Imagine you're going through a divorce, and the solicitor sitting across the table from you is also representing your soon to be ex.
You wouldn't stand for it. Nobody would. It's not permitted in the legal profession for exactly the reason you're already thinking: one person cannot serve two sets of interests that are pulling in opposite directions and call it fair representation.
Property works the same way, at least on paper. The same solicitor can't act for both the buyer and the seller in a transaction. They can work for the same firm, but they'll be represented by two different solicitors, each one working solely for their own client.
So what happens when that same principle doesn't exist in our sector?
The Deal That Was Too Good to Question
Some years ago, I became aware of a local estate agent who had found a way to make significantly more money than a standard sale. They were taking their usual fee from the seller, and on top of that, a 50% share of the sourcing agent's fee from the buyer.
On paper, everyone was winning. The seller got a fast sale. The buyer got a steady stream of deals. The sourcing agent completed far more transactions than they otherwise would, even at half their usual fee, because the agent kept bringing them ready made deals in volume. And the estate agent quietly earned more from these transactions than from anything else on their books, often without the need to market the property at all, because there was already a queue of cash buyers waiting.
Nobody was losing. Until somebody asked a question.
The Question Nobody Wanted to Answer
On one of these transactions, the seller found out about the fee arrangement between the two agents, something they had never been told about. So they asked the estate agent a very reasonable question:
"As you didn't market my home in the normal way, and simply told me you had an offer from a buyer, did you get me the best price for my home? Or did you just convince me that a quick sale was in my best interest, because it earned you a far larger fee than you ever declared?"
There isn't a comfortable answer to that question.
Disclosure Isn't Optional, Even When It Isn't Banned
The regulatory bodies covering property transactions haven't banned dual fees outright. What they have said is that any such arrangement must be disclosed before a client enters into an agreement, and it needs to be clear: who is being paid, how much, and when.
That's the rule. Whether it's consistently followed is a different question. Plenty of estate agents have found ways to earn considerably more when working alongside a sourcing agent, and in some cases, charging a fee to the buyer as well, all without the seller ever knowing the full picture.
Whose Interests Are Really Being Served?
Go back to the divorce solicitor. If one person can't fairly represent both sides of a split, how can an estate agent or a sourcing agent claim to represent both a seller and a buyer, when what each of them wants is fundamentally opposed?
Is that estate agent sending every property to the same sourcing agent because it's genuinely the best outcome for their seller? Or because it's the best outcome for their fee?
I think the practice should be banned outright, not just disclosed. But I'll admit that's my view, not the regulator's position. What's yours?
Building a Sourcing Business on Trust, Not Just Volume
Whatever side of this you land on, one thing is certain: how you structure and disclose your fees isn't a technicality, it's what determines whether a seller or buyer can trust you at all.
Our Complete Setup to Sourcing Success Programme covers exactly this, how to structure your fees compliantly and disclose them properly, alongside everything else you need to run a sourcing business the right way from day one.
And if you're a NAPSA member, we go a step further. We can register your business and your fee structures with us directly, giving your sellers and buyers genuine peace of mind that everything is exactly as it should be, before they ever sign anything.
Because the question that seller asked shouldn't be one anyone on your deals ever needs to ask.
