San Jose Mercury News Market Wise Q&A column: Dueling with the Pitfalls of Dual-Agency (Buyer & Seller Beware)

Pat Kapowich for the San Jose Mercury News

Q: Last year we negotiated to purchase a home and were told that our final counter-offer to the counter-offer was verbally accepted. It was decided that we’d all sign a new contract combining all the agreed-upon terms during a week-long negotiation. At the last minute, a new buyer appeared. We were later told that the seller’s agent would represent this buyer. Plus, we were asked to submit an all-new offer, creating a bidding war. This seemed incredibly unethical and unfair on several levels. It goes without saying we did not win out and feel completed blindsided. What are the rules regarding questionable actions by a seller’s agent?


A: Dual-agency is perfectly legal in California. However, many agents do not engage in it for a number of reasons, not the least of which is an unhappy consumer on the losing end of a multiple-offer negotiation. Many firms acknowledge the legal and image problems associated with a potential in-company sale during the multiple-offer process. For that reason, many companies prefer the broker of record and/or sale manager to sit in on the negotiations. There are additional steps to enhance the appearance of fairness, such as: in-person presentations of offers, preventing any offer to be viewed prior to presentation of all offers and/or making sure all the offers are sealed in envelopes until presenting them to the seller(s).

Conversely, the most unethical of our industry’s licensees will often stall buyers’ agents with offers when they have a buyer of their own, in order to collude with a licensed empty suit to act as a buyer’s agent. Weeks later at closing, the seller’s agent will quietly extract 75 percent of this individual’s commission in the form of a referral fee.

Should a buyer or his/her agent sense funny business afoot, the best gambit is to call the firm’s owner and/or broker immediately. That phone call will not go over well with the seller’s rep, so the tactic should be used as a last resort prior to a competing offer being ratified. A buyer has nothing to lose at that point except, of course, the house.

Now, please do not let an unhappy episode keep you out of the market. Be assured there are plenty of great sellers represented by outstanding firms and agents.


Realtor Pat Kapowich, Kapowich Real Estate, is a Certified Residential Broker and instructs quarterly in real estate at De Anza College.  Contact him at (408) 245-7700 or via


E-mail your residential real estate questions to Pat at:


Realtor Pat Kapowich. Broker/Owner
Certified Residential Broker
Home Sales Expertise and Experience
(408) 245-7700