HUD issued a Mortgage Letter on September 23rd prohibiting dual agency on pre-foreclosure sales (short sales). The presumption is that dual agency precludes an arms-length transaction. We agree.
Dual agency is a form of representation that is illegal in every other profession and it is extremely harmful to consumers. Dual agency disclaims all representation (it really is no representation at all). Perhaps the most nefarious consequence of dual agency is that consumers are stripped of their representation on the most important and complex transaction of a lifetime. We believe consumers, especially distressed property owners, need to be making informed decisions based on impartial legal and Realtor advice. We question why the National Association of Realtors opposes this rule that cements the need for impartial Realtor advice in the transaction. Could it be the double commission payable on dual agency transactions?
UPDATE: Unfortunately, despite HUD’s good intentions, they capitulated under the political power of the National Association of Realtors. Click here: Is NAR Running HUD? HUD Capitulates.
Read our letter to HUD on this important issue by clicking on the Link below: