Utah continues to be one of the hottest real estate markets in the country, particularly in the Salt Lake City and Provo areas. A strong economy buttressed by new companies moving into the state is attracting transplants from all over. The migration provides plenty of opportunities for real estate agents and brokers. Some are capitalizing on the hot market by acting as dual agencies.
The laws governing dual agencies vary from one state to the next. In Utah, it is completely legal for a brokerage to act as a dual agency. Under such circumstances, a single broker or agent representing both the buyer and seller in a given transaction. Dual agencies are also known as limited agencies in the Beehive State.
As a seller, should you even consider working with a dual agency? There is no right or wrong answer. Rather, it is important that you understand dual agencies and how they operate so that you can make an informed decision. In the end, your real estate agent should be looking out for your best interests.
Agent Fiduciary Responsibilities
CityHome Collective is a Salt Lake City real estate brokerage and design firm. When one of their agents works for a buyer, that agent has a fiduciary responsibility to that individual. In other words, the agent has a legal duty to look out for the buyer’s best interests. The same would be true if one of their agents represented a seller.
A dual agency arrangement is slightly different. It is impossible to be a true fiduciary when you are representing both parties in a legal transaction. As such, state law sets a much lower fiduciary bar for dual agents. In essence, a dual agent becomes almost neutral in the transaction. This has quite a few practical implications.
A standard transaction involving separate agents for buyer and seller allows for agents giving their clients sound advice. Such advice is not so easily forthcoming when you are working with a dual agent. After all, how can an agent give you seller’s advice intended to help you get maximum price while simultaneously advising the buyer on how to get a lower price?
Along with advice is assistance with negotiations. Again, separate agents can negotiate on behalf of their respective clients to find common ground that makes both happy. A dual agent cannot negotiate with themself. They cannot negotiate on behalf of both clients. So they end up being little more than a moderator between seller and buyer as they handle their own negotiations.
There Are Positives
There are plenty of reasons to be skeptical of dual agency arrangements in Utah. But there are also positives as well. For example, you might be able to negotiate lower commission fees under a dual agency scenario. The agency is scoring both sides of the commission equation, so they might be willing to accept less in exchange for representing both you and the buyer.
Another benefit of the dual agency is its ability to get deals done faster. Because you are dealing with only one agent, there is less back-and-forth communication. Paperwork is handled more quickly, there are fewer phone calls to deal with, etc.
The underlying point of this whole discussion is the basic concept of knowing what you are getting into before you agree to anything official. If you’re interested in dual agency representation, make sure you do your homework first. A dual agent can certainly sell your Utah home. But is dual representation in your best interests? You are the only one who can make that decision.