Bill seeks limits on whom realty agents represent

February 27, 1994|By John A. Morris | John A. Morris,Sun Staff Writer

State lawmakers are considering a bill that, for the first time, would limit a realty firm's ability to represent both a homebuyer and seller in the same transaction.

However, critics of the arrangement, known as dual agency, told the Senate Economic and Environmental Matters Committee last week that the bill does not go far enough to protect consumers. They suggested the committee prohibit dual agency.

TTC Typically, real estate agents represent the person who wants to sell a home, a fact that the General Assembly decided in 1989 must be disclosed to homebuyers.

Under dual agency, agents working for the same real estate firm represent the buyer and seller. It has become an issue as more and more homebuyers seek to hire a broker to represent them during the purchase of a home, and a growing number of firms, which traditionally have marketed homes, are offering their expertise as buyer representatives.

The bill, drafted by a Senate subcommittee that studied the issue, is an attempt to protect both sides from a conflict of interest.

But opponents of dual agency wondered Tuesday if a realty firm that has promised to get the best deal for both the buyer and the seller can fairly represent either one.

"If I represent both parties, how can I give you any advice at the expense of my other client?" said John F. Toner, a Columbia-based real estate broker. "You are essentially giving your agent permission to be disloyal to you."

"If this body was at all interested in consumers, you would do away with" dual agency, said Mike Morin, an agent in Anne Arundel County.

The president of the Maryland Association of Realtors disagreed and urged the panel to send the bill to the full Senate for approval.

"This should be a no-brainer," said Arthur E. Davis III, a Baltimore broker. "There is nothing inherently evil in this bill."

For the first time, Mr. Davis said, the bill will define the role of buyer representatives and dual agency, both relatively new to Maryland.

The bill would require a realty firm to alert both the buyer and the seller to the potential conflict. Both would have to agree in writing to the arrangement. If either does not want to proceed under those terms, they could hire an independent representative.

The bill also would require a realty firm to assign a different salesperson to represent each consumer. That agent would be prohibited from sharing his client's confidential information with his colleague.

The bill would prohibit a single agent from representing both sides in a transaction, a rule that some criticized as unfair to small firms.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.