Q: We have just signed a contract to purchase a house in Virginia, and settlement will take place within the next 90 days. The agent who assisted us in the negotiations is pushing to get a listing on our house. Although we want to sell our house as soon as possible, the sale of our house is not a condition to the purchase of the new one. We are troubled with having the agent represent us and wanted your advice on this issue. What do you recommend?
A: There's an old saying that "no one can serve two masters."
I have long been troubled with the real estate industry attempting to serve two masters. Let's face it! The real estate agent or broker in most cases is an agent for the seller. The seller pays the commission, if and when earned, and the agent is legally obligated to do the best possible job for the seller.
This agency theory holds true even if the real estate agent or broker was the one that introduced you, the buyer, to the property.
In the real estate business, you often find two categories of agents. The "listing agent" is the agent (or real estate broker) who has the original listing on the house for sale. The "selling broker" is the person who actually introduced the buyer to the property and often ends up doing more of the detail work to complete the transaction.
The selling broker often establishes a very close rapport with the purchaser. However, let there be no mistake about the law: Both agents are beholden to and must work for the seller.
Thus, when the real estate agent who assisted you in purchasing your Virginia house (in this case the selling broker) wants to turn around and get a listing from you, that agent is attempting to serve two masters.
What happens if a controversy develops between you and your seller? Will your agent take sides? And if so, which side? The potential for conflict of interest, in my opinion, is so apparent that you should avoid hiring that agent to work on your behalf.
After all, when you hire someone to work for you, you want and expect that they will totally dedicate themselves to your needs. If there is even a question of a conflict, it should be avoided.
The real estate industry should give a long, hard look at this problem, which they have created.