Understanding Limited Joint Representation in Real Estate

Hello everyone!

Today, let's delve into an important topic that often causes a bit of confusion: limited joint representation in real estate transactions. What does it mean when your real estate transaction is under limited joint representation? Let’s unpack this together.

WHAT IS LIMITED JOINT REPRESENTATION?

Limited joint representation occurs when the same real estate brokerage represents more than one party in a real estate transaction. Most commonly both the seller and the buyer. It's a situation where one brokerage has the privilege and responsibility of assisting both parties. But, for this to happen, both the seller and the buyer must agree to this arrangement. They will need to sign a form acknowledging their understanding and consent to proceed under limited joint representation.

WHAT CHANGES WITH LIMITED JOINT REPRESENTATION?

You might wonder, what exactly changes when both parties are represented by the same brokerage compared to when they have separate representation? The primary difference lies in how the realtor can communicate and advise each party.

MAINTAINING FAIRNESS FOR ALL

In limited joint representation, fairness is the cornerstone. The realtors involved must ensure they are unbiased and cannot favor one party over the other. This means that realtors are restricted in how they can advise on pricing and other sensitive information.

For instance, imagine a home listed at $350,000. If the seller privately tells their realtor they are willing to accept $340,000, the realtor cannot disclose this to the buyer. Similarly, if a buyer tells the realtor they are willing to go up to $360,000 but will start with an offer of $340,000, the realtor cannot share this with the seller.

Another critical aspect is confidentiality. Realtors cannot disclose the reasons behind a sale or purchase. For example, if the seller is moving to another city and has already bought a new home, the realtor cannot share this information with the buyer. Such details remain confidential to maintain fairness and integrity in the transaction.

Understanding these nuances helps ensure that both buyers and sellers are treated equitably and that the transaction proceeds smoothly and transparently.

Note that just because you are in a limited joint representation situation does not necessarily mean the realtors involved know both parties. When two realtors work for the same brokerage and one represents the seller and the other represents the buyer this is still considered a limited joint representation situation. In this case though often times the realtor representing the buyer has never meet the seller and vice versa.

I hope this clarifies what limited joint representation means and how it impacts your real estate transactions. As always, feel free to reach out with any questions or if you need further clarification!

Your Friend in Real Estate,
Sam Scribilo