Why Dual Agency Was Legislated as Being "Legal" Even Though it is Bad for the Consumer

Dual agency, designated agency, transaction broker, and facilitator are all efforts to undermine and circumvent the common law of agency. In fact, NAR has issued instructions to all state and local associations to ask for new state laws that specificlly abrogate the common law of agency. Agency disclosure in the late 1980s revealed that an in-house sale might be impossible if both sellers and buyers requested representation. The fact that dual agency was, and is, dangerous for the agent, and an oxymoran by defination, gave rise to possible alternatives to save the in-house sale and the 10 billion dollars it brings.

To get around the drawbacks of "dual agency" - states are adopting "designated agency". Thats where the employing broker designated one agent within his/her office to be an agent for the seller and another agent within her/his office to be the agent for the buyer.  Law firms don't allow you to hire an attorney while your adversary uses another attorney at the same firm.  So why should this be legal in Real Estate??   The buyer's information and negotiation power can be compromised in these offices.

So who is it then that benefits from these new real estate laws? Usually its the party that initiates new legislation that has the most to gain. NAR and state associations do the leg work because they are fiduciaries of the membership. Who represents the public?   Even the state real estate associations (with the exception of Ohio) do not disclose the existance of the consumer option of Exclusive Buyer Agency in their "Consumer Options" brochures.  Though Exclusive Buyer Agency represents a much higher level of representation to the buyer - the clout and special interest groups and PAC money of the large brokerages ensure that the general public is left in the dark.

The fact that dual agency was, and is, dangerous for the agent, and an oxymoran by defination, gave rise to "designated agency" (which is really dual agency is sheep's clothing) to save the in-house sale and the 10 billion dollars it brings.