Local Area And Real Estate News

           Buyers and Sellers Agency are possibly the most misunderstood portions of Utah real estate law.  This may be more true in Park City real estate transactions than other portions of Utah as many of the buyers are second home buyers and their knowledge is based on another state's law.  Agency is something that at first glance seems quite straightforward; that is, until the idea of dual or limited agency is introduced.            Agency is defined as: The relationship created when one person, the principal, delegates to another, the agent, the right to act on his or her behalf in business transactions and to exercise some degree of discretion while so acting. An agency gives rise to a fiduciary relationship and imposes on the agent, as the fiduciary of the principal, certain duties, obligations, and high standards of good faith and loyalty.  To understand this we need to further define Fiduciary as: The relationship of trust, honesty and confidence between agent and principal; the faithful relationship owed by an agent to the principal.           In a straightforward real estate sale or purchase, there is an agent working for the Buyer and one working for the Seller.  Things change though when the Buyer is not represented or is represented by the Seller's agent (Limited or Dual Agency in Utah).  Utah law allows for these types of transactions to exist and many agents actually try to involve themselves in them.  Why? Money of course!           Sellers, when agreeing to allow and agent to represent them in marketing and selling their home, agree to pay the agent a commission regardless of who sells the home.  The agreement allows the agent to offer a commission to a Buyers agent for bringing a Buyer and taking care of the Buyers side of the sale.  If the Seller's agent can find a Buyer, the agent doesn't have to share with a Buyers' Agent.  The agent doubles up their commission.            The issue that presents itself here is: how can an agent act as a fiduciary in when their responsibility is to two different people with somewhat opposing interests.  The Seller wants the most money for their home and the Buyer wants the home for the best price available.  How can the agent work to get the most money for the Seller and the best deal for the Buyer at the same time?  They can't.  In fact all parties involved have to sign an agreement allowing for Limited or Dual Agency.  The form effectively states that the Agent involved now works for no-one and is merely an intermediary making sure that all paperwork is understood by all parties and completed correctly.  And for acting in neither party's best interest, the agent gets "both sides" of the commission the Seller agreed to pay.           Unfortunately, this situation presents itself due to an innocent mistake made by the Buyer thinking that they will get a better deal by dealing with the Seller's agent rather than getting their own.  We at the YouInParkCity.com group attempt to not involve ourselves in the practice of "Dual" or "Limited Agency".  We encourage all of our Park City real estate clients to be represented by a Realtor that is working solely in their best interest.  Feel free to contact us by phone (888) 968-4672 or email so that we can start working for you!