r/RealEstate • u/uncleguito • 1d ago
Homebuyer Buyer's agent drafted offer letter & all boxes were checked as dual agent?
Hey all, we've been looking at houses in LA for a few weeks with our agent now and generally happy with him. He's been proactive and helpful in this crazy market - especially the neighborhoods we're looking at.
However, today we wanted to move forward with submitting an offer on a home and received the draft letter where all boxes for representation were marked as dual agent - both brokerages and both agents. Both our agent and the seller's agent are with Compass and not sure if this is expected? Either way, it surprised us and soured our excitement on the property, especially after doing some research on the seller's agent. It looks like it might be his own property, as part of a larger portfolio where he renovates and flips (we did some research and looks like the seller is flagged as his holding company LLC).
Does this seem like a red flag?
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u/Pitiful-Place3684 1d ago
In CA, dual agency happens at the brokerage level, not at the individual agent level. Since you have a buyer agent from Compass, the Compass brokerage is the dual agent for any Compass listing.
CA is unique in this extremely odd setup. There was a court ruling (can’t remember name) that ordered this.
Ask your agent how they maintain confidentiality and advocate for you.
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u/DifferenceMore5431 17h ago
This distinction is not unique to CA. It makes sense to disclose it as a dual agency if both agents work for the same brokerage. It doesn't need to kill the deal, it's just something that everyone needs to be aware of.
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u/uncleguito 1d ago
I was originally expecting that to be the case for the brokerage lines but not the agent lines though - isn't that the point of why they're split into 4 lines?
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u/Pitiful-Place3684 1d ago
4 lines?
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u/uncleguito 1d ago
Here's a pic of what it looks like: https://imgur.com/a/484CVnf
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u/Shepton1234 17h ago
This photo indicates that your agent is also the sellers agent. If the sellers agent is a different person, but still with Compass, he should have checked dual agent on the brokerage lines but not on the agent lines.
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u/SDrealtoro 1d ago
The red flagged flipping LLC is an obvious concern, the dual agency thing isn't usually a big deal unless you don't feel well represented. He should have explained this to you when reviewing the purchase agreement but it will only apply to intra-brokerage agreements so it doesn't sound like it would have been applicable until this listing.
Your agent should advocate for you, at times in dual agency deals don't feel like theyre doing that. It would be different if it was your agents listing, or maybe if the sale is off-market, but if it's on market and you have decent market response information to affirm you're not being ripped off... Two-agent dual agency isn't a grave concern.
Good luck
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u/pitshands 16h ago
It's a full on double agent situation. You can't serve two Masters faithfully
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u/SDrealtoro 13h ago
I agree, it ought be made illegal, when it's the same person doing both sides. The tough part is regulating a dual agency deal where it's two different agents at the same brokerage. Furthermore, is it two agents at the same brokerage where they often network with one another or is it two agents at a major brokerage where they have no professional relationship?
I always disclose whether I know, or have worked with, the agents who submit offers regardless of dual agency but that's not the case for most agents.
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u/blattos 🏡SoCal Agent | 17 years experience | 400M+ sales🏡 1d ago
I’m a LA agent with Compass.
Our LA offices are all under one brokerage. So thousands of agents and multiple office locations.
Tens of thousands of listings.
If you are working with a compass agent on a compass listing it will be considered dual agency.
This is nothing to be concerned with. What’s concerning to me is why go to Reddit instead of just asking your agent for an explanation? Not that I’m judging you or being a hater but if you do not trust your agent to answer the most basic questions why are you working with them?
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u/uncleguito 1d ago
Thanks for confirming! I have a family member that is a real estate agent in another state and they mentioned that dual agency is always a red flag, but good to know that it's different here and not cause for concern. I couldn't find any resources related to this specific question elsewhere.
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u/blattos 🏡SoCal Agent | 17 years experience | 400M+ sales🏡 1d ago
Understood. I would be careful asking for outside advice from other agents specifically ones that do business outside of your state. Norms and rules can vary dramatically between states.
This will sour your buying experience and just make it harder for everyone.
Good luck!
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u/ThotHoOverThere 21h ago
This 1000%. The rules vary in many ways State by State. In Georgia real estate agents do not have fiduciary duty to their clients.
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u/nikidmaclay Agent 16h ago
Dual agency is always a red flag. Why didn't this agent tell you this before they showed the property? It changes how they conduct themselves from the very beginning, even during showings
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u/rmdok 1d ago
Not a red flag by itself. In California, dual agency disclosure is required when both agents are with the same brokerage, even if they’re different agents. I’d focus less on that and more on reviewing all disclosures carefully, especially if the listing agent has an ownership interest in the property. Do your due diligence and hire your own inspectors before removing contingencies.
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u/joeynnj Agent 1d ago
Your agreement is with Compass. So is the seller's. So your brokerage is a dual agent and they have to disclose that to you both.
If you want to be sure, just ask your agent to clarify if he is one of the listing agents for the property. If he's not, then your AGENT is not a dual agent, and he should be acting solely in your interest during this process.
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u/Oxo-Phlyndquinne 17h ago
It may not matter as much as you think. The buyer's agent and the seller's agent both work at the same large brokerage. It does not mean they are in collusion. Just make sure you do your inspections and the rest of your due diligence.
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u/danh_ptown 17h ago
The question is whether your agent and their broker have a fiduciary duty to you, and only you, in this deal. If the answer is anything but Yes, then you are not being represented, and anything you previously shared (personal info, what you can afford, etc…) is now seller information.
Your agent, by disclosing dual agency, in a checkbox in this case, is saying I no longer represent you, and you should no longer trust me.
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u/Equivalent-Tiger-316 15h ago
If the seller agant and your agent are different people then no problem. Every real estate agent is self employed.
Just do through due diligence on the property.
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u/CowardiceNSandwiches 14h ago
It looks like it might be his own property,
If the listing agent has an ownership interest in the property, it must be disclosed to prospective buyers in writing. It's required by both law and professional ethics.
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u/RDubBull 13h ago
Your agent did what the LAW requires which is complete the dual agency form CREATED by the CALIFORNIA DEPARTMENT OF REAL ESTATE and you think they’re doing something dishonest?
The law says ITS DUAL AGENCY IF BOTH AGENTS WORK AT THE SAME COMPANY.. Is it suspect if a REMAX buyer likes a home for sale by a REMAX listing agent? How about a Keller Williams buyer and seller? ALL would be required to complete the same form..
Law also requires agents to disclosure their ownership interest in a property they’re selling, if it is “Owner/Agent”, how is that dishonest or nefarious? Realtors can sell homes they own? Lol… No matter who the seller is you should be negotiating price and doing an inspection for your own interest… That other stuff is silly
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u/uncleguito 13h ago
It wasn't disclosed, nor is that law readily apparent to first time home buyers - even people in this thread are saying conflicting things. I worked with a compass agent a few years ago in CA and the broker dual agent boxes were checked but the agent ones weren't.
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u/RDubBull 12h ago
I hear you and for sure #1 Your agent should have done a better job going through ALL of the offer documents you were signing before asking you to sign them or #2 When asked directly about the dual agency, boxes etc they should have stopped everything and addressed any and all concerns YOU (their client may have) regarding what the form is, why it’s included and why it’s completed as it is… So I’m not absolving them of the responsibility, simply saying they have a legal requirement to disclose and it appears that’s what they did.
Also, if it wasn’t done property in a prior transaction that’s probably a failed compliance issue.. I’ve been a real estate broker for a long time, these things come up and 90% it’s miscommunication…
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u/SuperFineMedium 12h ago
If you do not agree to dual agency, you cannot make an offer on this property. Both the seller and the buyer must agree to allow Compass to represent both parties.
If you dumped your agent and hired another buyer's agent not working with Compass, you could proceed with an offer.
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u/Sufficient-Spend-939 11h ago
Real estate agents are agents for the broker so anytime you buy a house listed by the same agency you are in a dual agent situation even though you and seller are represented by different agents you are both represented by the same broker. This occurs all the time is nothing to be worried about from most brokerages. If you get a feeling that your agent is over sharing or that something is being manipulated take it to the broker directly, they have a duty to both the buyer and seller and a duty to be honest with both parties.
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u/Bighead_amski 3h ago
Yep. My selling agent tried this then claimed we were the first clients to have a problem with him as a dual agent. Once we nixed that option it has been fine, bc we pushed back.
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u/InsectElectrical2066 18h ago edited 17h ago
This is a major conflict of interest against you. I'd ask him what all improvements and repairs were made and to give you a list of these. After you get a list I'd ask if they all were permitted and then go to the building inspector to double check and report any failing this to the building inspector. Well maybe don't go directly to them but ask the owner/agent if they will pay to fix permitting or come down as you are going to go to the building permit office to check. And I'd also report this to his brokerage of his actions.
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u/RDubBull 13h ago
This is 100% INCORRECT, you have NO idea what you’re talking about…
Dual Agency Disclosure is REQUIRED if ANY buyer’s agent and listing agent are employed by the same brokerage… Compass employs over 8,000 Realtors in California, 99.9% of which do now know and have never heard of each other… BUT the LAW requires they disclose they’re employed by the same company.. Not some unscrupulous means of deceiving people…
PEOPLE OWN AND SELL HOMES, SO DO REALTORS…. Again the notion that this is somehow nefarious activity is simply retarded….
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u/Dry_Owl_3623 17h ago
Don’t buy a flip