Agency- Dual or No Dual?

Ah, good 'ol Agency. I tell you, it is always a surefire topic to get a discussion going. I love it!

Recently I had an agent (and not just any agent-a designated broker of a local brokerage affiliated with larger national realty franchise, no less) suggest that “no agency could be ever be ‘implied’ AND then went on to assert that "if you're sitting an open house where a potential buyer enters and the buyer asks what the Days On Market 'DOM' are of the house, that to answer that question as the agent there, that a Dual Agency is the only relationship possible from that point on".

"Dual agency is the only relationship possible" and "it can never be implied"?

They were kidding, right?

Apparently not.

Absolutes are always dangerous; i.e. Always, Never, etc. In this case #1, the problem is "can never"...of course an agency could be created with a seller even if they don't list with you. Not likely, but possible. This person was incorrect if they left it as an absolute.

On the second part about answering the DOM question at an open house, I disagree that it in of itself would automatically create an agency with the buyer.

They were asserting that in today's residential resale environment when a buyer comes to an open house (or in some other type of circumstance where the buyer wants to purchase a property directly from the same firm that is the listing brokerage) that there would be an assumption that if that buyer makes an offer, there would be an implied agency to the buyer because this practice has become so common, resulting in that we just default to a dual agency, sort of a virtually "automatic" limited representation.

I hope we have not "evolved" to that point. If so, I might suggest that that is devolution, not evolution.

By the way, O.K.-yes it (dual agency) is usually referred to to as Limited Representation in today's more popular descriptive term. But for now, I'll use continue to use "dual agency" in this discussion...

The most common urban myth of agency is one we still hear from agents all the time; that being that if you as an agent sell your own listing (or another listing of a different salesperson with the same designated broker), that you ARE (Period. End of issue.) in a dual agency. But that simply is not the case.

As an agent you CAN, in many cases, sell your own listing to a buyer (customer) and still collect both sides of the commission...that last part is the REAL concern for most agents; i.e. "If we don't (or can't) do dual agency, we can't double dip the deal." Of course those that think that are myth-informed.

Now if a brokerage has a policy that requires limited representation in the open house scenario or one similar, then that is the rule for that agent and agency.

But it certainly is not the ONLY way.

There are so many otherwise very capable licensees who just don't "get" this and many other key points of agency. I recommend John Reilly's book on Agency...I still use things from that book--it concepts, examples and visuals--in my agency classes to this day. And Don Harlan's and Gail Lyons book "Buyer Agency Today: Keeping Your Competitive Edge in Real Estate", which is now in it's 4th Edition, is also an excellent and more recent treatise on the subject that I'd recommend to all of you.

I'll always remember Jim Sexton, the designated broker and owner of John Hall & Associates, saying that the more he thinks he understands Agency, the more he knows that he doesn't fully understand it. I find that pretty profound. Here is one of the brightest guys around and he (and I don't think with false modesty) says he still is at least sometimes confounded by it. Wow! Where would that put most of the rest of us?

In the interest of full disclosure, I must state here that I was a member of a now defunct alliance known as S.A.R.A.--the Single Agency Realty Association-- and I still have the personal bias that in most cases one should avoid dual agency at virtually all costs...but SARA no longer exists because there just were not enough realty licensees that felt strongly enough about single agency to keep the movement going.

At the same time, I have softened a bit in my old age on my stance against dual agency and feel I can now at least better sympathize with those who like dual agency's potentially better qualities.

However, I still am of the belief that when ever humanly possible, that when the practitioner has a choice between doing a single or a dual-CHOOSE SINGLE! I see this as good risk reduction technique for the fact most attorneys dealing with real estate matters say that there is a disproportionate amount of their litigation that involves dual agency transactions.

So what do you think? Do dual...or no?