What is Dual Agency: Why Buyers and Sellers Should Avoid It


Real estate agents are trained to represent buyers and sellers. In a standard transaction, there is one agent representing the buyer and a second agent representing the seller. The two agents are usually the ones who do the negotiating on behalf of their clients, and the two agents often find themselves in the middle of conflicts that can slow down the selling process.

Most people do not realize that it is possible to have one agent represent the buyer and the seller. This situation is referred to as a dual agency, and it is something that buyers and sellers want to be aware of and understand before they allow the situation to exist.

What Must Happen

When a buyer or seller takes on a real estate agent, there is a contract between the two parties that outlines all of the details, including commission. In order for a dual agency situation to take place, the buyer and seller must sign a singular agreement that allows one agent to represent both parties.

Is a Dual Agency Situation Good?

There can be an argument that a dual agency situation is convenient for both parties because there is only one agent. But the reality is that there are restraints on the one agent in a dual agency situation that make it a bad arrangement for the buyer and the seller.

Commissions are the Same

The buyer and seller might think that they are saving money by having only one real estate agent, but that is not the case. The real estate agent in a dual agency situation collects a standard commission from the buyer and the seller, which means that there is not a whole lot of motivation for the agent to get a good deal for either party.

The Process is Sterile

When a buyer and seller allow an agent to be in a dual agency situation, the agent is no longer allowed to work on behalf of either party. The agent cannot negotiate a better price for either party, and the agent is no longer allowed to get involved in any disputes between the parties. In a dual agency situation, the agent essentially turns into a middleman who processes paperwork.

The End Result

In a dual agency situation, neither the buyer nor the seller is having their best interests preserved. If the two parties get into a disagreement about one part of the sale, then the entire process can be stalled until the two parties actually speak to each other and solve the problem. With a dual agency, no one gets the best deal and no one gets professional representation.

If a real estate agent suggests a dual agency situation, it is a good idea for the buyer and seller to find new agents and put together a standard sales structure. A dual agency agent is not going to be interested in what either party wants out of the deal. The primary concern of a dual agent is collecting two commissions for doing half of the work.

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