Tuesday, September 9, 2014

Dual Agency is "Bait and Switch."

There is a new found medical term in the Real Estate industry call “Selective showing” just like Selective memory “Selective showing” is a rare symptoms found only when working with a dual agency. For some reason the agent is only able to remembers to show the buyer the listings that are ether listed by the same agent and office or where the most effective commission is available. There is a cure for these symptoms, and it’s to work with a buyer’s agent. A dual agent is counting on the buyer thinking that they are going to get a better price by working with the same listing agent. NOT TRUE!


Dual agency is a way for brokers to unfairly get paid double. It is most prevalent at large brokerage firms (we recommend avoiding these). Commissions are already arguably too high and savvy consumers can avoid paying a double fee while also preserving their right to representation.
Dual agency occurs when real estate agents from the same firm claim to represent both the buyer and the seller in the same transaction. Representing adversarial interests at the same time is a legally impossible situation ("serving two masters") and is illegal in every other profession. Worse, brokers are incentivized with a double fee if they manipulate you to agree to this.
Dual agency (also known as Designated Agency) is often  branded (even marketed) to consumers by large brokerage firms as a thing of value - it is not. Although the term “dual agency” seems to infer an important relationship of trust and reliance, dual agency is a betrayal in which the firm becomes a secret double agent that only gets paid double if they can convince you to do it.
In order to avoid dual agency, seek out smaller, highly qualified and independent brokerage firms that understand and agree to other more favorable relationships such as Exclusive or Single Agency representation.
Negotiating Tip: Sellers, instead of negotiating a bundled commission, negotiate each part of the commission. Do it yourself ("unrepresented") buyers typically receive no financial benefit for their work. Instead the listing broker confiscates the entire amount (a hogger). So instead of negotiating a 5% commission, negotiate how much your listing broker will get (2% for example), negotiate how much will be offered to buyer brokers and do it yourself buyers (3%). When buyers are searching, yours will stand out because buyers stand to save 3% only on your house by doing it themselves. Listing brokers should not care whether the 3% is paid to buyer brokers or buyers. If they claim that they have to do more work, then keep shopping until you find a listing broker that is willing.
Looks like this:
Listing Broker: 2%
Buyer Broker or Do It Yourself Buyer: 3%

Bait and Switch
Dual agency is potentially one of the worst “bait and switches” possible because it involves the “switch” (abandonment) of a trusted advisor and advocate. Even with disclosures, consumers rarely expect the change in relationship (and often never even know that it occured) that comes with dual agency and they are almost never prepared for the complete abandonment that defines dual agency. And despite the degradation in the level of services in a dual agency situation, the client ends up paying double.

Should Less Service Equate to a Lesser Fee?
The Consumer Federation of America came up with a recommended fee schedule that suggests a sliding downward scale to align the degradation of services that results from dual agency with a lowering of the fee Realtors charge.  According to them, less service should translate into a lower fee. 
It is Illegal for Attorneys to Practice Dual Agency
It is illegal for attorneys to engage in dual agency in adversarial relationships. Yet, attorneys possess far higher entry level licensing standards and education requirements than do Realtors.  In addition, attorneys are trained in how to manage conflicts of interest. Realtors are not.
Attorneys must have a post graduate doctorate degree and pass a State Bar Exam in order to become licensed. They also have a meaningful Code of Ethics that provides substantial and public penalties for infractions. Even with their thorough training in agency relationships and conflict management, attorneys avoid dual agency because it places too much risk on their clients.
Licensing requirements for real estate agents are essentially non-existent.  The minimum standard to obtain a real estate license in the United States doesn’t even require a high school diploma and an individual can often obtain their license after taking only a 30 hour class on how to pass the exam.  And their "Code of Ethics" is designed to protect Realtors, not clients and is enforced by peers who are members of their trade association and all decisions are kept private.  Real estate licensing laws are typically lax as is enforcement of those laws.
There really is no comparison. Realtors do not possess the necessary training or education to engage in such a complex relationship as dual agency.
Despite the complete lack of minimum standards and the incredible complexity and danger of dual agency, it is now legal in most states for Realtors to practice dual agency.
Attorneys run conflict checks to avoid dual agency and have for the most part bifurcated their profession into plaintiff and defendant firms. Nothing like that system exists for Realtors. We believe that it should. To make matters worse, Realtors don’t understand dual agency, they have little training in conflict management,and disclosure forms are misleading and inadequate.  Consumers don't understand it, are highly vulnerable and typically rely upon their Realtor for skewed and inconsistent “advice” about dual agency.  And to totally drive the malfeasance home, Realtors are financially encouraged to practice dual agency and fondly refer to the bagging of dual agency clients as a “hogger.”

The Worst Kind of Swine Flu 
Dual agency (aka "Hoggers") exist to enable real estate brokerage firms to grow to enormous size and to unfairly collect double commissions.  It's greedy, dishonest and anti-competitive.  Similar to theft by swindle, dual agency is highly profitable and relies upon the vulnerabilities of its victims to succeed.  We call these double agents "predatory fiduciaries" because their practices differ little from those of the predatory lenders. Ironically, dual agency was a response to an innovative entrepreneurial business model called exclusive buyer agency that was quickly gaining market share and improving the real estate marketplace. Exclusive buyer agency offers a legitimate and substantial benefit to consumers in that agents refuse to expose clients to dual agency and offer only exclusive loyalty their buyers. 
Exclusive buyer agency still exists and is promoted by a trade organization called the National Association of Exclusive Buyer Agents (www.NAEBA.org). We have a list of Exclusive Buyer Agents listed in our Service Providers section in the upper right sidebar of this page.

Excessive Realtor Lobbying Power
The National Association of Realtors is the post powerful lobbying group in the United States. They claim that 97% of the legislators they support get elected. It is considered political suicide for legislators to go up against this group. Add in the lobbying power of its sister and subservient industry groups and you will understand why it is a truthful remark to state that, "No real estate related law will get passed unless the Realtors sign off on it first."  

Legalizing dual agency allowed the Realtor Associations' membership to get paid double while betraying their own clients. Legalizing dual agency is akin to legalizing fraud. In fact, the courts describe "undisclosed dual agency" as fraudulent conduct. We find it incredulous to even try and state that consumers receive dual agency disclosures even close to what the common law requires of other professions. Consumers certainly are not giving their informed consent (another common law standard).

Without an all powerful lobbying group behind them (National Association of Realtors “NAR”), it never would have been possible to legalize conduct that is more accurately described as a betrayal. The common law standard to permit dual agency requires a full disclosure of all the material conflicts of interest (an almost impossible standard) and the informed consent of the client (another almost impossible standard). Rather than adhere to these common sense standards, Realtor Associations across the country changed the law so that they could double dip. They amassed a colossal lobbying effort to rewrite state laws to allow for dual agency. In one lobbying effort they defiled two hundred years of common law and eliminated an important and already successful point of redress for consumers who were harmed by dual agency – class action lawsuits.

 "Dual Agency is a Totally Inappropriate Agency Relationship"
Hypocritically, it should be noted that the National Association of Realtors previously took the position that, “Dual agency is a totally inappropriate agency relationship for real estate brokers to create as a matter of general business practice…The disclosures and consents necessary to make a dual agency lawful are so comprehensive and specific that a typical real estate broker cannot undertake them as a matter of routine.” Taken from “Who Is My Client? *– A Realtors Guide to Compliance with the Law of Agency” 1986 National Association of Realtors. See attachment below.  The Executive Vice President of the Association also wrote a letter about the topic.

 Dual Agency Should Be Banned
CAARE’s position on dual agency is that it should be banned. It is an insurmountable conflict of interest that results in the abandonment of the client when they need their agent the most – right when they find the property they want. We believe that banning dual agency is possible with enough public support. We have drafted petitions and have lots of information to help provide imepetus for this change. At the very least, investors who loan mortgage money should forbid dual agency in their transactions. In addition, HUD should forbid dual agency on all federally funded loans that involved especially vulnerable distressed home sellers (short sales). When mortgage fraud is rampant, consumers need more than ever to be able rely upon their Realtor for exclusive representation and unbiased and untainted advice. We would like to see the elimination of disclosure statements that disclose bad conduct like dual agency and see in its place the elimination of bad conduct like dual agency.


*The National Association of Realtors' Official position on dual agency in 1986, "Dual agency is a totally inappropriate agency relationship..."
http://www.caare.org/content/dual-agency-ultimate-bait-and-switch

Friday, September 5, 2014

Never Agree to Dual Agency

Dual agency means serving two masters.  No other profession is permitted to routinely engage in this practice that most professionals feel should be banned (see our attorney survey on this topic).  No other profession has special laws written for them that automatically reduces their liability in these relationships. And real estate agents are perhaps the least qualified to handle this conflict.  Dual agency occurs when real estate agents represent both the buyers and sellers on the same transaction.  When that happens real estate brokers collect a double commission and  they are prohibited from doing anything to the detriment of either party.  That means that they can not help you negotiate price or terms of your real estate transaction.  It means that they are getting paid twice as much for doing a tenth of the work.  

Dual Agency is a conflictive relationship that strips buyers and sellers of service to a level that can best be described as abandonment. Dual agency arises when the real estate broker is representing both the buyer and the seller. It is illegal in every other fiduciary profession except under the most extreme circumstances. It is routinely practiced in residential real estate where there is the least amount of training. When a real estate broker engages in dual agency they may not work to the advantage or the detriment of the buyer or seller. In other words, all the reasons you hired your broker vanish - often with little warning.

Dual agents are legally prevented from negotiating price or terms (two of the most important reasons consumers hire Realtors). And perhaps the biggest problem with this betrayal is that it usually presents itself with little warning to the client - it is a bait and switch. The broker could be acting in the client's best interests all the way up to finding the house that creates a dual agency. At that point the buyer or seller are on their own.

In a dual agency, brokers don't have to share the commission with other brokers so they make twice as much money. They profit greatly from this practice. Realtors, who typically have no understanding of the legal ramifications of their own fiduciary relationship with their clients, often illegally counsel their clients of the so-called "benefits" of dual agency. We're here to tell you that there are NO benefits and that you should NEVER agree to dual agency. Find a small brokerage firm with highly qualified real estate agents and demand that they not engage in dual agency. The likelihood of dual agency arising with a smaller firm is far less than with a large firm.

http://www.caare.org/DualAgency

DOUBLE BUBBLE, DOUBLE DIP, ME-ME

Would you hire the same Divorce Attorney that is representing your ex partner?
Why would anyone think they are getting a better deal when their Agent also represents the seller?
Back in the Day…

Back in the day, when interest rates were 18%, and the MLS consisted of a huge 3-ring binder, agents and brokers mostly represented sellers, but the public didn’t exactly understand this. They would call up an office, or a listing agent to see a home, write an offer, and assume that whoever wrote that offer, was representing them. They had no clue that the listing company and agent were actually representing the seller!
Over the years, and many lawsuits later, the evolution of agency has emerged. And to be honest, the public still doesn’t get it, and neither do many agents.  The National Association of Realtors has released their Bi-Annual Legal Scan, and while agency in and of itself isn’t the leading cause of disputes, dual agency came out as a high ranking issue.
  
What is Dual Agency?
Dual agency occurs when one agent represents both the seller and buyer in the same real estate transaction.
When a potential buyer sees the advertising for a home for sale and calls the listing agent, the listing agent has a choice to show the buyer the home but only represent the seller or to convince both parties to agree to dual agency.

SOME CASES ARE NOT DUAL AGENCY

For example, a buyer wants representation by a REALTOR® while purchasing a FSBO. This can be confused with dual agency, and often is, but as both  parties are not represented (the seller is representing them self), there is no dual agency.
Some people may  not need to have representation. If we think of the experienced  investor, the lawyer selling a FSBO that only needs their house in the  MLS but is fine to handle negotiating, the contracts, and closing, or  possibly the buyer who has purchased before, and feels comfortable  enough to buy without the use of a buyer’s agent, but wishes that the agent  coordinates the closing details.

What are the Agents Responsibilities in a Dual Agency Situation?
If they are a REALTOR®, ethics says confidentiality for both parties   should be the norm. So even though the agent is working now for both   buyer and seller they have to provide fair business dealing to both.
However, the practice of representing both parties in a transaction  is  SLIPPERY.  One basic rule of agency requires maintaining   confidentiality.  When an agent represents both parties, the rules of   confidentiality essentially make the agent a document preparer at best.    They can’t share information about either party with the other.
For   instance, an agent representing both cannot tell a seller what the   buyer is willing to spend.  Conversely, the agent cannot tell the buyer   what the seller is willing to take.  Within the rules of agency   representation, it’s required that when an agent knows a material fact,   they must share that fact with their client.
The most important point for you to know about dual agency is that if   your agent is also representing the other side, your agent cannot advocate for you in negotiations or give you advice on pricing. This means that when you hit a stumbling block in the negotiations, your agent can’t fight for your needs.
 Let’s say that a buyer and seller are negotiating and they are $5,000 apart on purchase price. When we represent the buyer, our job is to convince the seller that our buyer will not pay more and that they should take our offer because it is the best they will do. As a seller’s agent, our job is to convince the buyer that the house is worth more than they are offering, and the seller won’t reduce the price any more.
 Dual agents can’t take either of these positions.
 All a dual agent can do is present to each client what the other side has responded, and ask if the offer on the table is acceptable or if they want to make a counteroffer.

 Who Benefits from Dual Agency?
 With real estate agents coining terms like Double Bubble, Double Dip, Me-Me it’s no wonder there is a perception that Buyers and Sellers don’t benefit from dual agency. 
The only person who benefits from dual agency is the agent.
Many agents are eager to act as dual agents because they get to keep the entire commission. When an agent is hired to sell a home, a portion of the commission paid to the listing agent is given to the buyer’s broker. If the agent represents both sides, then they get to keep the entire commission.
How do I handle Dual Agency Situations?

I don’t do dual agency except in rare situations.
I think it is a bad idea and not in my clients best interests.
If I have a listing and show the property to buyers without their own agent, I explain that I am represent the seller. I let them know that they have 3 choices if they like the property and want to make an offer:
  • I can assist with the paperwork  and the contract details just like a store salesperson can assist  the people that are purchasing products from the store. I represent  the seller and will encourage the buyer to accept the terms that the  seller wants. By the way, this is exactly what new construction  salespeople are doing when a buyer purchases a new home without a  buyer’s agent.  But this would be illegal when the Realtor/Broker is part owner of the construction company. This information must be disclosed to all buyers and when this information is not disclosed this would be considered a violation of license law. In this scenario you will end up losing more and paying more for your new home.
  • I can refer them to another agent  that can act as their buyer’s agent…an agent that can represent  just their interests.
  • They can find a buyer’s agent on their own, and have that  agent submit an offer on the house.
The next time you are in a market to buy, make sure you have your own agent.
If you discover a home through an ad or a yard sign, call an agent that you can trust and that will represent you– not try to sell you on dual agency. Rather than calling the agent working for the seller, and I can arrange a private showing for properties anywhere in Bloomington, Indiana.
http://www.welcomehomebtown.com/double-bubble-double-dip-me-me/

Thursday, September 4, 2014

MY AGENT SAYS HE WILL BE DOUBLE DIPPING - THAT SOUNDS GROSS

First-time buyer – My agent showed me a house that I like and for which he is the listing agent.  I heard him use the term double-dipping. I know you’re not supposed to do that with chips and dips, but what is that all about in real estate?
Answer - Double dipping at the chips and dip station is a nasty party etiquette faux pas and it can be a nasty real estate practice too, involving not so much etiquette as ethics. Some states have enacted real estate laws and practices to limit the practice or at least to bring full transparency to it. Michigan is what is called a Designated Agency state. That means that we have laws that define the agency role and responsibilities when a Realtor signs a client up to be their listing agent or their buyer agent and it requires a clear definition and agreement with the client about what role the agent is playing.  The cornerstone of the concept of agency is the agent’s fiduciary responsibility to the client.
Curt Vonnegut used to do a commercial for TIAA-CREF, the retirement programs people, in which he had fun with the word fiduciary. It does sound funny. 
From Wikipedia comes this definition of a fiduciary –
A fiduciary is a legal or ethical relationship of trust between two or more parties. Typically, a fiduciary prudently takes care of money for another person.  In a fiduciary relationship, one person, in a position of vulnerability, justifiably vests confidence, good faith, reliance, and trust in another whose aid, advice or protection is sought in some matter. In such a relation good conscience requires the fiduciary to act at all times for the sole benefit and interest of the one who trusts. A fiduciary duty is the highest standard of care at either equity or law. A fiduciary (abbreviation fid) is expected to be extremely loyal to the person to whom he owes the duty (the "principal"): such that there must be no conflict of duty between fiduciary and principal, and the fiduciary must not profit from his position as a fiduciary (unless the principal consents). This also goes for Realtor working directly with a local builder. This is also called double dipping and when that Realtor/broker is part owner of new homes being built and sold by the same agent, that’s illegal.
So, when a client signs up with a real estate agent to list his house, the agent takes on a fiduciary role with that client. That means that the agent may learn things from the client that the client does not want to others to know, such and how much he’d really sell the place for. The agent is bound by his fiduciary relationship not to disclose that to a buyer. The agent owes his loyalty to the seller.
So what happens when that same agent signs up a buyer couple and starts looking for houses for them. He owes fiduciary loyalty to the buyers and shouldn’t disclose things like how much the buyer is willing to pay to any sellers. So far, so good.
Now, suppose that the agent is sending the buyers listings and they happen to see one of his listings and want to see it. Even worse, they love it and want to put in a bid on it. Where do the agents loyalties lay now? Can that agent serve two masters? Some states allow that to happen and some put some pretty good restrictions on what the agent can do and what level of transparency has to be maintained for both parties to the deal.
Michigan requires that the agent get the written permission of both parties before he should even show the house to the buyers. That written permission should state clearly the compromise that the agent will have to make if placed in this position. The things that need to be dealt with in that document include what the agent can and cannot disclose to either side and includes a strict prohibition against sharing any secrets or confidences that either party has already shared with the agent. Potentially a bigger issue is the fact that the dual agent can no longer negotiate for either side. If having the agent there to handle the negotiations was important to either side, that is gone if the agent is allowed to become a dual agent. Some states, like California, that don’t have designated agency laws in effect, are currently dealing with dual agency cases in their court systems that could have major impact across the country.
So, what’s the double dip thing? That means that the agent is going to receive both sides of the commission – double what he/she would normally make – thus a double dip into the commission pot. That’s not an illegal things or necessarily a bad thing, but is does provide the motivation to perhaps not render as much fiduciary responsibility as is still possible. The agent may become more motivated by the opportunity to double dip that to protect the interests of both parties. Money tends to corrupt like that.
How can you protect yourself against the potential problems that could be caused by dual agency? The simple answer is not to allow it. Since the agent needs to have your permission in most states to act in a dual agent role, just tell them that you’d prefer not to do business that way. Ask them to have a different agent represent the buyer or you, so that each of you has an agent who can give you the full fiduciary attention and responsibility that you should have. In states that don’t have Designated Agency laws that may mean finding an agent in a different company.  
Your agent may refer you to another agent and it is perfectly legal for him/her to get a referral fee for doing that. That way you are still rewarding the agent who worked for you and found you the house that you want, even if he/she can’t be there with you through the sale. If your agent refuses to do something about the dual-agency issue, then fire that agent and find another agent. He/she was more interested in double dipping that in making sure your interests were properly served.
The agent might take the position that he can represent only the seller but can still do the paperwork and put the deal together. Listing agents who meet unrepresented buyers at open houses in their own listings often take that approach. You’ll need to decide whether you feel comfortable with that and whether you are concerned that the agent may already know enough about your and your wherewithal to put you at a disadvantage in the negotiations – people do tend to talk at open houses, especially to the friendly, nice man that showed them through. You can see how hard this can be to keep straight. Double dipping has been a fairly common practice in many places and is a favorite with many agents for obvious reasons; but, the bottom line is that it’s up to you and you need to feel completely comfortable with the representation that you will be getting in the deal. If you are not, remember the advice that you used to hear about drugs or teenage sex, just say no.
 http://normwerner.realtytimes.com/advicefromagents1/item/28614-my-agent-says-he-will-be-double-dipping-that-sounds-gross

Wednesday, September 3, 2014

Should A Home Buyer Use The Listing Agent?

Very Will said. Excellent article! This is one of the best written articles of dual agency I have seen in a long time. This is a must post article in my area just because of the overwhelmed practice of dual agency. 


Double Dipping

Dual AgencyHome Buyers should be aware of what Dual Agency means specifically to them and the purchase of a house or condo.   In the real estate business we refer to this as “double dipping.”
It has been written about for years that when a listing agent also represents the home buyer, it either means no one gets represented fully where the real estate agent becomes neutral or the home buyer is left out in the cold with no representation at all. You need to remember that a relationship was established with the home seller long before the home buyer came into the picture.  In other words the fiduciary relationship was originally with the seller.  You can’t serve two masters fairly! And don’t let anyone try and convince you otherwise.

Dual Agency is Double Dipping

A definition of dual agency is “a breach of agency rules” which must be disclosed to the parties because the agent has a conflict of interest when representing both the buyer and the seller. That should tell you something!
I prefer an “arms length” transaction where I totally represent my client and I do NOT do dual agency. Anyone who says they can give both sides equal representation is fooling himself/herself as well as the uneducated client.
Do some real estate agents like dual agency, well sure they get paid twice. But, for the inexperienced real estate agent who thinks only of the double commission, they may find a lawsuit will eat up that double dipping!  The number 1 claim and complaints filed are about Dual Agency. More real estate complaints occur due to Dual Agency where the client’s did not feel they were fully represented.
These are the States that ban Dual Agency:
  • Alabama
  • Florida
  • Kansas
  • Maryland
Now, the uscrupuious listing real estate agent who has lingo down pat of, “I’ll give you your own PRIVATE showing.” Or scares the buyers into thinking they have to write a contract with the listing agent in order to get the house are all examples of an unethical real estate agent. The uneducated, naive home buyer is typically the one who falls for this lingo. And in the end, some of those very home buyers actually think they got a good deal…how sad!
Private showings are always the case whenever a home is shown unless it’s an Open House so don’t fall for the “private showing” gibberish. And scaring a home buyer into thinking they must write the offer with the listing agent in order to get the house is not only unethical, it’s a lie.  The seller will pick the best offer.  The seller only cares about how much money they will net.  So, don’t fall for that lie.
Do you double dip your chip in the dip? Then don’t be represented by the same real estate agent that represents the seller.  Some things are just not Kosher.  And if you have an established relationship with a REALTOR®, then by all means be loyal and don’t fall prey to ridiculous rhetoric from a listing agent.
In summation, this article is for all home buyers.  You have now become educated on the pitfalls of NO REPRESENTATION when going along with Dual Agency.  The first question an ethical REALTOR® asks is, “are you currently working with a real estate agent?”
A unethical agent never asks and ropes you in and hopes you fall for their tricks while smiling all the way to the bank.  Wise up home buyers and don’t be taken! When you go to that Open House without your REALTOR®, then take their business card with you and speak up…I have a REALTOR®.
http://sacramentorealestatevoice.com/should-a-home-buyer-use-the-listing-agent/#comment-44863

Monday, September 1, 2014

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Sunday, August 24, 2014

Buyers should beware using seller's agent!

There's an adage that says you get what you pay for. The warning is especially relevant for homebuyers who work with the listing agent in a so-called single-agent transaction.

"I've heard too many war stories about buyers who think they'll get a better deal by going directly to the listing agent of the property," says Bill Golden, a Re/Max agent in Atlanta. "Most often, they do not get a better deal, and they end up not being represented properly in the negotiations."

In fact, buyers who use the listing agent aren't represented at all, which is why single-agent transactions seem abhorrent to many real-estate professionals.

"If you were being sued by someone, would you use the same attorney as the person suing you? Of course not," says Deb Tomaro, a Re/Max agent in Bloomington, Ind. But data from the National Association of Realtors seems to suggest that as many as 10 percent of residential transactions could be single-agent deals. (The trade group doesn't have direct figures on buyers using listing agents, but instead relies on member surveys, which track real estate firms, not individual agents.)

Confusingly, the terms "dual agency" and "single-agent" transaction mean the same thing, with the difference being that of perspective: The agent sees his or her role as that of a dual agent because the agent represents both parties, whereas a buyer would view a deal with only one agent as a single-agent transaction.
Why do buyers work with the listing agent?

Typically, buyers who choose to work with the listing agent say they do so because they think they're getting a better deal. But agents like Jon Sterling of Chase International in Tahoe City, Calif., have doubts.
"The idea that buyers can negotiate to get the listing agent to give up part of their commission because the buyers are unrepresented is a myth," he says. "Sure, some people have been successful doing that. It's the exception, not the rule."
It also doesn't make much sense when you consider that sellers, not buyers, typically pay commissions, according to associate professor Eric Chen, who teaches business at the University of Saint Joseph in West Hartford, Conn.
"If the buyer is working with the listing agent, be aware of the conflict of interest problem that exists," says Chen. "Remember that the listing agent is interested in getting a deal done, and the higher the purchase price, the bigger the commission to the agent."

Do buyers actually pay more?

Data are mixed on whether buyers in single-agent transactions end up paying more, according to Bennie Waller, a finance and real estate professor at Longwood University in Farmville, Va., who has co-authored two papers on the topic. But the reason for the mixed results, says Waller, most likely has to do with the time the property is on the market. Single-agent deals that happen within 30 days of listing typically sell for a 10 to 18 percent premium. But when the property sells within the last 30 days of the listing contract, the price actually drops by 5 to 6 percent.

What's the harm?

The problem with the single-agent deal is that it makes it impossible for the agent to fulfill a fiduciary duty to both parties.

"The agent has an inherent conflict of interest when working with the buyer," says John O'Brien, a Chicago attorney who handles real estate transactions. "It is very difficult for the agent to keep his knowledge of the buyer's negotiating points, including their best price, from becoming known to the seller, either directly or through the agent's advice to the seller regarding counter-offers."

Beyond price, buyers should understand that a single-agent deal creates the opportunity for a problem on virtually every deal point, says Chen.

"Because of the conflict of interest, there is a real chance that the agent doesn't have the buyer's best interests in mind," Chen says. "It doesn't necessarily happen every time. However, the pressure, opportunity and rationalization are all there for the seller's agent to act in their own client's interest and against the interests of the seller."
Not everyone sees an automatic conflict of interest.

"There are some who feel that it is an automatic conflict to represent both parties," says Sterling Watkins, a broker-owner with Help-U-Sell of Folsom, Calif. "I happen to disagree. If no confidences are violated, each party has a chance to make a decision at every turn in the road."

Although Watkins certainly has the minority opinion on the matter, it's worth pointing out that most real estate firm contracts do contemplate the possibility of a single-agent deal. But, as Chen says, "that language usually looks an awful lot like a waiver."

GEORGIA IS A DUAL AGANCY STATE!!!!! BUYER'S BEWARE!!!!!!  Georgia is a Dual Agency State. 99% of homes sold in South Georgia are sold by the same listing agent and it's not to benefit the buyer or seller...... 

http://www.bankrate.com/finance/real-estate/buyers-using-sellers-agent.aspx