Understanding Dual Agency in Real Estate: What Buyers and Sellers Need to Know

When you buy or sell a home, one of the most important relationships you form is with your real estate agent. Typically, buyers have their own agent and sellers have theirs, each working exclusively to represent their client’s best interests. But what happens when one agent represents both sides of the transaction? That’s where dual agency comes in.

What Is Dual Agency?

Dual agency occurs when a single real estate agent—or sometimes a single brokerage—represents both the buyer and the seller in the same real estate transaction. Instead of having two professionals negotiating for their clients, one person (or brokerage) acts on behalf of both parties.

This setup can happen intentionally, when both parties agree to use the same agent, or unintentionally, when a buyer falls in love with a property listed by their agent. While dual agency is legal in many states, it’s tightly regulated and, in some areas, prohibited.

The Potential Advantages of Dual Agency

For some buyers and sellers, dual agency can offer benefits:

• Simplified Communication: With one agent handling the deal, information flows more directly. There’s less back-and-forth between multiple agents.

• Faster Transactions: Because everything is managed under one roof, paperwork, showings, and negotiations can sometimes move more quickly.

• Potential Cost Savings: Sellers may negotiate a reduced commission since the agent doesn’t have to split fees with another agent.

The Challenges and Risks of Dual Agency

While dual agency might sound convenient, it does come with potential drawbacks. The biggest concern is conflict of interest. An agent’s duty is to advocate fiercely for their client. When representing both sides, the agent cannot fully negotiate in favor of either party. Instead, they must remain neutral.

Some of the key challenges include:

• Limited Advocacy: An agent cannot push too hard for a better price for the seller or negotiate aggressively for concessions for the buyer.

• Confidentiality Issues: It can be difficult for an agent to protect sensitive information, like the buyer’s maximum budget or the seller’s bottom line.

• Trust Concerns: Both parties may wonder whether the agent is truly acting in their best interests.

Disclosure Requirements

In states where dual agency is allowed, agents are typically required to disclose the arrangement to both buyer and seller. This ensures both parties understand that the agent’s role will be more limited compared to a traditional transaction. Buyers and sellers must provide informed consent—often in writing—before dual agency can proceed.

Should You Agree to Dual Agency?

The decision ultimately depends on your comfort level and the specifics of the transaction. If you value simplicity and already trust your agent deeply, dual agency may feel like a good fit. However, if you want a strong advocate fighting exclusively for your side, it may be better to have separate representation.

Final Thoughts

Dual agency in real estate is a unique arrangement that comes with both benefits and risks. Understanding how it works is crucial before you agree to it. Always ask your agent to clearly explain what dual agency means in your state, what limitations exist, and how it may affect your buying or selling strategy.

By making an informed choice, you’ll ensure that your real estate journey aligns with your best interests—whether you choose the convenience of dual agency or the dedicated advocacy of separate agents.