Podcast

Dual Agency: Who’s Really On Your Side? Insights from AI and Fred Glick of Arrivva

Fred Glick, a Broker, Real Estate Realist, and Founder of Arrivva, holds a stellar track record with over $2 billion in residential transactions while grounded in a lifelong passion for real estate. Listen closely as Fred Glick gives you real estate hacks and tips through Arrivva’s AI Podcasters in the weekly We Fixed Real Estate podcast.

Arrivva is a comprehensive real estate and mortgage brokerage, catering to qualified motivated buyers, sellers, and mortgagees committed to brokering with love, integrity, knowledge, a well-defined plan, and a transparent flat fee structure. As featured in the Wall Street Journal, Arrivva leads the way in transforming the future of real estate, one happy client at a time.

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Here’s a glimpse of what you’ll learn: 

  • Explore the complexities of dual agency, where one agent represents both the buyer and seller
  • Uncover the ethical challenges and potential conflicts of interest that can compromise your homebuying or selling experience
  • Dive deep into the critical role of fiduciary duty, and why it’s essential for protecting transparency and trust in real estate
  • Learn why this controversial practice of dual agency persists and how it could affect sellers and buyers
  • Is off-market selling really in your best interest? We discuss the Clear Cooperation Policy, its push for transparency, and why some brokerages resist

In this episode with Fred Glick

Fred Glick of Arrivva introduces an engaging discussion on some of real estate’s most controversial topics. Listen as Arrivva’s AI-driven podcasters explore the complexities of dual agency and the National Association of Realtors’ Clear Cooperation Policy.

Can one real estate agent truly serve both buyer and seller without conflict? What are the ethical pitfalls, and how does it affect transparency? This We Fixed Real Estate episode breaks it all down, offering insights and legal cases highlighting the real-world consequences. Whether you’re homebuying or home selling, uncover what dual agency means for your bottom line.

Resources mentioned in this episode

EPISODE TRANSCRIPT

[00:00:00] Drew Thomas Hendricks: Today on We Fixed Real Estate. We have a very special episode for you. There’s a new AI tool out here that Google released just about last week called NotebookLM, where you can feed it a document, any kind of piece of knowledge, even a website, and then it’ll generate a dialogue.

Very similar to a top-notch podcast between two hosts that debate and dialogue about the issue. So Fred and I had this idea that we were going to kind of incorporate it as a way to kind of educate you guys as listeners and actually bring to light some of these issues we’ve been talking about on the show, Fred, why don’t you explain what’s about to happen here?

[00:00:35] Fred Glick: Yeah, hi. This thing is fabulous. I would tell everybody to try it. What we’re able to do is take a macro or a microtopic throw it in there and have it produce this thing. And I did one because the big buzzword this week in real estate is something called clear cooperation. And after all the NAR lawsuits and all that kind of stuff, and by the way, the NAR lawsuit isn’t approved by the judge yet, not until November.

So these bunch of agents are screaming that they don’t like clear cooperation. And so I’m not going to explain it to you, but I’m going to let you hear for, I think it’s about 12 minutes, a dialogue about that and something called dual agency. So, dual agency means one person or one company represents both sides of a real estate transaction.

I’m not saying another word. I’m gonna let our one male and one female podcasters, I guess, AI podcasters, what do we call these?

[00:01:43] Drew Thomas Hendricks: I would say that term is going to come soon, right? But right now let’s just call them our AI podcasters.

[00:01:53] Fred Glick: AI podcasters. Okay. There we go. So enjoy. We’re not going to come back afterwards because, you know, you probably had enough after you thought about it, but it’s interesting.

We’re coming out with another one. I’m taking the entire National Association of Realtor agreements that they made with the plaintiffs. And I’m going to put that up and put that into a podcast and that’ll be the next one. So let us know if there’s anything you really want to know. And we’ll, we’ll nuance it.

The other thing I’m going to do is, like, I had a conversation with somebody today about mortgages. That it didn’t work out. I told him not to refi and I want other people to learn from this. So that’s my next venture of throwing that in. So going forward, it should just be a blast. So enjoy.

[00:02:41] Podcaster 1: Ever find yourself wondering like whose side your real estate agent is really on? You know, when you’re buying a house and you get that feeling like, hold on a sec. Is this agent a little too friendly with the seller? Well, today we’re going deep diving into that very question as we explore dual agency in real estate and why some experts say it’s a minefield. Yeah. You heard that right. Especially if you’re selling.

[00:03:05] Podcaster 2: Dual agency. Well, it’s when a single real estate agent or even their brokerage represents both the buyer and the seller, and it’s for the same transaction. Sounds kind of simple, right? Maybe even efficient, but here’s the catch. It creates this whole web of ethical and legal issues and a lot of that blows down to this thing called fiduciary duty.

[00:03:26] Podcaster 1: Fiduciary duty. Yeah. Okay, let’s break that down because it sounds like it’s at the heart of why this whole dual-agency thing can be so complicated.

[00:03:32] Podcaster 2: You got it. Fiduciary duty, basically means that an agent legally has to act in the best interest of their client. Think of it like this. Let’s say your best friend is a financial advisor, right?

And they’re managing investments for both you and your sibling. Could they really give both of you totally unbiased advice? Especially if your financial goals are different. You see, there’s this inherent conflict there.

[00:03:55] Podcaster 1: It’d be like asking your best friend to negotiate their own salary with you.

[00:03:59] Podcaster 2: Awkward.

[00:04:00] Podcaster 1: So how does all of this play out in the world of real estate?

[00:04:04] Podcaster 2: In real estate, this fiduciary duty, it includes things like loyalty, being completely open about important facts, and keeping certain information confidential. But when you have an agent representing both sides, they’re walking a tightrope, trying to please two masters, you know, it becomes almost impossible to truly advocate for both the buyer and the seller.

Without having to compromise somewhere. And it’s not about whether their intentions are good or bad. It’s about this inherent conflict that’s just built into the situation itself.

[00:04:33] Podcaster 1: And these conflicts, they can have some very real consequences, right? We’re not talking about hypotheticals here. There have been court cases that really highlight how messy dual agency can get.

[00:04:42] Podcaster 2: Oh, absolutely. There have been legal cases that show that even when there’s full disclosure about the dual agency and both sides agree to it, the risks are still there. They don’t just vanish. One case, for example, involved an agent who didn’t disclose something really important about the size of a property to the buyer.

Guess where that ended up? You guessed it in court. And the judge made it crystal clear. Agents have to be upfront with both sides, even in a dual agency situation.

[00:05:07] Podcaster 1: So even if dual agency is legal where you live, it doesn’t give anyone a free pass. You know, these cases, what they really highlight is just how important it is for you, whether you’re the buyer or the seller to be aware of all the potential downsides of dual agency because you could find yourself in a situation where your agent, well, they’re not really working in your best interest, and that can cost you time, money, and your peace of mind. So we’ve talked about all the risks that come with dual agency, but here’s the thing. It’s still legal in a lot of places. So why is that? And why would anyone choose to go this route knowing how risky it can be?

[00:05:41] Podcaster 2: You’ve hit on a very important point. Awareness about dual agency is definitely growing, but it’s still legal in many areas, yeah. And they often have rules like making disclosure mandatory. But as we’ve said, disclosure doesn’t just erase the conflict of interest, you know. It’s almost like saying, we’re going to blindfold the referee, but hey, don’t worry, the boxing match will still be fair.

[00:06:02] Podcaster 1: Right. It’s not like knowing there’s a conflict magically makes it okay.

[00:06:05] Podcaster 2: Yeah.

[00:06:06] Podcaster 1: So why is dual agency still a thing?

[00:06:07] Podcaster 2: Well, part of it goes back to how real estate has always been done. You see, before we had online listings, pocket listings used to be a lot more common. These were properties that were marketed very discreetly and that often led to, well, you guessed it, dual agency.

Now imagine you’re selling your home. It’s very tempting to think, “Hey, maybe I could get a better deal if we keep everything quiet and my agent just finds a buyer directly.” But that’s where things get a little, shall we say, murky.

[00:06:36] Podcaster 1: It sounds like a system that’s just begging for some, let’s call them less than transparent dealings.

No wonder people want to change things.

[00:06:43] Podcaster 2: Exactly. In recent years, there’s been this big push for more transparency in real estate. And this brings us to the National Association of Realtors, you know, NAR. They have this thing called the clear cooperation policy. It started back in 2020 and the goal is to shed some light on these shady, I mean, pocket listings we’ve been talking about.

[00:07:01] Podcaster 1: Okay. So more transparency, huh? Sounds good in theory, but how does this policy actually work? What does it do?

[00:07:08] Podcaster 2: So the clear cooperation policy. Basically says that if you’re marketing a property, it’s got to be listed on the MLS. That’s the multiple listing service, and it’s got to be listed within one business day.

This is the platform that most buyers use to find homes, and it’s how agents share info about what’s available. So by making these listings available to everyone, the policy tries to make sure that sellers are getting the most exposure for their properties, and it reduces the need for agents to steer their clients towards dual agency.

Makes sense, right?

[00:07:38] Podcaster 1: So it’s like, level the playing field, make sure everyone has access to the same info. Seems fair. But I’m guessing not everyone was exactly thrilled about this.

[00:07:46] Podcaster 2: You’re right. There’s been pushback, especially from some of the bigger brokerages, you know. They argue that some sellers, well, they prefer to do these off market deals, and that forcing everything out in the open, so to speak, is limiting their options.

But here’s the thing. Resisting this transparency, it usually translates to more dual agency happening. And as we know, that’s not always the best for the seller.

[00:08:08] Podcaster 1: It seems counterintuitive, doesn’t it? I mean, are they really putting the seller’s best interests first by being so against transparency? After all, if there’s wider exposure, wouldn’t that mean potentially more buyers, and wouldn’t that mean a higher final sale price?

[00:08:21] Podcaster 2: That’s the real question, isn’t it? By sticking with this system that allows for dual agency, are these companies, are they really putting their clients first or their own interests? It’s definitely something that sellers should think about very carefully when they’re choosing an agent or a brokerage.

Transparency is key in real estate transactions. Remember that.

[00:08:41] Podcaster 1: So, what you’re saying is, if an agent’s pushing hard for an off market deal, or seems hesitant about listing a property publicly, that’s a big red flag.

[00:08:49] Podcaster 2: Exactly. You have to be aware of these tactics, right? And understand the risk involved. Now, you might be wondering why anyone, like a buyer, for example, would still choose dual agency.

[00:08:59] Podcaster 1: Yeah. After learning about all of this. Why would anyone go down that road?

[00:09:03] Podcaster 2: Well, sometimes it’s presented as a way to make the whole process easier. A buyer might think, well, I like this place, and I get along with the agent who showed it to me, so why not just stick with them? And on the surface, it sounds simpler, right?

But in reality, it’s a bit like asking the other team’s coach to help you come up with a game plan during halftime.

[00:09:21] Podcaster 1: Wow, you’re telling me. I would not want the other team to have my playbook.

[00:09:26] Podcaster 2: Oh!

[00:09:26] Podcaster 1: So. For anyone listening, maybe they’re just about to jump into the real estate game, especially if they’re thinking of selling.

What’s the biggest takeaway? What do they need to remember about dual agency?

[00:09:36] Podcaster 2: For sellers, it really boils down to this. Even though it might seem more convenient, going with dual agency actually puts you at a disadvantage right from the start. Think about it. You’re basically agreeing to have your agent represent you.

And the person who’s trying to buy your house. At the same time, imagine you’re trying to get a raise, but your boss is sitting right there representing the company’s budget at the same time. It’s not exactly sound like a recipe for success, does it?

[00:10:05] Podcaster 1: No, not really. It’s like agreeing to arm wrestle someone with your dominant hand tied behind your back.

You might put up a fight. But the odds aren’t exactly in your favor.

[00:10:15] Podcaster 2: You got it. You’re basically surrendering a huge advantage right off the bat. Now, you might be thinking, “Okay, but what about the buyer? They must be getting a great deal with dual agency, right?” Well, not necessarily.

[00:10:24] Podcaster 1: It’s not a win-win. It’s more like a lose-lose situation.

[00:10:27] Podcaster 2: In many ways, yeah. While a buyer in a dual agency situation might think they’re getting a steal, the reality is different. They’re often missing out on the kind of guidance and support that a dedicated agent can provide. See, they might not end up with the best possible deal because their agent isn’t working as hard for them as they would if they were the only client.

[00:10:47] Podcaster 1: Sounds like that old saying is right. If it sounds too good to be true, it probably is. So for our listeners out there who might be thinking about dipping their toes into these dual agency waters, what’s your advice to them?

[00:10:59] Podcaster 2: Especially for sellers, my advice is pretty straightforward. Be very wary of any agent or brokerage that even brings up dual agency.

Sure, it might seem like a simpler, more streamlined way to do things, but the truth is it usually benefits the agent more than it benefits either the buyer or the seller. Remember, when it’s dual agency, the agent gets their commission twice. So there’s this built in incentive for them to get the deal done as quickly as possible, even if that means you, the seller, end up losing money.

[00:11:28] Podcaster 1: So basically, they’re motivated to finalize the sale, but not necessarily to get the seller the best price. Subtle, but important difference.

[00:11:36] Podcaster 2: Exactly. That’s why it’s so important, especially for sellers, to be aware of how this all works, and to look for an agent who is 100 percent committed to representing only them.

[00:11:45] Podcaster 1: Knowledge is power, right? The more you know about dual agency and how it works, the better you can advocate for yourself. And you’ll be in a much better position to get the best possible outcome when you’re buying or selling.

[00:11:56] Podcaster 2: That’s right. And don’t hesitate to ask your agent directly what their position is on dual agency.

Do your homework, shop around, look at different brokerages, and never be afraid to walk away if something doesn’t feel right. You have the power.

[00:12:10] Podcaster 1: Fantastic advice. Well, that about wraps up our deep dive into the wild world of dual agency. We hope you learned something new today. And that this information will give you the confidence you need to navigate your next real estate transaction. Because knowledge is power, especially when you’re buying or selling a home.

[00:12:25] Podcaster 2: And here’s something else to think about. Something to chew on. How might technology change how we buy and sell homes in the future? Could it actually lead to a system that’s more transparent and fair for everyone involved?

Something to ponder.

[00:12:39] Podcaster 1: That is a fantastic question and a great note to leave our listeners with. Until next time, everyone. Stay informed, always ask questions, and don’t forget to read the fine print.

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