A hard-learned lesson about the dangers of dual agency - why having the same agent represent both buyer and seller creates conflicts of interest that can cost you dearly.

Why You Should Never Use the Same Agent as Both Buyer and Seller

There is only one thing that is worse than making a mistake and it's making the same mistake twice. And in this case, well, in this case, I made it twice. Today, I want to talk about how important it is to avoid having the same agent representing you and the seller.

I know a lot of you have been doing this - maybe to save money, secure better deals, or because you're a wholesaler who doesn't want to involve another agent. But I'll tell you why I did it twice and why it's such a big mistake.

The First Time

The first time I did this, I wrote a blog post about it (you can search for it - there might also be a podcast episode). I found a really nice deal that I desperately wanted to buy. I thought I wouldn't have a chance unless I made the agent represent both sides. I figured if she represented both parties, she would help me secure the deal since there was a lot of interest and competition.

After I did it, I told myself I would never do this again. Eventually, I didn't even buy that property because of the agent's behavior - she didn't allow me to do an inspection, among other issues.

Making the Same Mistake Again

But here it happened to me again. There was this off-market deal, and the agent told me, ""There is no way you're going to get it unless I am your agent and I'm going to represent you as well."" He said this after I brought my general contractor to see the property.

I don't know if this move is legal or not - let me know in the comments what you think. But because I was really looking for a deal and wanted to secure something for my investors and myself, I told him, ""Okay, let's put it on a contract.""

This was an agent I had worked with in the past, unlike the first case where I hadn't worked with her before. But he was representing both sides, and that's a big problem.

The Red Flags Start Appearing

Let me give you a taste of what dual agency looks like:

I sent an offer to purchase on Friday. He told me the seller hadn't accepted it yet but hoped they would accept it verbally by Monday. I understood we had a deal, but it wasn't signed yet. So I told him we wouldn't work on it until he confirmed it was secure - I wouldn't have my team or employees start working on this. We would wait.

On Saturday, I asked what was going on. He told me he thought we'd only have the seller's signature on Monday. In my head, I thought this sounded iffy because they were probably looking for other offers, trying to maximize their profits. That's when I started getting suspicious.

The Inspection Period Manipulation

On Sunday, I asked him about the inspection period - would it start from the day I sent the offer or from the day of acceptance? He told me from the day of acceptance. I have this in emails, in writing.

On Monday, I got the offer to purchase signed by both sides. When we were discussing the inspection and I suggested bringing an inspector on Thursday (since we had seven days), he told me my offer was actually accepted on Friday. So I only had until Friday, and he scheduled the inspection for Wednesday so I could ""make it on time.""

You get the story, right? Can you believe a word a double agent tells you? No, you can't.

More Problems Surface

He also limited my ability to do multiple walkthroughs during my due diligence period, claiming I could only do one - even though I don't think there's a law that limits the times I need to make my due diligence during the due diligence period.

The inspection happened two days ago, and guess what? Maybe he forgot to mention that the basement was a swimming pool. Maybe he forgot to mention that the roof needed to be replaced.

The Bottom Line

Avoid this at all costs. Do your due diligence. And always - or maybe I'm just going to say this to myself because I cannot decide for you - but to me, always have an agent that you are paying for who represents you and you only, not the seller. Otherwise, you have conflicts of interest that will cost you dearly.

I know many of you are boots on the ground and not traveling the world while working as I do, but this lesson applies regardless of where you are. Don't make the same mistake twice like I did.