The announcement by the Royal Institution of Chartered Surveyors (RICS) that ‘double dipping’ or dual agency is to be banned from January 2018 has got to be a good thing, all things considered.
Dual agency means that a commercial agent gains a fee from both the buyer and the seller in the same transaction. In addition, a practice that they term ‘multiple agency’ whereby a commercial agent acts for several parties at once who are competing to buy the same property, in a contract race etc. is also to be banned from January 2018.
I have always taken the view that it is unprofessional and unethical to compromise your standing as a property agent for mercenary benefit. Reputations in the market take years to build and can be destroyed in a short time by being greedy and allowing yourself to be put in a conflict of interest situation. You simply cannot act in your client’s best interest in this type of scenario.
The only circumstance where it might be acceptable is where the agent is effectively acting as a broker in negotiating a sale or acquisition and the normal market fee is then split between the two parties.
However, even this may be barred under the new Directive. It will be interesting to read the details and clarify this.
The practice to be banned, as above, has probably been more prevalent in London and the South East than up in the North, due to the fact that so much more wealth is concentrated down there. But even so, I believe this was the right stance for the RICS to be taking globally. Any ruling has got to apply to all concerned in the interest of fairness.
At Andrew Idle Associates we have never been involved in these practices – it is not good for business relationships and money isn’t everything – there must be some principle in the way we conduct our dealings.