is dual agency legal in maryland

by Noe Kassulke Published 3 years ago Updated 2 years ago

Dual agency regulations by state

State	Is dual agency legal?
Maine	Yes. Disclosed dual agency is legal with ...
Maryland	Technically yes, but Maryland defines du ...
Massachusetts	Yes, and agents are required to get writ ...
Michigan	Yes, and agents are required to get writ ...

30 more rows ...

Aug 20 2022

Dual agency is legal in MD, VA, & DC, but there are important distinctions in how it is defined. In Maryland, a single agent is prohibited from representing both the buyer and seller in the transaction. However, if both agents have the same Supervising or Managing Broker, the broker is deemed a Dual Agent.

Full Answer

Can a broker have dual agency in Maryland?

Understanding Dual Agency in Maryland. In Maryland, a single agent cannot represent both parties ( Buyer and Seller) - it's illegal. However, "Dual Agency" is permitted, but it is defined differently than in most other states. In Maryland "Dual Agency" applies to the status of the "Broker".

Can a single agent represent both parties in Maryland?

Understanding Dual Agency in Maryland In Maryland, a single agent cannot represent both parties ( Buyer and Seller) - it's illegal. However, "Dual Agency" is permitted, but it is defined differently than in most other states. In Maryland "Dual Agency" applies to the status of the "Broker".

Why is dual agency illegal in some states?

Dual agency is illegal in some states because if an agent represents both the buyer and seller, neither party's interest is fully served.

What is a dual agency in real estate?

The buyer is represented by the buyer agent, while the seller is represented by the seller agent or listing agent. Each agent has a duty to protect the interests of their own client and get them the best deal possible. In a dual agency, there is only one real estate agent that represents both sides, the buyer and the seller. What You Should Know

Is presumed agency allowed in Maryland?

In Maryland, presumed buyer agency extends only so far. Before an agent negotiates a purchase or presents an offer on behalf of his or her buyer, presumed buyer agency must be terminated, and the agent and the buyer must enter into a written brokerage agreement setting forth the nature of the agent's representation.

Can a buyer be unrepresented in Maryland?

The unrepresented buyer can work with the listing agent, who must offer what Maryland law calls “ministerial acts”. This means they owe the buyer fairness and good service. They help them put an offer together. But they don't represent the buyer.

Is dual agency a good idea for the seller?

To protect your finances and ensure you are selling or buying at the best possible price, it is probably best to avoid dual agency. Buyers or sellers may be inclined to work with a dual agent because they want to obtain confidential information about the person buying or selling the home.

Can a real estate agent represent both buyer and seller?

In other words, an agent cannot represent both buyer and seller, or both tenant and landlord in the same property transaction.

What happens if a buyer is unrepresented?

Legal problems. Going unrepresented and drafting your own offer has legal implications. Some buyers have lost deposits, or were taken to court for unintentionally failing to meet obligations they signed up for in the contract.

What is an unrepresented buyer?

Sometimes Buyers believe they can negotiate a better price if they don't use a Buyer's Agent also known as an unrepresented buyer. This strategy rarely works because of the way in which listing agreements are structured.

Why Dual agency is a bad idea?

The Drawbacks Of Dual Agency These include the following: Misaligned interests between the agent and the buyer. Because the agent commission is based on the sale price, a dual agent may not be inclined to help the buyer negotiate a better price. Misaligned interests between the agent and the seller.

Who benefits most from dual agency?

The seller typically pays both agents' commissions, so the seller is the one who can directly save money in this situation. But when the seller's costs are lower, they may be willing to accept a lower price from the buyer. The seller, buyer and agent could all benefit from the arrangement.

Can buyers and sellers talk to each other?

If the buyer and seller agree to something without adding an addendum to the contract, it is not binding in any way. Verbal agreements are technically legal, but they aren't enforceable. If you agree to something in conversation and one party doesn't follow through, there is no legal recourse.

How do you explain dual agency?

In a dual agency situation, the buyer and seller work with a single agent representing them both, instead of separate agents. Dual agency commonly occurs when the buyer and seller use the same brokerage.

What is the difference between dual agency and dual representation?

When you list a property with an agent you are listing your home with the broker and all of the brokerage's agents are working on your behalf and are bound to act in your best interest. Dual representation takes place when another agent from the same brokerage brings a buyer to purchase a home.

What is the difference between single agency and dual agency?

"Dual agency" refers to an agent that works with both the buyer and seller of a home. Two agents can work for the same broker on the same transaction, causing a dual agency situation. Single agency refers to an agent or real estate broker that works with only one party in a real estate transaction.

Is dual agency unethical?

Is dual agency ethical? Dual agency is illegal in every fiduciary profession other than real estate (state laws allowing) because of the risks it creates. Therefore many folks outside and within the real estate industry view it as unethical.

Why is dual agency problematic quizlet?

Why is dual agency problematic? It makes it difficult for the agent to uphold their fiduciary responsibility to both parties. It can occur without the agent realizing it. If both parties are not made aware of it being in effect, then it is always illegal.

Which of the following statements is true regarding dual agency?

Which of the following statements is TRUE regarding dual agency? Dual agency limits the level of representation that can be offered by the licensee and also prohibits the licensee from acting exclusively for either party.

What happens if dual agency is undisclosed?

A dual agency may be created unintentionally, which may have severe consequences for the real estate broker and others. If the dual agency is neither disclosed to nor approved by both parties to the transaction, undisclosed dual agent cannot recover any compensation, and a principal can rescind the transaction.

What is the role of a dual agent in real estate?

As a real estate agent, one of my duties when working with clients is to explain agency law - who represents who in a transaction. Buyers are represented by Buyer Agents and Sellers are represented by Listing Agents. Dual agents, however, ‘try’ and represent both the Buyer and the Seller in a transaction. I say ‘try’ because I don’t believe there is any way you can truly represent the interests of both parties.

What is the duty of an agent?

An agent owes their client a fiduciary duty - the highest standard of care.

What does "try" mean in real estate?

Dual agents, however, ‘try’ and represent both the Buyer and the Seller in a transaction. I say ‘try’ because I don’t believe there is any way you can truly represent the interests of both parties. Most people recognize the benefits of having a real estate agent on their side in a transaction.

Why would an agent act as a dual agent?

Why would an agent act as a dual agent? Simple, because they want to collect both sides of the commission.

What did Rick learn early in his real estate career?

Rick learned early in his real estate career to pick a niche and become an expert in that area. Condos were a natural choice and he has been helping condo buyers and sellers ever since.

Why do people need a real estate agent?

And most people only buy or sell a home several times in their lifetime. With an agent on your side, you have someone fighting for your interests, negotiating for you and protecting you from situations that can be detrimental to your interests.

Can you be a dual agent in DC?

In DC and Virginia, it is legal for one agent to act as a Dual Agent and represent both parties. In DC & Virginia, if two agents have the same Managing Broker, the agents are considered Designated Agents. In all cases, both parties must consent, in writing, to agree to dual agency. You can consent to dual agency when you start working ...

What is dual agent closing?

Faster Closings - A dual agent knows the exact demands of both the buyer and seller, where there is room for negotiation and what aspects of the deal are off-limits. This and more efficient communication leads to a real estate transaction closing faster than it would have been with two real estate agents.

How many agents represent the buyer and seller?

In the typical real estate transaction, the buyer and the seller are represented by two different real estate agents. The buyer is represented by the buyer agent, while the seller is represented by the seller agent or listing agent. Each agent has a duty to protect the interests of their own client and get them the best deal possible. In a dual agency, there is only one real estate agent that represents both sides, the buyer and the seller.

What is dual agency?

A dual agency is when a real estate agent represents both the buyer and the seller in a real estate transaction. In this scenario, the real estate agent would have to protect the interests of both parties. You can see how there can be a conflict of interest in this situation. The buyer wants to pay the lowest price possible for the house, while the seller will want to sell it at the highest price possible.

How to avoid confusion with real estate agent?

To avoid the confusion of the relationship the agent has with you and the other party, ask your real estate agent for a disclosure agreement. Make sure to ask questions about anything that you do not understand on the agent’s disclosure to feel more confident about the relationship the real estate agent has with all the parties involved in the transaction and the support you will receive from them throughout the home buying process.

What is the benefit of dual agent?

Reduced Commission - This might be one of the main benefits of dual agency. Since one real estate agent is representing both sides, they do not have to split the commission with someone else. This means that the dual agent would receive the whole commission. In this case, dual agents are more willing to give discounts on their commission. For example, instead of the 6% standard commission, a dual agent may accept 5%.

Can a real estate agent give advice?

No agent advice - When handling a real estate transaction as a dual agent, the agent needs to be neutral to both parties. Since the buyer and seller have competing interests, the representing agent cannot provide advice or take sides. This means that you would not be able to get the typical support from your real estate agent, as you would if there were two separate real estate agents in the transaction.

Can a buyer and seller work for the same brokerage?

Therefore, if you refuse to work with a seller/buyer whose agent works for the same brokerage as your agent, you would be missing out on a portion of the market that you would otherwise have access to.

What is a dual agent in MD?

In MD, the Broker and the intra-company agents for the same transaction are all dual agents. The intra-company agents are an extension of the broker. As a dual agent, broker and intra-company agents are not exclusively loyal to either the buyer or the seller. Although the intra-company agents have dual agent status through the broker, they cannot exchange confidential information about the buyer or the seller. The intra-company agents are able to perform their duties (i.e. negotiation of contracts, price, etc.) as if an exclusive agent for their client.

What is the same real estate agent?

Same real estate agent has an agency agreement for both the buyer and the seller of the same transaction.

What is an intra company agent?

Intra-Company Agent – a licensed real estate broker, licensed associate real estate broker, or licensed real estate salesperson who is designated by the real estate broker who the associate real estate broker or real estate salesperson is affiliated with to act as a dual agent on behalf of a seller or buyer in the purchaser or sale of real estate that is listed with that real estate broker.

What does "presumed buyer agent" mean?

Presumed Buyer’s Agent (no written agreement) – a licensed real estate broker, licensed associate real estate broker, or licensed real estate salesperson who has a relationship with a buyer but no written contract, is presumed to be representing a buyer.

What is a buyer agent?

Buyer’s Agent (written agreement) – a licensed real estate broker, licensed associate real estate broker, or licensed real estate salesperson who has entered into a written contract and represents a prospective buyer in the acquisition of real estate for sale.

Can a DC real estate broker be a dual agent?

Also in DC, the broker can designate individual licensed real estate agents that operate just like the intra-company agents operate in MD. The difference is that in DC, if the broker designates agents from within the company–one to the seller and one to the buyer – then the only dual agent is the broker. The designated agents are not dual agents and can exclusively represent their respective clients. (Remember, designated agents cannot share confidential information regarding their clients.)

Can a person be a dual agent in DC?

In DC, an individual licensed real estate person can be a dual agent. That individual must maintain the confidentiality of each client. In reality, the individual dual agent acts as a facilitator/mediator for that transaction.

Is dual agency illegal in some states?

The rarity of dual agency isn’t accidental—dual agency is illegal in some states. In the U.S., the following states prohibit dual agency :

Is dual agency a good idea for you?

Whether a realtor is exclusive or operating as a dual agent, they are bound in both cases by certain fiduciary responsibilities. To understand whether a dual agent is right for you, interview them and ask yourself if their process and abilities fall within the parameters of these guidelines:

What is dual agency?

Dual agency describes a situation in which a real estate agent represents both the buyer and the seller of a home. It’s a rare occurrence and usually happens if an interested buyer contacts a real estate agent who also represents the seller of a particular property. In an ideal scenario, the agent is able to balance the best interests ...

What is the most important aspect of a client/broker relationship?

In any home sale, the most important aspect of a client/broker relationship is trust. Consider the benefits and risks of dual agency and weigh them carefully against your personal and financial priorities.

What is disclosure in accounting?

Confidentiality of your personal information, unless given permission to share it. Accounting and reporting of all documents and funds included in the transaction.

Can a real estate agent advise a buyer to accept a lower offer?

The typical support a client receives from a real estate agent is far removed in the dual agency scenario. To represent both sides fairly, the agent cannot advise the seller to accept a lower offer, for example, or advise the buyer that the neighborhood competition means the seller might accept that lower offer.

Is dual agency a scam?

If you research dual agency, you’re likely to come across terms like “scam” and “trap.”. Consumer Advocates in American Real Estate (CAARE), a nonprofit specializing in consumer protection in residential brokerage, characterized the practice as “abandonment.” “It is illegal in every other fiduciary profession except under ...

What is dual agency?

Dual agency describes a situation in which the same real estate agent represents both the buyer and the seller. This creates ethical issues, and the agent's own interests could end up taking priority.

Why is it important to remember that the agent has interests?

And it's important to remember that the agent has interests, too. Maximizing their commission and minimizing time the house is on the market so they can move on to the next transaction benefits their bottom line, not yours. And both are easier when there’s only one agent involved.

How many states prohibit dual agency?

Eight states prohibit dual agency. But understanding the responsibilities of an agent in a home sale can still get murky. A 2020 report by the Consumer Federation of America found that states use more than fifty different terms to describe the role an agent must play in a real estate transaction. Knowing what that role is assumes that you not only get the real estate agent disclosure form in a timely manner, but that you also read and understand it. Since the forms are often packed with jargon and legalese, that's no easy feat.

Why do you need a dual agent when selling a house?

When you're selling a house, you might be tempted to allow dual agency in order to speed up the transaction. After all, if you're working with a single person, there's no waiting time while your listing agent communicates with the buyer's agent. A listing agent may also tempt you by offering a reduced commission — say 5% of the sale price instead of 6% — since without a buyer's agent, they get to keep the entire fee.

What does a listing agent do?

But the listing agent's primary role is to get the best price for the seller, not the best deal for the buyer. If the agent isn't acting solely on your behalf, you can't be sure your interests will be the top priority in the transaction.

What do you expect from your agent when you buy a house?

For example, if you're buying a house, you expect your agent to negotiate on your behalf to get your offer accepted on the terms you want. As a seller, you assume your agent will get you the best possible offer for your property on your terms.

What to do when you're ready to commit to a real estate agent?

If you're ready to commit to a real estate agent, ask to see (and sign) an agent's disclosure. Even if you're in a state where agents aren't legally required to give you this document until pretty late in the game, there's no reason you can't review it sooner.

What is dual agent in Maryland?

In Maryland "Dual Agency" applies to the status of the "Broker". Dual Agency can only occur when a listing agent and a buyer's agent, who both work for the same broker, become involved in a single transaction together. The Broker becomes the "dual agent".

What happens when a dual agency transaction occurs?

In a transaction when a Dual Agency situation occurs, each agent still represents their client in the same capacity as in any other transaction.

Is Betty Buffington a dual agent?

If a buyer's agent working for Betty Buffington, presented a contract on Ann's listing, both agents would now be classified as "Intra-Company agents. Betty would become a the Dual Agent, since both agents are working under her Broker's license.

Is a broker a dual agent?

The Broker becomes the "dual agent". The seller is still represented by the same seller's agent, and the purchaser is still represented by the same buyer's agent. Although neither of the agent's relationships with their clients change, in a dual agency arrangement, they are now formally classified as "Intra-Company Agents".