesota with proper disclosure/authorization, ask yourself this: “how does an agent negotiate against themselves?”

Answer: they don’t.

Rather, they refrain from advocating for either side, and instead play a neutral, “Switzerland-like” role.

All of which begs the question, “exactly what are the clients paying the Realtor for??”

C. Tricky, but OK, with two caveats: 1) the Realtor treats all the clients the same — fairly, transparently, etc.; and 2) they don’t divulge one client’s info — for example, what they’re offering in multiple offers — to another.

Of course, “confidentiality” is a cornerstone of being a fiduciary, which Realtors already are.

D. Ditto. Same analysis as “C.”, except in their capacity as a listing agent (representing Sellers), “favoring” one client over another means marketing one home more aggressively than another.

As you might imagine, “C.” and “D.” are more of a problem for successful, veteran agents to navigate — especially ones who focus on a specific geographic area.

See also, “Perils of Dual Agency: Exhibit A”; “Awkward Dual Agent Moment #24“; and “Dual Agent vs. Double Agent“; and “Remind Buyer to Do Their Walk-Thru Inspection? Depends Who You’re Representing.”

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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