Beyond Bending Tell You How
When it comes to buying or selling a property, you might have heard the term “general agency” being thrown around. But what does it mean, exactly? In a nutshell, general agency refers to a type of real estate agency where the agent represents both the buyer and seller in a transaction. This is different from other types of agencies, such as buyer’s agency or seller’s agency, where the agent only represents one side of the transaction.
General agency can be beneficial for both parties in certain situations, but it’s important to understand the nuances of how it works and what to expect if you decide to go this route. In this post, we’ll dive into the details of general agency real estate, including its pros and cons, how it differs from other types of agencies, and what to look for in a good general agent.
How Does General Agency Real Estate Work?
As we mentioned, general agency means that the agent represents both the buyer and seller in a real estate transaction. This can happen in a couple of different ways:
- Dual agency: In this scenario, the same agent represents both the buyer and seller. This can happen when the buyer and seller are both working with the same real estate brokerage, and the agent is assigned to represent both parties. Alternatively, a buyer or seller could approach an agent directly and ask them to represent both sides.
- Designated agency: In this scenario, the brokerage has separate agents representing the buyer and seller, but one agent is designated to work with both parties. This is often done to avoid conflicts of interest, as each agent can focus solely on their client’s interests.
Regardless of which type of general agency is used, the agent has a fiduciary duty to both parties. This means that they must act in the best interests of both the buyer and seller, and cannot favor one side over the other.
Pros and Cons of General Agency Real Estate
Like any type of real estate agency, general agency has its pros and cons. Here are a few things to keep in mind:
Pros
- Convenience: Working with a general agent can be convenient for both the buyer and seller, as they only have to deal with one agent instead of multiple.
- Faster transactions: Because the agent is working with both parties, it can be easier to negotiate and come to an agreement quickly.
- Lower costs: In some cases, working with a general agent can be less expensive than hiring separate agents for both the buyer and seller.
Cons
- Potential conflicts of interest: Because the agent is representing both parties, there is the potential for conflicts of interest to arise. For example, the agent may be hesitant to negotiate too hard on behalf of one party if it could jeopardize the deal.
- Less specialized expertise: Because the agent is working with both the buyer and seller, they may not have as much specialized knowledge or expertise in one area (such as working exclusively with buyers or sellers).
- Less personalized attention: Because the agent is working with two parties, they may not be able to provide the same level of personalized attention to each party as they would if they were only representing one side.
How Does General Agency Differ from Other Types of Real Estate Agencies?
As we mentioned earlier, general agency is just one type of real estate agency. Here’s how it differs from other types:
Buyer’s Agency
In a buyer’s agency, the agent works exclusively with the buyer and has a fiduciary duty to act in their best interests. This means that the agent will help the buyer find properties that meet their needs, negotiate on their behalf, and provide advice throughout the buying process.
Seller’s Agency
In a seller’s agency, the agent works exclusively with the seller and has a fiduciary duty to act in their best interests. This means that the agent will help the seller market their property, negotiate on their behalf, and provide advice throughout the selling process.
Transaction Brokerage
In a transaction brokerage, the agent does not represent either the buyer or seller exclusively. Instead, they act as a facilitator for the transaction and assist both parties with paperwork, negotiations, and other aspects of the process. However, they do not have a fiduciary duty to either party and cannot provide advice or representation.
What to Look for in a Good General Agent
If you’re considering working with a general agent, there are a few things to keep in mind when choosing an agent:
- Experience: Look for an agent who has experience working with both buyers and sellers, as well as experience in your specific market.
- Communication: Make sure the agent is responsive and communicates clearly with both parties throughout the process.
- Objectivity: Look for an agent who can remain objective and avoid conflicts of interest, even when representing both parties.
- Negotiation skills: A good general agent should be skilled at negotiating on behalf of both parties and finding solutions that work for everyone.
Conclusion
General agency real estate can be a good option in certain situations, but it’s important to understand how it works and what to expect before choosing this type of agency. By keeping the pros and cons in mind, understanding how general agency differs from other types of agencies, and choosing a good agent, you can ensure a successful transaction that works for everyone involved.
People Also Ask:
What is the difference between general agency and transaction brokerage?
The main difference between general agency and transaction brokerage is that in general agency, the agent represents both the buyer and seller, while in transaction brokerage, the agent does not represent either party exclusively. Instead, they act as a facilitator for the transaction and assist both parties with paperwork, negotiations, and other aspects of the process. However, they do not have a fiduciary duty to either party and cannot provide advice or representation.
Is general agency real estate legal?
Yes, general agency real estate is legal in most states. However, it’s important to check the laws in your specific state to ensure that you are following all regulations and requirements.
Can a general agent represent both parties in a real estate transaction?
Yes, a general agent can represent both the buyer and seller in a real estate transaction. This can happen in a couple of different ways, such as through dual agency or designated agency. However, it’s important to be aware of the potential conflicts of interest and other drawbacks of this type of agency.
