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What Is Dual Agency?

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Dual agency is when a single real estate agent represents both the buyer and the seller in a real estate transaction. It can also occur when the same real estate company represents both parties in a purchase and sale or rental transaction.

When someone hires a real estate agent, they have the opportunity to decide whether they want to work with a dual agent, and they fully understand the trade-offs of doing so. The agent asks any client who says they’re fine with dual agency to sign an official disclosure from the state department of real estate.

The question is whether a dual agent can truly be neutral when facilitating a transaction where they represent both the buyer and the seller. That’s mainly because the seller will want to sell their home for the highest price possible while the buyer will want to pay the lowest price.

Some real estate agents say dual agency isn’t a problem and can even benefit both parties by speeding up communications and helping the transaction close faster.

Dual agency can sometimes be hard to avoid when:

  • A large real estate agency has hundreds of agents working in the same area.
  • A small area has few agents.

Dual agency can also sometimes happen without the buyer realizing it like for: New construction, An open house, and Online listings. In all of these the agent represents the seller. 

Pros

  • Faster communication: When one agent represents both sides of a real estate transaction, there can be less of a delay in price negotiations or getting the answer to a question
  • Possible savings: An agent who stands to earn a double commission might be willing to accept a lower commission. The seller, buyer and agent could all benefit from the arrangement.
  • More knowledge of the property: From a buyer’s or tenant’s perspective, using the seller’s or landlord’s agent could mean gaining access to more information about the home.

Cons

  • Conflict of interest: This is the biggest drawback to dual agency and the reason why some states ban it. Clients have to look out for their own best interests. 
  • Tricky negotiations: An agent who represents parties with opposite interests can’t advocate for either. This again leaves the client on to make decisions on their own. 

Bottom line is, dual agency only works if you are working with a highly ethical agent that is able to manage both parties’ expectations, and if both parties are experienced, and are able to negotiate for and understand the real estate process. 

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