AGENCY PRIMER

WHICH IS BETTER: DUELING AGENTS or DUAL AGENCY ?

First things first:

The standard Hawaii Association of REALTORS® 12 page form for submittal of offers to buy property* begins, in bold letters, with two sections, AGENCY and DISCLOSURE.

In the AGENCY section (A-1) the possible forms of representation are:

Seller’s Agent:
The case when a Brokerage firm (and hence all of its Realtors) represents the Seller only.

Seller’s Agent owes the highest duties to the Seller, including confidentiality, loyalty, and utmost care.

Buyer’s Agent:
The case when a Brokerage firm (and hence all of its Realtors) represents the Buyer only.

Buyer’s Agent owes the highest duties to the Seller, including confidentiality, loyalty, and utmost care

Dual Agent:
The case where the Brokerage firm (and hence all of its Realtors) represent both the Seller and the Buyer and “must remain neutral in negotiations and must not advance the interest of one party over the other”.

No Agency Representation:
In this instance a Buyer is considered to be a “Customer” and is admonished by the Association of REALTORS to seek legal counsel prior to signing a contract to buy.

In the DISCLOSURE section (A-2) the exact relationship between the Agents and the principle (you if you’re a Buyer) is spelled out. Before a single Agent can function as a representative of both a Buyer and Seller all parties have to sign a separate Dual Agency Agreement.
So…

What to make of all this? Maybe it would be-maybe it wouldn’t be-an overstatement to say Caveat Emptor (“Buyer Beware”) but surely not “Buyer Be Aware”.

* Previously called a “DROA (standing for Deposit Receipt, Offer and Acceptance); that name masked the fact that the 12 page document is in fact a legally enforceable contract between a Seller and Buyer. It was recently renamed “Purchase Contract”…nice and clear!