59 Pages Posted: 6 Mar 2012
Date Written: March 5, 2012
The top three issues that cause the most disputes for US residential real estate agents are dual agency, disclosure, and breach of fiduciary duty. Despite legislative efforts in the past two decades to clarify and reduce the duties of dual agents, agents and consumers are still confused about agents who represent both sellers and buyers. They owe double, not half the loyalty owed to one principal.
The stakes are high because home ownership is critical to our economic recovery and the chief source of wealth for most Americans. This article examines the dual vulnerability of consumers and agents, the double duty of loyalty, and proposes guidelines for dual agency. These include half and not double commissions. Dual agency should be rare. However, if properly used, the double duty of loyalty may lead to better house pricing and fidelity in our real estate market. Even in jurisdictions which have lowered standards for dual agents, where lawful, agents can and should exceed these standards.
Keywords: real estate agent, agency, real estate market, fiduciary duties, duty of loyalty, fiduciary duty of loyalty, housing crisis, real estate, consumer, consumer protection, real estate transactions, agency, disclosure, residential housing, home, home sales, house, housing demographics, legislation
JEL Classification: K11, R21, D18, J15
Suggested Citation: Suggested Citation