Another follow up on Agency in North Carolina: This time, we will explore Dual Agency and Designated Agency relationships. Under Dual Agency, Buyers and Sellers are equally represented by the same Brokerage Firm. Village Realty (and most Brokerages for that matter) list properties for sale and in doing so, form a Client relationship with the Sellers. Throughout the listing period, the Listing Agent is obligated to put the Seller’s interests first. However, Village Realty and many other Brokerage Firms also form relationships with Buyers, whereby the Agent is obligated to put the Buyer’s interests first.
Dual Agency arises when a Buyer Client desires to view and perhaps purchase the property of a Seller Client of the same Brokerage Firm. Typically, the Buyer Client and Seller Client are working with different agents within the same Firm. However, it is possible that an Agent show a Buyer Client one of their Seller Client’s properties. In either case, Dual Agency has been created. Remember, the Firm owns the listing.
By law, Dual Agency or the possibility of Dual Agency must be disclosed and then allowed by ALL parties involved in the transaction. As a Dual Agent, the Agent must not disclose confidential information to either party. The Agent has an obligation to both Clients to disclose facts which are, by law, considered material to the transaction. The Agent(s) must treat the interests of the Buyer Client and Seller Client equally.
If/when two Agents are involved in a dual agency situation, the Brokerage and/or Broker-In-Charge, may designate one Agent to represent the Buyer Client while the Listing Agent continues to represent the Seller Client. It’s important to note that confidential information must not have passed between these Agents already or another Agents must be appointed. This is known as Designated Agency. Designated Agency provides both clients with representation and negotiation assistance under a single Brokerage.
In all cases, in North Carolina, and Agent must explain Agency to any potential client and have them acknowledge it was explained at first substantial contact. Adequate disclosure should prevent a client from sharing confidential information prematurely. It's important to understand when and how you are being represented in any real estate transaction.
As always, please feel free to ask questions.