If you’re selling your home and the potential buyers want to use the same real estate professional to represent them, is that allowed? The answer is yes. This situation is called transaction brokerage, where the same real estate professional represents both the buyer and the seller in a transaction.
What is Transaction Brokerage?
Transaction brokerage is a service option where a real estate professional works with both the buyer and the seller. In this arrangement, the real estate professional acts as a neutral facilitator rather than advocating for the interests of either party. Transaction brokerage is available when a buyer wants to purchase a property that you are selling, or when you’re interested in buying a property and the seller is represented by the same real estate professional.
Responsibilities of a Real Estate Professional
When a real estate professional represents only one party (either the buyer or the seller), they have specific legal responsibilities, including:
- Undivided loyalty to their client
- Acting in the client’s best interest at all times
- Avoiding conflicts of interest
- Disclosing conflicts of interest if they arise
However, in transaction brokerage, the real estate professional can no longer fulfill all of these responsibilities. There’s a conflict between the best interests of the buyer and those of the seller—while the buyer wants to pay as little as possible, the seller wants to sell for the highest price possible. It’s impossible for a real estate professional to represent both sides effectively in such a scenario.
How Transaction Brokerage Works
In transaction brokerage, the real estate professional provides facilitation services, which can include:
Helping both parties negotiate an agreement
- Providing property statistics, information, and comparative details from local databases
- Preparing agreements of purchase and sale, and other relevant documents according to both parties’ instructions
The real estate professional must remain neutral, treating both the buyer and seller fairly and impartially, without offering confidential advice to either party.
Consent is Key
Before proceeding with transaction brokerage, both the buyer and the seller must give informed consent by signing an Agreement to Represent Both Buyer and Seller. Informed consent means that both parties understand the implications and possible consequences of allowing the same real estate professional to represent both sides.
If you don’t consent to transaction brokerage, or if the other party doesn’t, you can choose to seek representation from a different real estate professional, or explore other available options.