Michelle Millikin

Archive for the ‘Buying Process 101’ Category

What is Multiple Representation and Designated Agency?

When working with a Realtor, the agent has a duty to explain the difference of agency and allow you to make an educated decision as to what is suitable for you. Beyond sub agency and buyers agency (see last week’s blog), there are also other agency choices such as Multiple Representation and Designated Agency.

Multiple Representation:

Many think that this type of agency is related to the particular agent who has a listing contract on a house in which a buyer under contract for buyers agency with the same agent wants to buy. Not true. Multiple Representation exists when a real estate company holds both the listing contract and a buyers agency contract; either with the same agent or different agents.

In a company like Realty Executives of Wausau, our agents often sell each other’s listings so this scenario can be quite common. So what are the rights of the clients when some believe there to be an inherent conflict of interest?

1. Multiple Representation with Designated Agency
In this relationship the company’s two agents are given the right (in writing, agreed upon by both clients) to provide full negotiation services to their respective client. Each designated agent may provide advice and opinions to assist their client, even if that advice or opinions favor the interests of their client over the company’s other client. The clients may withdraw their consent to this representation at any time. If the clients are both under contract with the same agent, the Broker must designate another agent to represent the interests of one of the clients.

2. Multiple Representation without Designated Agency
Same scenario: One real estate agent or company represents both the buyer and seller as clients in the same transaction. Without designated agency described above, the company and its agents represent both clients but cannot put the interests of one client over the other. Because the buyer and seller will likely have opposing interests in the transaction, it is impossible for the agents to provide the fullest level of client services to both. This representation resembles a “middleman.” They will draft and present offers as directed but may not provide either party with advice as to how to gain advantage over the other.

Most importantly, both parties must agree to the multiple representation with designated agency in writing for the current transaction. If one party does not agree, the transaction automatically defaults to multiple representation without designated agency.