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Blog post image for Sidestep the Dual Agency Minefield

Sidestep the Dual Agency Minefield


In the practice of dual agency, it is nearly impossible for buyers to receive exclusive representation from an agent or brokerage that also represents the interests of the seller. You’re dodging all kinds of risks because your interests are not fully protected in these double-ended deals. Key information can be omitted or not fully explained, whether it is inadvertent or by virtue of their divided role to protect both sides. This can result in a critical misstep – and tremendous vulnerability – with grave consequences for those searching for luxury property.

We’re not saying these things because we’re buyer’s agents representing buyers of luxury homes exclusively. This conflict of interest is the subject of numerous courtroom litigations. Take the very public case of a Horiike vs. Coldwell Banker Residential Brokerage Company and the recent California Supreme Court decision that ruled in favor of the plaintiff’s suit involving full disclosure of a luxury estate’s square footage. Horiike’s suit alleged several things including that the defendants had breached their fiduciary duties by misrepresenting the square footage or failing to determine the accuracy of the representations they were making or failing to act with the highest levels of care and honesty.

Failure to communicate all information known about the square footage was among the reasons for the decision. This decision affirmed an appeals court ruling that a real estate agent owes fiduciary duties to both the buyer and the seller when one brokerage represents both sides of a transaction. In this instance, that underscored the importance of making sure, and taking all possible and necessary steps, to provide all pertinent advice and information to the buyer about the square footage. There’s just one big problem here that still doesn’t go away with the decision. This level of disclosure won’t be easy for agents and brokers representing both sides and isn’t void of risk for either one. By the very nature of dual agency’s definition, this conflict of interest will always exist. So the question on the table is…do you want to risk being involved in a transaction that might end up in court? And possibly jeopardize your large investment?
Exclusively representing buyers and putting their interests first – always – Exclusive Arizona Buyers Agents provides the safest pathway to finding the Scottsdale, Paradise Valley or Phoenix luxury home of your dreams.


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