No, the term “double ending” is not an alternate ending to a new spy novel. In a real estate transaction, typically one agent (broker) represents the seller and another represents the buyer. Each has a fiduciary duty to his or her client to essentially watch over the client’s money as if it were their own.
There are two scenarios to “dual agency” or “double ending”:
1. Buyers and sellers are typically represented by a broker (think: Coldwell Banker, Christie’s-Sereno, Compass, Keller-Williams, The Agency, etc.). The agent works for the broker and actually manages either the buy side of the transaction or the sell side. Sides are also called “ends,” as in “both ends.” If the same broker represents both buyer and seller (buyer and seller each having their separate agents who happen to work for the same broker), this is called “dual agency.” It’s allowed and happens quite frequently, usually without any complications. The fiduciary duty of both agents increases, but this can be a good thing.
2. When the same agent represents both buyer and seller in a transaction, it is also dual agency, but it is additionally referred to as “double ending.”
Q: How does double ending impact a transaction?
A: The listing agent will represent all the interests/negotiations/contracts/
disclosures, etc., for both the buyer and the seller. The listing agent will get paid for managing both the buy side and the sell side, essentially doubling their
pay.
Q: What are the disadvantages to double ending?
A: Real estate agents have a fiduciary duty to their clients. A buyer’s agent will try to help their client buy a house at the lowest possible price with the best terms for the buyer. A seller’s agent will try to maximize their client’s profits. When an agent represents both buyer and seller, this becomes a very difficult task.
Q: What are the advantages to double ending?
A: There are situations where a house might have been on the market for a long time and the listing agent may have done a great job promoting the house trying to find a buyer. If a buyer comes along who isn’t already working with another agent, with the seller’s permission, the listing agent might represent both buyer and seller. Oftentimes in a situation like this, listing agents will refer the buyer to another agent so that the buyer has their own independent representation. The listing agency might collect a referral fee in this case.
Q: Why do some buyers want to have the listing agent represent them in a transaction?
A: Unfortunately, some listing agents use this as a tactic to earn higher commissions. They will tell prospective buyers to work with them, suggesting that the buyer will have a better chance to win out in a multiple-offer situation and might even get a credit back from the listing agent (because the listing agent is getting paid twice, they are willing to give a portion of it back to the buyer). Many buyers feel as if this gives them an advantage. Unfortunately, their interests aren’t really being protected, as the listing agent just wants them to get into contract at any price so they get paid twice.
Q: Do sellers need to approve of their agent double-ending a transaction?
A: While dual agency is legal, sellers should always be consulted and approve.
Q: Do all agents double end?
A: No. Most agents don’t, except in unusual situations with full approval of their clients.
Q: What should I do if I am thinking about selling?
A: Have a frank talk with your agent to discuss the pros and cons of double ending and make a decision together.
Owen Halliday is a realtor who manages the Christie’s-Sereno office in downtown Los Altos. Call him at (650) 492-0062 or email [email protected].
