Should a real estate company be allowed to represent both buyer and seller in a single transaction?
It appears to be a conflict-of-interest: a broker giving his allegiance to both parties in a home sale. Some opponents of the practice liken it to a law firm representing both sides in a trial.
But such arrangements -- known as "dual agency" -- exist, and the attorney general says they're OK. A bill before the General Assembly would explicitly permit companies to act as "dual agents" under certain conditions.
Larger brokerages, lawmakers and realty groups say that, unlike defendants and plaintiffs, buyers and sellers are less adversaries than partners in a business deal. Real estate agents are less advocates than mediators or "facilitators" in that deal, they say.
The bill before the Senate -- No. 404 -- allows dual agency and sets guidelines for brokers who engage in it. Proponents say the bill would help to teach buyers and sellers their rights, promote the use of buyers' brokers and ensure that dual agents act properly.
"It's a tremendous step in the right direction," says Arthur Davis III, president of the Maryland Association of Realtors. The bill is the group's top legislative priority this year.
Though the MAR and some large firms say the bill will benefit consumers, they admit that it also will help them. Big realty firms, with lots of listings, don't want to be precluded from selling these listings to people who work with buyers' agents within their own companies, Mr. Davis said.
A quick primer on the real estate business:
Every real estate company is run by a broker, who hires agents to work with buyers and sellers. Agents have two main jobs -- to find sellers who will list their properties with the company, and find buyers for the company's listings or for other companies' listings.
Under the traditional system in Maryland, agents who find buyers and work closely with them are, nonetheless, legally bound to serve the interests of the seller. If they learn, for 'N example, that buyers are willing to pay more for a house, the agents must reveal this to the sellers.
Many buyers were unaware of this, so the state in 1989 started to require agents who work with buyers to disclose in writing that their loyalty is with the seller.
