More About Dual Agency In Texas aka Intermediary

By rerockstar • January 6th, 2010

A bit of followup.

When I wrote my post about dual agency, “Dual Agency, Double Commission, and a Bad Idea For You.,” I was reacting to some of the posts I had been reading recently and wanted to give my opinions to my readers. This time, I’d like to discuss Texas’ version of dual agency which we call intermediary (a form of disclosed dual agency).

In the post, I discussed how I wouldn’t mess with dual agency (working with both buyer and seller on the same house), but did mention that I would work under intermediary within my own office. I thought I should explain what that meant a little more than I did in the post, so here’s the follow up.

Intermediary – Texas Disclosed Dual Agency

When you sign a listing agreement or a buyer’s representation agreement here in Texas, it is important to understand that you are signing it with the broker, not the agent. The agent is merely acting as the representative of the broker. In my case, you’d be signing up with Sheila Moran, broker of RE/MAX Access. I handle all the work, but she truly is the person you’re working with. Because of this broker-client relationship, all the agents in my office are also bringing buyers and sellers to the broker – so Sheila is broker to them all. Because of this, any inter-office sales (where one agent represents a seller and another represents the buyer), fall under the rules of dual agency (or intermediary).

What I won’t do.

As I said before, I don’t like dual agency. It creates a situation where I don’t think both parties are given the best – and I’m not here to give sub-par service. What I won’t do is also known as intermediary with no appointments. This means that both parties (buyer and seller) are represented by me in a limited capacity. I don’t think it’s fair to the clients and I don’t think it’s possible to truly keep the agent’s knowledge of both parties separated. Remember, when you’re my client, we work under the rules of confidentiality, but in the case of intermediary, you don’t want to tell me anything you wouldn’t want the other party to know. We don’t have that same bond. What if you told me you’d take $25,000 less for your property? Do I tell the other party? Do I pretend I didn’t hear you? Do I plug my ears and yell, “la la la la?” Do you see what a difficult position this is? Do you see how it doesn’t benefit anyone (other than my pocket)?

What I will do.

Keeping the broker-client relationship in mind, there is what’s called intermediary with appointments. Let’s say you’re a buyer looking to buy some land in Garden Ridge, Texas and you see my listing at 22003 Cristobal Drive. You are interested in the lot so you give me a call at (210) 646-HOME and you tell me you don’t currently have a Realtor®. I will show you the property, but I will explain to you that I represent the seller and that certain questions and answers are off limits based on my duty to the seller. If you decided the property isn’t for you, we can set up appointments to go look at other lots and I can become your Realtor® and fully represent you as a buyer. However, if you like the property, I would then advise you that we should work under intermediary with appointments. With appointments, the broker will appoint someone in our office to represent you (fully) as a buyer and that agent and I will refrain from discussing any details of the transaction. Under this form of dual agency, all parties are fully represented and no one collects double commission (although the broker would take a cut from two agents, as we pay the broker a percentage of our commissions). By being fully represented both clients win and as an agent, I can keep my peace of mind and my beliefs from being compromised. All I lose is a double commission – which to be honest, would be nice to get occasionally, but not at what I feel is a detrimental cost to my clients.

photo courtesy of half alive♦