Dual Agency
Definition and meaning of Dual Agency in real estate.
Dual agency is a real estate transaction arrangement in which a single real estate brokerage represents both the buyer and the seller. This setup can involve a single agent representing both parties or two agents from the same firm.
In more detail
Because a real estate broker's fiduciary duty is to act in the best interest of their client, dual agency creates a potential conflict of interest. The broker cannot advocate fully for either party or negotiate terms like price or repairs without bias. In many states, dual agency is heavily restricted, requiring written, informed consent from both the buyer and the seller.
A few states ban the practice entirely to protect consumers, requiring agents to transition to transaction coordinators or non-agent facilitators.
Key facts
| Category | Buying & Selling |
|---|---|
| Legal Status | Banned in several states, regulated in others |
| Disclosure Requirement | Written, informed consent from both parties |
| Primary Risk | Reduced ability for the agent to negotiate aggressively |
A buyer walks into an open house and asks the listing agent to write an offer to purchase the home, resulting in the agent representing both parties in the sale.
Frequently asked questions
Why do buyers or sellers agree to dual agency?
Some parties believe it simplifies communication and speeds up the transaction, while others hope the broker might offer a reduced commission.
What can a dual agent disclose?
A dual agent can share factual property information but cannot disclose confidential details, such as the minimum price the seller will accept or the maximum price the buyer will pay.
Is dual agency the same as designated agency?
No, in designated agency, the broker assigns one agent to represent the buyer and another to represent the seller, though both work for the same firm.