What Is A Dual Agent In Real Estate? (TOP 5 Tips)

Dual agency occurs when a real estate agent works on behalf of both the home buyer and seller. In most real estate transactions, it is much more common to have separate agents represent each party, as this helps avoid the conflict of interest that can happen when an agent negotiates for both sides.

Is dual agency illegal?

  • Dual Agency is a conflictive relationship that strips buyers and sellers of service to a level that can best be described as abandonment. Dual agency arises when the real estate broker is representing both the buyer and the seller. It is illegal in every other fiduciary profession except under the most extreme circumstances.


Is it good to have a dual agent?

The bottom line is that dual agency is certainly a good thing for the agent but is typically a negative scenario for both the buyer and seller, as neither party is getting fair representation. This is an especially negative arrangement for inexperienced buyers and sellers who really need professional guidance.

What does it mean when a Realtor is a dual agent?

Dual agency is when a single real estate agent represents both the buyer and the seller in a real estate transaction.

Should I allow my realtor to be a dual agent?

To protect your finances and ensure you are selling or buying at the best possible price, it is probably best to avoid dual agency. Buyers or sellers may be inclined to work with a dual agent because they want to obtain confidential information about the person buying or selling the home.

How do you explain dual agency?

Dual agency is a real estate term that means one agent or brokerage represents both the seller and the buyer in the same real estate transaction. A dual agent must walk a narrow path to be neutral toward both parties, and they may not disclose confidential information to either party.

Can a dual agent suggest an offer price?

The biggest problem with dual agency is this: a dual agent cannot — by definition and sometimes by state law — represent your best interests. The person is more of a referee than an agent. For example: if you’re a buyer, you may want your agent to advise you on what price to offer for a home.

Is dual agency ethical?

Is dual agency legal? NAR allows dual agency in its Code of Ethics. Standard of Practice 1-5 explains that Realtors® can represent buyers and sellers in the same transaction after providing full disclosure and obtaining informed consent from both parties. Most states allow dual agency for real estate transactions.

Can buyer and seller agent be the same?

In the real estate biz, one agent representing both the seller and the buyer is called dual agency. Although it’s legal in some states, many real estate agents—and house hunters, too—see dual agency as a conflict of interest.

How do you tell a realtor you’re going with another agent?

During your scheduled call, tell your real estate agent you’ve chosen to work with someone else and thank them for their time. They may ask if you’ve signed an exclusivity agreement with someone else. You don’t need to disclose any other information if you don’t want to.

What is the difference between single agency and dual agency?

“Dual agency” refers to an agent that works with both the buyer and seller of a home. Two agents can work for the same broker on the same transaction, causing a dual agency situation. Single agency refers to an agent or real estate broker that works with only one party in a real estate transaction.

What makes foreclosed property Risky?

One of the risks of foreclosure investing is buying a property that needs more repairs than you initially expected. In fact, foreclosed homes are typically sold «as is», meaning that the bank or the owner won’t make any repairs before putting the property up for sale.

Is it a bad idea to use the same Realtor as the seller?

Buyers can catch a break on Realtor commissions if both sides are using the same agent. The biggest advantage may not be saving money, but the possibility of having a leg up on other buyers by having the seller’s agent know what the other offers are and helping you make the best offer.

What is consent for dual agency?

As a dual agent, the real estate broker does not owe undivided loyalty to either the seller or buyer. If the buyer has previously signed Consent for Dual Agency, the buyer must affirm the buyer’s consent for the purchase of a particular property before an offer to purchase is presented to the seller.

What if the seller rejected my offer?

Restructure Your Offer Everything is negotiable in a real estate deal. Just because a seller has rejected your initial offer doesn’t mean you can’t restructure it and resubmit it. If you’re using a real estate agent to find a home, work closely with her to go over your rejected purchase offer.

Dual Agency In Real Estate

Note from the editors: We receive a commission from affiliate links on Forbes Advisor. The thoughts and ratings of our editors are not influenced by commissions. Oftentimes, a buyers and seller have a distinct real estate agent, but in 10 percent to 20 percent of house sales, both parties have the same agent. However, this approach, termed dual agency, can occasionally generate greater conflicts of interest since they’re not meant to tilt more toward the best interest of either the buyer or the seller.

The report was released in 2019.

To clarify the air, here are information on what a dual agency is, and how it operates.

What Is Dual Agency?

When a single real estate agent represents both the buyer and the seller in a real estate transaction, this is referred to as dual agency. When a real estate agent represents both the landlord and the renter, or when the same real estate business represents both sides in a buy and sell or renting transaction, this is known as a double representation. When an agent represents only one party, this is referred to as single agency. The opposite party is represented by a separate agent who is employed by a different firm.

How Does Dual Agency Work?

In a perfect world, dual agency would function as follows. When someone engages a real estate agent, they have the option of deciding whether or not they want to work with a dual agent, as long as they are aware of the advantages and disadvantages of doing so. Any customer who indicates that they are comfortable with dual agency will be required to sign an official declaration from the state department of real estate, according to the agent. Unfortunately, not all states require such disclosures to be made at the start of an agent-client relationship, which is a disappointment.

Clients are under no obligation to consent to dual agency.

  • Alaska
  • sColorado
  • sFlorida
  • sKansas
  • sOklahoma
  • sTexas
  • sVermont
  • sWyoming

In several of these states, agents are not even permitted to enable accidental dual agency to occur. In the event that someone sees a property online that they wish to purchase, but that home is offered for sale by the same agent who has been recruited to represent them as a buyer, this situation may arise.

When to Consider Dual Agency

Some real estate professionals and consumer advocates believe that considering dual agency is a bad idea at all. A dual agent’s ability to remain objective in a transaction when they are representing both the buyer and the seller is called into doubt by these individuals. This is mostly due to the fact that the buyer will want to sell their house for the best possible price, whilst the seller will want to get the lowest possible price. Other real estate agents claim that dual agency is not an issue and may even be advantageous to both parties by expediting communications and accelerating the closing of the deal.

There are a few of important things to keep in mind. Dual agency can be difficult to prevent in some situations, such as when:

  • A huge real estate company employs hundreds of agents who all operate in the same geographic region. A tiny area has a small number of agents

Dual agency can even occur without the buyer being aware of it, as in the following examples:

  • Construction is now underway. When you go to a sales office to purchase a new construction house, you will be speaking with agents that represent the seller (the builder). Prospective purchasers may not be aware of this connection at first glance. When purchasing new construction, savvy purchasers will engage a single agent to represent them
  • Nevertheless, many buyers are unaware that they have this alternative, which is to attend an open house. The seller’s agent will be present at the open house to represent him or her. Besides that, they’ll have a sign-in sheet to gather the names and phone numbers of anyone who are interested in purchasing a property. If a visitor is interested in purchasing the open house property and has a positive relationship with the listing agent, he or she may decide to hire them without considering the possible downsides. Listings on the internet. Your house search takes you to the internet, where you come across a property that you like. The listing includes the contact information for a real estate agent. It is possible to be in a dual agency position if you contact them directly rather than having your own agent (who works for a separate organization) reach out to them.

Pros and Cons of Dual Agency

State regulations governing when agents must disclose dual agency, as well as whether they must disclose it orally or in writing, can leave home buyers and sellers in the dark about their rights. Furthermore, some agents may not adhere to the guidelines. So that you may minimize the chance of concealed dual agency, you should inquire with your agent as soon as possible about whether they will be working solely for you or if they are working, or may be working, as a dual agent who also represents the other party.

As a customer contemplating dual agency, you should be informed of the advantages and disadvantages of each option before making a decision.


  • When one agent represents both sides of a real estate transaction, there is less chance of a stalemate in pricing negotiations or a stalemate in receiving a response to a query. It is still possible that the agency will not receive a quick answer from their buyer or seller. However, because there aren’t two agents, there’s one fewer party who may produce a snag in the proceedings. Savings that could be made: It’s possible that an agent who stands to make a double commission will be ready to take a lesser commission. Because the seller is normally responsible for both agents’ commissions, the seller is the one who stands to benefit the most financially from this circumstance. However, if the seller’s costs are lower than the buyer’s, the seller may be more ready to accept a lower purchase price. The agreement might be beneficial to all parties involved, including the seller, buyer, and agent. More in-depth understanding of the property: From the standpoint of a buyer or renter, working with the seller’s or landlord’s agent may result in more access to information regarding the property. There’s only one problem: some of the information you want may be the same information that the seller or landlord does not want their representative to provide. These specifics will be kept private by an ethical actor in this case
  • Indeed.


  • Conflict of interest: This is the most significant disadvantage of dual agency, and it is the primary reason why some states prohibit it. When an agent represents both the buyer and the seller, or both the landlord and the renter, it might be difficult for him or her to maintain objectivity due to human nature and financial incentives. Negotiations can be difficult: An agent who represents two parties with opposing interests is unable to argue for either of them at the same time. Whenever a dual agent recommends that a buyer make a purchase offer that is lower than the list price, the agent is acting against the best interests of the seller. Similarly, if that dual agent advises the seller not to accept an offer that is less than the list price, they are acting against the best interests of the buyer. Clients are responsible for looking after their own best interests: A dual agent is unable to represent the best interests of two parties with opposing objectives at the same time. This means that a dual agent operating in good faith cannot do anything other than assist the transaction. For example, the buyer will be responsible for determining the price they wish to offer and deciding whether or not to counteroffer without the assistance of their agent.
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What Is a Dual Agent?

It is a real estate phrase that refers to the fact that one agent or firm represents both the seller and the buyer in a single property transaction. A dual agent must tread a fine line in order to maintain neutrality toward both parties, and they are not permitted to provide private information to any party. In this article, you’ll learn more about dual agency, how it works, and what you can do if you find yourself in this situation while buying or selling a house.

What Is Dual Agency?

A dual agency situation is one in which both the listing agent and the buyer’s agent are the same entity; in this scenario, the entity can be either one agent who represents both the buyer and seller or two agents from the same brokerage company representing both the buyer and seller. With two agents on either side of the transaction, the brokerage gains from both sides of the transaction.

How Does Dual Agency Work?

When a real estate agent or firm represents both the buyer and the seller of a house, this is referred to as dual agency. This arrangement is advantageous to the agency since, depending on state rules and practices, they earn a portion of both sides of the transaction. The practice of dual agency is legal in the majority of states, but it is carefully regulated to prevent buyers and sellers from being taken advantage of. In Alabama, for example, it is required that both the buyer and the seller consent to being represented by the same agent or agency.

  1. Consider the following scenario: Betty Smith, an agent with the Smith Brokerage business, offers a property for sale on Main Street.
  2. If an offer is made on behalf of a buyer by another agent for Smith Brokerage, such as John Doe, Smith Brokerage is operating as a dual agent for the buyer.
  3. Dual agency can manifest itself in a variety of more complex ways.
  4. The only issue is that the buyer will have to sell their present property in order to purchase the seller’s home.

Betty Smith then enters into a listing agreement with the buyer in order to assist them in selling their house in order to purchase the seller’s home. Due to her role as a dual agent, Ms. Smith and the business stand to earn from two house transactions.

Fiduciary Responsibilities

Because real estate agents are bound by fiduciary responsibilities, the practice of dual agency can result in legal complications. These responsibilities need unwavering dedication to their clients. A buyer’s agent is responsible for acting in the best interests of the buyer, while a seller’s agent is responsible for acting in the best interests of the seller. An individual operating as a dual agent would have to demonstrate devotion to both sides of the bargaining table, which would be a difficult, if not impossible, effort.

As a result, real estate brokers must disclose all of their dual agency affiliations to the public.

In the case of a real estate listing or buyer agency agreement, you have the ability to decline dual agency representation even though the language is included in the boilerplate agreement.

Dual Agency Benefits

Despite the fact that dual agency raises a number of distinct worries and challenges, these potential drawbacks can be mitigated to some extent by a number of positives. If you’re in a dual agency arrangement, you may notice a reduction in response times in some cases. Your agent will be able to respond to your inquiries without having to wait for the opposite party’s representative to receive a response from their clients. The use of dual agency may also make the transaction process more efficient, whether you are a buyer or a seller.

This has the potential to help a transaction go more quickly.

As a rule, you would be required to pay a commission to your agent—typically 6 percent of the sale price—which would then be divided with the other agency.

Dual Agency Disadvantages

One example of when dual agency does not function is when a dual agent is unable to bargain to obtain both the highest price for the seller and the lowest price for the buyer at the same time. Furthermore, a dual agent may be motivated to aim toward a higher selling price in order to put more money in their own pocket through the commission structure. In a situation involving two agencies, there are no new perspectives. When two independent agents, brokers, or companies are engaged, it is possible that one of them may notice—or at the very least should notice—if the other makes a mistake, allowing the problem to be addressed.

Singular agent refers to an agent who is only accountable to one party, and their devotion to that side is much more obvious. Negotiations conducted by a single agent can result in a more seamless transaction and a more fair playing field for both parties involved in the transaction.

Key Takeaways

  • A real estate broker or agent that represents both the seller and the buyer is known as a dual agent. In many places, dual agency is permissible. Dual agency, in which the legal aspect is strictly managed
  • You have the option of refusing to be represented by a dual agent.

9 Takeaways: What is Dual Agency in Real Estate?

Dual agency in real estate is something most buyers and sellers are aware with, which brings us to the issue of what exactly is dual agency in real estate and how does it operate. Dual agency isn’t extremely frequent, but it does tend to occur from time to time, so it’s always a good idea to be familiar with the subtleties of this transaction type in order to avoid being surprised. I worked as a dual agent, representing both the buyer and the seller in my very first transaction as a Real Estate Agent in 2007.

What is Dual Agency in Real Estate?

When a real estate agent works with both the buyer and the seller on the same transaction at the same time, this is referred to as dual agency. Here’s an example of a situation in which dual agency may occur: When a customer called Mary wants to sell her property, she hires a real estate agent to help her. That real estate agent also has a second customer, called Rob, who is in the market to purchase a property at the moment. During his tour of Mary’s home, Rob makes the decision to purchase the property.

  • If Rob and Mary are each represented by a separate real estate agent, yet both real estate agents are employed by the same brokerage business, this is an example of dual agency.
  • Alternatively, if the buyer is not represented by a real estate agent, the buyer may request that the seller’s agent act on their behalf during the transaction.
  • It’s crucial to remember that the definition of dual agency varies from state to state.
  • Transaction brokers are agents who represent the interests of both the buyer and the seller at the same time.

What are the Pros and Cons of Dual Agency?

Occasionally, when a buyer and seller are both represented by the same real estate professional, the agent and clients may see the process as being somewhat more streamlined, as the real estate agent may prepare paperwork and documentation for both sides while also communicating between them swiftly. Dual agency removes the need for a second real estate agent from the equation because both the buyer and the seller are dealing with the same real estate agent. Due to the fact that the dual agent has been recruited to sell the house, it is understandable that the dual agent will have far more knowledge on the home being sold than other agents.

When dealing with a buyer’s agent, purchasers will generally gain valuable insights into the house that they would not have gained if they were working with a seller’s agent. This can help speed up the purchase process by ensuring that questions about the home are answered as quickly as possible.

Cons of Dual Agency:

Despite the fact that the advantages of dual agency are appealing, the disadvantages of dual agency tend to exceed the advantages in the majority of transactions. It is the responsibility of a real estate agent to acquire the greatest feasible price for their client when they represent a seller in real estate transactions. Similarly, when an agent represents a buyer, he or she is expected to assist the client in obtaining the best available price. When the same agent represents both the buyer and the seller, however, it becomes exceedingly difficult to adhere to the principle of obtaining the customer the best price possible.

Due to their steadfast allegiance to the seller, they are also committing a disservice to their customer by knowingly selling an expensive house and being unable to counsel the buyer against acquiring the property.

This might be due to factors like as how long the agent has known the buyer or seller, personal ties, and so on.

Being a dual agent is incredibly stressful, and it places the real estate professional in a dangerous position.

  • Inability to bargain over the list price or inspection concerns

In a dual agency situation, the real estate agent represents the interests of both the buyer and the seller, which can make negotiations more difficult. The seller’s agent will advocate on the seller’s behalf in a conventional transaction scenario in which a buyer’s agent and a seller’s agent are both engaged in order to guarantee that the seller does not have to pay excessive repair expenses if an inspection report reveals a number of faults. The buyer’s agent will do the same thing for their client, negotiating that the repairs be covered by the seller or that the buyer be compensated in some way for the high expenditures of repairs.

Some real estate agents, for the reasons described above, refuse to engage in dual agency at all, believing that it is unfair to their customers and so refuse to participate.

It is this that brings us to our following point:

Is Dual Agency Ethical?

Real estate agents who opt to act as dual agents earn double compensation since they are acting on behalf of both the buyer and the seller in the transaction. As a result, they may be inclined to withhold vital information from either the buyer or the seller for fear of the transaction failing and them losing their double commission. Due to the fact that the agent is acting on their own and without the involvement of a second agent, legal and ethical difficulties may also emerge. The buyer and seller are often oblivious of the legal ramifications of a transaction, and they may be unaware that an agent is breaking the law or engaging in unethical activity in order to guarantee that the transaction closes successfully.

In addition, an agent may mistakenly reveal sensitive information to a buyer or seller without the buyer or seller being aware of it.

This is more prevalent when the real estate agent has a close relationship with either the buyer or the seller, or with both at the same time.

Dual agency may be a slippery slope in this sense, and if the realtor isn’t exceedingly careful in the manner he or she represents both sides of the transaction, it might result in legal penalties.

Is Dual Agency Bad or Illegal in Some States?

In the states of Texas, Colorado, Florida, Alaska, Kansas, Maryland, Oklahoma, and Vermont, dual agency is prohibited. The remaining states have varying regulations regarding dual agency, but the majority of them require that the agent declare to their customers that they will be representing both sides of the transaction – they cannot represent both parties without both the buyer and the seller being aware of this.

Who Pays the Commission in Dual Agency?

In a dual agency situation, the seller is normally responsible for the commission. While this varies from transaction to transaction, the commission is normally five or six percent of the sale price. A percentage commission is divided with a second real estate agent when a single real estate agent is not functioning as a dual agent, resulting in each agent receiving a % commission on the total transaction price. In dual agency, on the other hand, the agent maintains the entire commission and does not share it with the client.

However, while the dual agent earns commissions from both sides of the transaction, both the buyer’s and seller’s sides, the seller is responsible for covering the entire commission expense.

Should I Negotiate Commission in Dual Agency?

When a buyer and seller agree to dual agency, some agents may be ready to cut their commissions, depending on the circumstances. It is advised that the seller negotiates the dual agency commission before listing the house for sale in order to ensure that the seller and real estate agent are on the same page from the beginning. Alternatively, if you do not wish to participate in dual agency at all, this should be discussed with your real estate agent before signing a listing agreement.

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Should I Avoid Dual Agency in Real Estate?

It is usually better to avoid dual agency in order to safeguard your financial interests and guarantee that you are selling or purchasing at the greatest available price. The need to gather personal information about the individual who is buying or selling a house may lead buyers or sellers to seek the assistance of a dual agent. It’s possible that as a seller, you’ll believe you may persuade the real estate agent to inform you of the greatest price the buyer is prepared to pay for your house.

This is not always the case.

As a result, if the primary goal of the buyer or seller is to get access to privileged private information about the other party, dual agency will not enable access to those insights.

Depending on whether or not both parties are in agreement on a price and whether or not there are any obvious flaws that emerge from the inspection report, the agent may be able to negotiate the sale with reasonable ease.

Unfortunately, this is a very unusual occurrence. Almost all buyers and sellers will wish to negotiate at least some aspects of the deal – whether it be the list price, closing expenses, or home inspection.

Do You Pay the Real Estate Agent if You are the Buyer?

The buyer is not responsible for paying a commission to the real estate agent; the payment is the obligation of the seller in this situation. As a result of their sales revenues, the seller pays their real estate company, which then pays the collaborating real estate company that represents the buyer. This is how real estate agents are compensated, and in a dual agency transaction, they are compensated on both sides of the transaction. Having said that, the buyer is liable for the payment of closing expenses, which in the state of North Carolina normally vary between one and two percent of the purchase price.

This commission is normally five or six percent of the transaction price and is divided among the three parties.

Key Takeaways

As a buyer, you should be aware that you are not liable for paying a real estate agent’s commission. As a result, it is in your best advantage to engage a buyer’s agent to represent you solely rather than risk becoming embroiled in a difficult dual agency scenario. In most cases, having someone advocate on your side who does not have a personal relationship with the seller and who can put your queries and concerns above everything else is the best way for purchasers to take. Dual agency may appear to be an attractive option for both buyers and sellers at first glance.

While some transactions using a dual agent may proceed more quickly than others, this might be due to the real estate agent rushing the process in order to earn their commission, which means they may neglect to convey important data to the buyer and seller in the process.

The more usual case is a real estate agent who does all in their power to represent both the buyer and the seller in the best interests of both, but who is legally restricted in their capacity to do so because of legal restrictions.

Dual Agency in Real Estate: Buyer (and Seller) Beware

Real estate has traditionally been the preferred investment for people seeking to accumulate long-term wealth for their families and future generations. By subscribing to our complete real estate investment guide, you will receive assistance in navigating this asset class. In the majority of real estate transactions, there are two agents involved: one representing the seller and another representing the buyer (or both). Furthermore, both parties may choose to be represented by the same individual, a circumstance known as dual agency.

The notion of dual agency and why it is a bad scenario, especially for inexperienced buyers and sellers, will be discussed in detail during this session.

What is dual agency?

Having two distinct agencies A situation in which a single real estate agent or broker represents both the buyer and the seller in a real estate transaction is known as multi-family real estate. A buyer’s agent (also known as a listing agent) represents the party purchasing the house in the majority of real estate transactions, whereas a seller’s agent (also known as a listing agent) represents the party selling the home in the majority of transactions. When compared to a single agency arrangement, in which the buyer’s agent and the seller’s representative are two distinct persons who work for two different real estate organizations, dual agency arrangements are more common.

Designated agency is a notion that is related to, but slightly distinct from, designated agency.

Possible advantages of dual agency

If you’re ready to consider the option of working with two agents, it may be possible to sell your property more quickly in some situations. In the United States, the standard real estate commission is approximately 6 percent, with half of this typically going to the buyer’s agent and the other half going to the listing agent. A dual agent, on the other hand, gets to retain both sides of the commission, which might make them extremely driven to find buyers for the houses they are advertising themselves.

This is a benefit from the seller’s perspective, but it might be a disadvantage from the buyer’s one.

Furthermore, they are generally prepared to negotiate commissions with a seller who is willing to enter into a dual agency arrangement with the buyer’s agent.

For experienced buyers and sellers, dual agency can be the most advantageous option.

Why dual agency is typically not desirable

It is important to note that working with a real estate agent or real estate broker without their fiduciary obligation to you is one of the most significant advantages of dealing with them. During the course of a real estate transaction, a real estate agent is obligated to operate in the best interests of their client at all times. As an example, when negotiating the price, requesting concessions, and throughout the escrow period, your real estate agent is there to ensure that you receive the best bargain and conditions possible.

There is no ability for an agent to negotiate the best feasible deal for both the buyer and the seller at the same time in the same transaction.

Dual agents are fully neutral parties in a real estate transaction, which can be a significant disadvantage when compared to working with an agent that is completely on your side of the deal.

This sort of query is exactly the type of thing you should want your real estate agent to answer, so make sure you get a real estate agent that works only on your behalf, rather than for both sides.

In fact, dual agency is such an unattractive arrangement for the vast majority of purchasers and sellers that it is outlawed in eight states in the United States.

Dual agency can be good, but usually not for the buyer or seller

The basic lesson is that dual agency can be advantageous, but the real estate agent is often the largest benefactor. Their workload is actually reduced by half, as they are unable to attempt to execute their fiduciary duties towards either party. In exchange, they are paid twice as much as they would otherwise be. I’ve had firsthand experience with dual agency, and I’d say it was a fairly poor experience in general. We listed our first house some years ago, and our realtor informed us a few days later that he had found a buyer who was interested in purchasing the property.

  1. His buyer made an offer to us, which we accepted, and our home was put under contract a few days later.
  2. Throughout the remainder of the process, we were continuously under the impression that our best interests were not being represented by our agent (which they were not).
  3. Asked whether the amount they were requesting us to cut the price by was reasonable, our representative couldn’t provide a response; instead, he just cautioned us that pushing back too far may result in the loss of the transaction.
  4. With our first house sale, we were completely inexperienced and might have benefited from some coaching.
  5. This is a particularly bad situation for novice buyers and sellers who want expert advice in making their decisions.
  6. Briefly stated, while purchasing or selling a house, having a buyer’s agent or seller’s agent who is representing you can add a significant amount of value to the transaction.

The do’s and don’ts of dual agency

Written by Jon Gorey Some might argue that you can’t genuinely represent two sides of a real estate transaction at the same time, just as you can’t be in two places at the same time. Dual agency, on the other hand, is a situation in which a single agent represents both parties of a real estate transaction. In Barrington, Illinois, Connie Antoniou, an agent with Jameson Sotheby’s International Realty, estimates that about 20 percent of her transactions include dual agency. “Which is uncommon for me because I’m doing more of it today than ever before.” Jenny Ames, an agent with EngelVölkers in Chicago, estimates that she is a dual agent in around 10% of the deals she completes with other agents.

The fact that I know what they’re looking for means that I can get them in early. The seller’s agent also tells me that purchasers have approached her directly in the past, seeking to obtain an edge by dealing exclusively with the listed agency. Also see the following report:

Dual Agency: A tale of two markets

Hudson Santana, a Keller Williams Realtor who works in both the Boston and Miami metro regions, has a unique viewpoint on dual agency because the practice is permissible in Massachusetts but forbidden in Florida. Agents in Massachusetts can choose to represent a seller, a buyer, or both parties in a transaction – or they can simply function as a facilitator, not representing either side in a transaction. When it comes to working as a single agent representing either the buyer or seller, agents in Florida can also operate as a transaction representative.

  • Eight states have officially prohibited the practice, ranging from big markets like Texas, Florida, and Maryland to poorly populated ones like Wyoming, Alaska, and Vermont.
  • Even in states where dual agency is allowed, some agents prefer not to engage in it because they believe it creates an inherent conflict of interest — or, at the very least, the appearance of a conflict of interest.
  • This means that the agent has a legally binding commitment to work in the best interests of both clients.
  • Consequently, a dual agent’s ability to completely advocate and negotiate for one side or the other is, at the very least, constrained.
  • If I am able to operate as a dual agent, Ames believes that the process will be more efficient.

“Having a presence in two places allows me to maintain greater control and make certain that nothing is lost in translation.” When Ames reveals that she is also representing the opposing side, some clients express concern about whether she will be able to fight successfully for them, she continues (an important step).

“Our purpose is to connect buyers and sellers together in a way that is beneficial to both parties.” However, in order to get to that position without getting into trouble, agents will need to make some significant changes to their normal work methods.

The proper use of dual agency A neutral attitude on dual agency is taken by the National Association of Realtors (NAR).

“There are just a few rules, and the majority of them are concerned with disclosure and consent,” says Bruce Aydt, a Missouri-based agent and attorney who is a member and previous head of the National Association of Realtors’ Professional Standards Committee.

As Aydt explains it, “Before entering into a client relationship with them, whether it’s a seller agency agreement or a buyer agency arrangement, you must inform them of any possibility for you to function as a dual agent, as well as the conditions under which that may occur.” As for Realtors representing both buyers and sellers in a transaction, Article 1-5 stipulates that they may do so “only after full disclosure to and with informed permission of both parties,” which is the standard that most states hold realtors to as well.

As Aydt explains, “Virtually any jurisdiction that allows for dual agency will always have this concept of complete disclosure and informed consent to both parties before you can enter into dual agency.” In addition, Antoniou emphasizes the importance of continually disclosing, disclosing, and more disclosing.

  1. Not only does this not involve providing clients a boilerplate disclosure document to sign, but it also does not indicate ignoring the client’s needs.
  2. In order to protect their clients’ interests, agents must ensure that they fully understand the constraints of dual agency and what they are committing to – something that may necessitate a talk or vocal explanation alongside any state-mandated documents.
  3. “I actually read to them what I am able and unable to do to assist them.” And what is it that she is unable to do?
  4. “Confidential information of the opposite side cannot be disclosed to either party,” Aydt explains.
  5. Their discussions cannot include the motivations of the parties, as well as the negotiation stance of one or both sides, or the negotiating tactic of the other.” Agents can still provide advice to their customers based on information that is readily available to the public.
  6. The tough part is that sometimes these folks are completely reliant on you and want you to tell them what to do in every situation.
  7. Additionally, some jurisdictions authorize a close relative to serve as a dual agent, known as a designated agency or an assigned agency.
  8. In Texas, where dual agency is prohibited but serving as an intermediary is permissible, according to Richard Miranda, chair of the Houston Association of Realtors, this type of arrangement is prevalent.
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Nevertheless, in order to further reduce the possibility of a conflict of interest, “the majority of brokers in Texas will designate an agent who will serve as the buyer’s representative, and then another agent will operate in the best interests of the seller.” So, even if the broker serves as a mediator, there are two distinct parties in the same brokerage who are both seeking to further the interests of their respective clients.

  1. ” There is still the possibility of bias or the sharing of sensitive information; for example, the lead broker might exert pressure on a less experienced agent to proceed with the transaction even if their buyer want to pull out.
  2. “Even though those two agents may be working for the same broker, one party cannot disclose specific sensitive information to the other party,” Miranda explains.
  3. Even in cases when dual agency is permitted, some people favor the designated agency model above the others.
  4. As Santana explains, “I’ve never worked as a dual agent.” “I direct the buyer to a real estate agent, someone who will be representing them.
  5. And does that create a conflict, then?
  6. The two of us are no longer team members — you work for that consumer, and I work for this consumer, and they don’t have access to the information that’s vital to my client, and I don’t have access to the information that’s critical to their customer.
  7. Even after receiving a thorough explanation of what they are foregoing by not hiring a buyer’s agent, some people are adamant about not hiring one.

In order to protect the seller’s interests, “we’ll have them sign a disclaimer stating that I am the seller’s agent, which implies you are not represented by anybody and I am still representing the seller.” “You may still assist them with the paperwork – do you require me to draw out the offer?” Please tell me what you want and I will type it out for you and walk you through the process,” he says.

“I am also delighted to explain the procedures to you.” “However, I want to be quite clear that I am not representing you, and that my fiduciary obligation is solely to the seller.” And as long as you’re comfortable with that, I’m delighted to assist you in completing the deal — but I’m not acting as your agent.” When buyers or sellers choose not to use an agent, agents must still be transparent and fair with them, according to Miranda — but they owe them nothing more than that, she adds.

  • “It is my responsibility to be honest and fair,” Miranda states.
  • “However, I owe no fiduciary obligation to that particular consumer.” Dueling offers and dual representation Ames often confronts homebuyers who approach her directly as a seller’s agent in the hopes of saving money on commissions through a dual agency arrangement.
  • The possibility of commission negotiations, in Ames’s perspective, is completely off the table in a case involving competing offers.
  • She explains that if a property was sold subsequently at a cheaper price with the listed agent acting as buyer’s broker, it would appear that something unethical had taken place.
  • Her strategy is to have one Realtor represent the seller, one Realtor represent her buyer, and then the other Realtor represent their buyer, and then we just submit the contracts to my managing broker, she explains.
  • Antoniou serves on the Professional Standards Board for the state of Illinois, where he hears and judges cases involving sellers who believe they have been harmed by a real estate agent, for example.
  • The state may sometimes just place a letter in their file, stating that they were disciplined on such and such a date, and that letter will remain in the file for a number of years, according to her.
  • there are processes in place, all the way up to losing your license,” says the prosecutor.

Ultimately, she believes, “your intuition will tell you whether or not you’re doing the correct thing.” “And if you have even the least tiny doubt about a choice, comment, or advice, you should proceed with caution and avoid going in that path – trust your instincts,” says the author.

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Consider the following scenario: you decide to purchase a new house in California and contact a local real estate brokerage agency to talk with an agent. A real estate agent takes you on a tour of several homes once you’ve explained what you’re looking for. You’ll see properties that are listed for sale by other brokerage offices as well as properties that are listed for sale by the brokerage office where your agent works. The possibility exists that your agent, or at the very least the broker’s business, will be forced to operate as a “dual agent,” representing both you and the seller in the transaction.

Another example of dual agency is when you go to an open house before you’ve hired a buyer’s agent and express interest in the property, and then the agent for the seller says that writing up an offer for you will be no problem and might even save you money.

Generally speaking, a seller’s purpose is to obtain the greatest possible price for a property, whereas a buyer’s goal is to pay the lowest feasible amount for the property.

Using a dual agent may make sense in some cases, although having your own agent on your side may be preferable in other scenarios.

What Is a Dual Agent?

A dual agent is a real estate broker, or a group of agents working for the same broker, who act on behalf of both the seller and the buyer in a real estate transaction, according to the law. Only when both the buyer and the seller are aware of and consent to the dual agency relationship is a broker permitted to act as a dual agent in the state of California.

California Agents Must Disclose and Obtain Consent for Dual Agency Relationships

You must have your relationship with a real estate broker in California acknowledged in writing before you may begin working with the broker. Brokers are required to provide you with a document titled “Disclosure Regarding Real Estate Agency Relationships” at some time before you make an offer on a home, the content of which is mandated by state law (California Civil Code 2079.16). The broker and agents who were engaged in the transaction are identified on this disclosure form. It also covers the responsibilities of the seller’s agent, the buyer’s agent, and the dual agent, who is an agent who represents both the seller and the buyer at the same time.

Among these responsibilities are the duty to exercise reasonable care and skill in working for the client, the duty to be honest and to deal fairly and in good faith, and the duty to disclose all facts within the agent’s knowledge that materially affect the value or desirability of the property and of which the client is not aware, or of which the client would not become aware through diligent attention or observation, among other things.

Due to the fact that the agent may have to weigh the interests of both clients, as will be explained further below, a dual agent who attempts to act on behalf of both parties to a sale runs the danger of breaking the fiduciary obligation to operate only in the best interests of one client.

Pros of Using A Dual Agent

The following are some of the advantages of working with the same real estate broker as the seller:

  • The use of a dual agent can help to expedite the transaction. The majority of real estate agents believe that when both the buyer and the seller are represented by the same agent, paperwork and documents may be completed and signed more rapidly, as well as offers and counteroffers conveyed more swiftly. What often happens in a house selling process in California is that the buyer will create an offer with the assistance of a buyer’s agent. Afterwards, the buyer’s agency will submit this paperwork to the seller’s agent, who will then provide it to the seller for review. A dual agent will often have more knowledge about the property than an agent operating only on behalf of the buyer. When you eliminate one of the intermediaries, communication becomes faster and more efficient. When the dual agent is working with the seller, he or she gathers information on the property that the agent may then give with the prospective buyer. The buyer’s agent will not have to call the seller’s agent as frequently to acquire answers to inquiries concerning the property’s condition, which will help to expedite the transaction once again. A dual agent can be willing to accept a lower commission. Due to the fact that the dual agent is compensated for operating on behalf of both parties, buyers may have greater negotiation leverage when working with a dual representative. This is due to the fact that the dual agent may assist the buyer in crafting an offer that will be appealing to the seller. This is especially helpful when numerous buyers submit various bids on a single property
  • Dual agency inside a single brokerage firm helps streamline communication between bidders and sellers. Even though both the seller’s agent and the buyer’s agent are employed by the same real estate brokerage firm, they represent different clients. In this situation, both agents can effectively negotiate, communicate with and leverage their preexisting relationship while simultaneously advancing the interests of their respective clients.

Cons of Using A Dual Agent

Make a list of the bad or dangerous features of employing a dual agent before you are persuaded by all of the beneficial advantages of doing so:

  • Due to the fact that you have a common agent, you will not receive any special or secret information from the other side. Dual agents do not (and should not) communicate the sensitive information of the other party with one another. When working with a dual agent, you could assume that it’s a terrific idea since you’ll learn things like how low a seller is willing to sell for and what might encourage the seller to accept a lower price. Dual agents are not permitted to inform the buyer that the seller will accept an offer for less than the listing price under California law, unless and until the seller expressly consents to such disclosure. (However, unless you provide your approval, the dual agent is not permitted to divulge to the seller that you are ready to pay more for the property than you have offered to purchase it.
  • A dual agent who receives both the buyer’s and seller’s agency commissions may be too motivated to complete the transaction regardless of the circumstances. If an agent is inclined to withhold a key truth for fear of damaging the sale and missing out on a huge, double commission, this might lead to ethical (and legal) problems.
  • Each agent bears a duty of loyalty to the client, which necessitates that the agent work to further the interests of the client. In most cases, a seller’s agent is responsible for obtaining the highest and best price possible for the seller. A buyer’s agent is responsible for obtaining the lowest and most competitive price possible for the buyer’s benefit. A real estate agent who owes a duty of loyalty to two parties who have opposite, competing interests may have difficulty advancing the interests of either party, and may even end up favoring the interests of one party over another. Only a buyer’s agent can be expected to advise you on whether the listing price is reasonable
  • For his or her part, the dual agent, who initially collaborated with the seller to determine the listing price, will be more willing to defend that price. Alternatively, the seller may have utilized the seller’s agent in the past, or on several times, and so established a longtime relationship of trust and loyalty with the seller’s agent. You would likely be better served as a buyer in such a case if you retained the services of an independent real estate agent who would represent solely your interests. When a buyer approaches a seller’s agent at an open house, the agent’s primary purpose is to sell the home for the seller, not to identify the property that is the greatest match for the buyer’s needs. The employment of a dual agency might result in you missing out on the chance to have a specialized agent search for homes and represent you throughout the home-buying process
  • Dual agency also limits your legal alternatives if a problem emerges throughout the process. As a result, should you need to file a lawsuit and you worked with a dual agent, you will only have one broker’s office to sue and, as a result, only one broker’s insurance company that will step in and aid in the payment of any damages
  • However, this is not the case with a single agent.

Despite the fact that you may feel pressured to decide whether or not to accept a dual agent on short notice, don’t allow this influence your decision. It is feasible to discover a buyer’s agent that will jump into the transaction and assist you within a few hours of submitting your request. Additionally, your selection should be based in part on the specific facts of your particular business transaction. Taking advantage of dual agency may make sense in certain circumstances, such as a hot market where your broker’s office represents the home seller (but with a different agent representing the seller directly), where you’re concerned about beating out a number of other competitors, and where you’ve done enough research to have a good sense of how much the home is worth.

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