Mr. Agunbiade has been a realtor for about 10 years now and he has quality experience working in this field. As a matter of fact, you can call him a citadel of knowledge when it comes to real estate agency and sourcing for properties to fit a client’s specification or negotiating on behalf of a seller who plans to sell a land or house. However, Mr. Agunbiade has not been very lucky financially working as a realtor. Right apart from closing very small deals which helps him sustain his body and soul, he has not been a part of any big deal which will turn his life around for good.
As the good lord will have it, Mr. Agunbiade’s godfather (Mr. Alex) who happens to be a developer just completed a very big building development project consisting of blocks of luxurious and fully furnished terrace duplexes at Ikoyi. Mr. Alex intimated Mr. Agunbiade and asked him to find a buyer for one of the units for a very big commission. This motivated Mr. Agunbiade and he went to work with immediate effect. He also got news about an expatriate (Mr. Bangladesh) newly coming into town and working for a multinational company. Mr. Bangladesh’s company was in search of a luxurious fully furnished duplex for him and Mr. Agunbiade was spot on. This was a great season of bountiful harvest for Mr. Agunbiade as he made so much profit. He was paid a percentage of the purchase price as commission by Mr. Alex and by the multinational company for his quality service. It took Mr. Agunbiade and his family just 1 month and some weeks to move into a beautiful house at Lekki Phase one and to buy a brand-new Lexus SUV. Indeed, he was the happiest man in this season. His hard work finally paid off.
Mr. Agunbiade’s joy was however short-lived because he got a distress call from the multinational company about four months later. There was a heavy storm which had destroyed Mr. Bangladesh’s house. The company was of the strong opinion that the materials used in building the terrace duplex especially the roof was of very low standard because the rain completely brought the roof down. The rain had destroyed all of the properties in the house and Mr. Bangladesh wants compensation for his belongings, especially his Persian rugs and quality sofas shipped in from Dubai. A meeting was summoned immediately between the company and Mr. Alex. They were to attend the meeting with their agents to negotiate who will bear costs for the damage incurred and to what tune. Mr. Agunbiade’s dilemma now is the party to represent. He is in a fix because he is the agent to the buyer, and he is also the agent to the developer who constructed the house. How did he get into this situation? Who will rescue Mr. Agunbiade?
From all indications Mr. Agunbiade is a dual agent for the purpose of this transaction. He is an agent to the multinational company and an agent to Mr. Alex. What is the implication of this? First off, it is important to know who a dual agent is. A dual agent is an agent who represents both the seller and the buyer in the same real estate transaction. Your next question will probably be, is that even allowed? Is it possible to represent both parties in a real estate transaction? Indeed, it is. However, an agent can only represent a buyer and seller in the same real estate transaction with their consent. This arrangement is beneficial to the agent because they receive a percentage of both sides of the transaction. Mr. Agunbiade’s story gives an insight into the bountiful profit a dual agent could make from one single transaction because such agent will be getting a percentage of the purchase sum agreed upon from the seller and buyer of a property. this seems like a win-win situation if you ask me. I mean, if you get consent from both parties, you can make double of what you should originally earn. There are however so many cons associated with being a dual agent. A dual agent is always neutral concerning any conflicting interests of the seller and buyer. An agent is supposed to represent a principal in every transaction and act in their best interest as it relates to that transaction. To do contrary to this will mean going against the rules of agency. When an agent now becomes neutral because he cannot take a side is where there is a big problem. It is always better and safer to represent just one party in any transaction. This way, you can clearly identify issues in a dispute between parties and seek solutions without fear or favor.
A dual agent cannot fully satisfy the duties of loyalty, full disclosure and obedience to lawful instruction. A double agent however still owes a duty of confidentiality of material information and accounting of funds. It is impossible to serve two masters in a real estate transaction sitting on the opposite sides of the table. it is also worthy of note that dual agency has been outlawed in many states in the U.S because of its excesses and issues it causes. Some of these states include Colorado, Oklahoma, Texas, Vermont etc. Also, an agent who intends to act on behalf of both parties must obtain a written consent separately from each party to the transaction.
There are very high risks in being a dual agent and the disadvantages outweigh the advantages. At best, a dual agent is entitled to double his compensation for a transaction. This benefit gotten might be used to pay legal fees for a court action pertaining to breach of fiduciary duties from either or both parties to a sale of land transaction. The time needed to get written consent from both parties before acting simultaneously on their behalf could be spent on acting as an agent to another client in a separate transaction which will yield profits as well. Lastly no one wants to end up like Mr. Agunbiade. Being in such a confused state is a truly bad one and it is best to avoid it.
