Yesterday I attended a class at the Victoria Real Estate Board about "Designated Agency". This is a pilot project beginning in our area in January 2012. Some provinces have already adopted this practice.
Agency defines the relationship between the Real Estate Agents and the offices they work at with their Buyers and Sellers.
Currently under the term “Brokerage Agency” a real estate office is either representing one party or if they have any agents in their office representing both the Buyer and Seller their relationship changes to “Limited Dual Agency”. This means that both parties consent to the office representing both interests. In order to do this the clients must agree that the office and their agents are to remain impartial to both clients, restricting their feedback. Under “Limited Dual Agency” the real estate office or their agents cannot discuss price, motivation or personal information for either client. This helps to level the playing field for negotiating.
In my opinion this is not a benefit to the client. I am not a strong supporter of Limited Dual Agency and because I specialize in representing Buyers I don’t find myself in this situation very often. Most of the time, the properties I sell are listed by other Agents and other offices.
Many people don’t realize that under the current system it does not matter if you are represented by different real estate agents, if they both work in the same office it is designated as Limited Dual Agency. The client always has the choice to choose whether they will enter into a Limited Dual Agency. There are times when I feel it can be a benefit, especially when the property is complex, sometimes the listing agent knows it best and it is an equal advantage to both parties.
The new agency relationship that begins in January 2012 is called “Designated Agency”. This allows clients to be represented by an individual agent rather than the entire office. So an agent representing the Buyer and an agent representing the Seller can both be from the same office but not form a Limited Dual Agency relationship. They will each represent their clients the same as if the other party was represented from a different office.
Anytime the same Agent is representing both the Buyer and Seller it still will continue to be considered Limited Dual Agency.
I have mixed feelings about the process. Many times this is exactly how agents have been acting already and this new system just puts validity to past practices. There are areas in the world where “Limited Dual Agency” is not a legal practice.
Here are my concerns over the new system. I can see in large offices this may just make sense. In many large offices with a hundred or more agents, the agents don’t even know each other or speak regularly. However, in smaller offices it will be very important that agents do not talk or even overheard talking about any deals or with/about their clients in any way that might influence a person’s negotiating ability. They must make sure that the contracts are well protected.
Overall I am in support of the “Designated Agency” because I actually think that the focus will ensure more caution to the release of information within smaller offices.
Designated Agency does not really have any impact on me because I am a one women show. I am either representing one side or both in any transaction. I prefer to represent only one party in a transaction. I enjoy negotiating for my clients and feel that is a great benefit I offer my clients. It doesn’t always mean getting rock bottom price, it means listening to what is important to my clients and helping make that happen. Each person has issues that are important to them and sometimes price is not the highest priority. Whatever their priorities I clearly communicate how things could possibly play out, the pros and cons of that and what it means in the overall picture. Having this kind of support helps my clients make the best decisions for themselves.
Please take some time to read some of my recent client’s comments under the “testimonials” section of my website. I hope to add yours there someday too.