Real estate agency relationships can be a bit confusing, especially for first time buyers and sellers. There are different terms and options, which can vary from one real estate brokerage to another. One very important term that anyone in the real estate market should know about is MA Dual Agency relationships. Here’s what buyers/sellers should know about this agency relationship.
What is MA Dual Agency
Dual agency occurs when the same real estate agent/broker represents both the buyer and the seller in the same transaction. It normally occurs when an agent already has a buyer agency relationship in place and that buyer is interested in one of the agent’s own listings.
Agents have certain fiduciary responsibilities to their clients: confidentiality, care, obedience, accounting, diligence, and disclosure. However, when one agent is working with both buyer and seller, he/she obviously cannot provide the full extent of those services to both parties. In order to treat them both fairly, there will be limitations to what the agent can disclose or do.
Authorizing Dual Agency
The good news is, real estate agents in Massachusetts cannot practice dual agency without the express written consent of both parties. Both would be required to sign a specific form indicating that they approve the dual agency. But, what if you don’t want to consent?
Fortunately, the state of Massachusetts offers an alternative to MA dual agency. They have something called designated agency. It requires 2 agents from the same real estate agency. One agent works as a designated agent for the buyer and the other a designated agent for the seller. This way, each can provide the full range of services to their clients in the same transaction.
There’s a common misconception that buyers walking into an open house without an agent will create a dual agency situation. This is not necessarily the case. If the listing agent does not have an existing buyer agency relationship with a buyer, they will work solely for the seller. They simply need to disclose that to the buyer.
What Buyers/Sellers Should Know
As a buyer or seller in Massachusetts, if you are uncomfortable with the prospect of a dual agency relationship, be sure to ask whether the real estate brokerage practices designated agency. This ensures that you will continue to receive the full scope of services from your agent and avoid a dual agency situation. If you require any legal assistance during the home buying or home sale process, please give us a call!