For the past few days I've been reading dualing (dueling) blogs about Agency - who represents whom in a real estate transaction.  It's not far different than the months/years-long debate continuing on a popular real estate listserv.

Agency is the concept behind who's representing whom. Until the mid-1990s there was nothing to debate as all real estate brokers represented the sellers and the sellers only. It wasn't until the mid-1990s that someone asked the buyers who they thought had represented them (or if they thought they had been represented) when they bought their homes. The majority of buyers thought the agent who had written the offer for them was representing them. Problem.

And so Buyers' Agency was developed - the idea being a real estate agent (really the brokerage firm, as all licensees are working as representatives of their broker but I'm trying to keep this approaching simple) can represent a buyer solely just as agents had been representing sellers solely for decades.

In Arizona, Realtors (and not all agents are Realtors - only members of the National Association of Realtors) use the Arizona Association's Real Estate Agency Disclosure and Election form. The language is tedious but it boils down to a handful of basic precepts:

• A buyers' broker, while compensated (in most cases) by the seller, represents the buyer and has the fiduciary duties of loyalty, obedience, disclosure, confidentiality and accounting in dealings with the buyer
• A sellers' broker has the fiduciary duties of loyal, obedience, disclosure, confidentiality and accounting in dealings with the seller
• A broker performing dual agency (either with one agent representing both sides, or two different agents employed by the same firm handling each side) can do so only with the knowledge and informed consent of both the seller and the buyer. Quoting the form: "the broker will not, without written authorization, disclose to the other party that the Seller will accept a price or terms other than stated in the listing or that the Buyer will accept a price or terms other than offered." Also, "there will be conflicts in the duties of loyalty, obedience, disclosure and confidentiality. Disclosure of confidential information may be made only with written authorization."

The idea of inherent conflicts in part led many firms to decide proactively not to permit dual agency situations as a matter of firm policy. In a more extreme example, it also has led to the creation of "Exclusive Buyers Agents" - firms who will not accept listings and instead represent only buyers.

I disagree with the necessity of either step, outside of a company filling a niche in the real estate business.  

Many agents spend a considerable amount of time wringing their hands over the evils of dual agency, even those who according the local MLS have engaged in dual agency in the past. The primary argument against dual agency is neither side is benefitted, that neither the seller nor the buyer can be represented fully when both are represented by the same broker. To these folks, it is very much a black-or-white, my-way-or-the-highway type of argument. Practitioners of dual agency will burn in their own personal circle of hell while those who eschew the idea will enjoy an afterlife of ambrosia and Charlie's Angels re-runs.

But the answer is not so simple. According to the Arizona Association of Realtors' Agency Disclosure, our fiduciary responsibilities lay with both parties. Must one absolutely come at the expense of the other? At heart, we're talking about working in our clients' best interest In some instances, is it not possible for the buyers or sellers "best interests" to be served through dual agency? Are we to be the arbiters of what is and is not in the clients' best interest or is it not possible for grown adults to make an informed decision? We're not talking about splitting the atom - we're talking about the compartmentalization a real estate transaction, either within one firm or one agent.

If "best interests" are defined solely as the seller receiving an extra thousand for their home or for the buyer spending a thousand less - if they are defined solely in monetary dollars, then perhaps the argument against dual agency holds water as a negotiated middle ground as determined by the buyer or seller often is the final settling place. But if "best interests" are viewed as more than just monetary, then the argument's not as cut and dry.

And before I continue, please keep in mind I'm not advocating for Dual Agency in every situation. But I'm also not advocating against it in every situation. To me, the circumstances dictate the appropriateness.

Last fall I took a listing from someone referred to me by a previous seller. He asked if I discount my commission (of course) and I gave him my stock reply - only in two circumstances. One, if you complete multiple transactions with me. And two, if I bring the buyer and represent both sides. In this instance, I already knew of a buyer looking for another townhouse in this particular area. He was interested in the latter option so I added it to the listing contract.

When it came to determining the listing price, I handed him the comps and he made a decision. We ended up with three offers within a day, one belonging to my buyer. All were for roughly the same price but the seller elected to go with my buyers' offer because his net would be higher. (And all was above board - in the Arizona Regional MLS we are required to disclose is there is a variable commission rate, such as in this case. This way, agents and their buyers know there may not be an even playing field if an offer from the listing agents' buyer comes through and can adjust their strategy accordingly.)

I actually would have made more leading my buyer to another property where I would have received a full 3% co-broke. But instead, looking at his desire to purchase a property and the sellers' desire to sell his with the least amount of stress and hassle, I spoke to both and made the match. The transaction went smoothly and all walked away happy.

So, did I serve the clients' best interest? If both of my clients say yes, and I'm certain they would to this day, where does an outside have cause to claim I did not? Those who say yes maintain the public needs to be shielded from such practices. I say educate them and let them choose, especially since more often than not their choice is apathy.

Sign calls are a normal part of this business. When I answer the phone, I represent the seller. I know this. In most cases (say, 98.763%) the caller knows this. And yet they call anyway. Based on what many of these callers tell me, they call multiple agents from their signs looking for information on the house. They may not know buyers' agency theoretically costs them nothing, but they do know they're calling the sellers' agent when they pick up the phone. Yet they do so time and time again. Ignorance? Probably not. Apathy? Almost certainly.

We as real-estate professionals have an obligation to the public at large to educate them about the business - there are any number of legally binding documents and guidance is needed. Where I think we run into the most problems is when we decide ourselves what the public as a whole should want - let the public decide what fits their needs and move on to the next hand-wringing subject:

Open houses.

(c) Jonathan Dalton, 2006 / Jonathan Dalton's Arizona Homes