By: Chrystal Caruthers for Realtor.com
When a buyer is represented by the same brokerage firm that has the listing, it is called dual agency. When one agent represents both the buyer and the seller in one transaction, it is also called dual agency.
In many states, dual agency is illegal: it can be a conflict of interest that best serves the broker.
REALTORS® have a responsibility to inform clients of potential conflicts of interest. REALTORS® cannot legally work both sides of a transaction without informed consent.
If you are selling your house and you don’t want your REALTOR® also working with the buyer, you have a right to specify that in the listing agreement. The same is true for buyers: a buyer can opt out of a buyer agency agreement if their buyer agent also has a listing the buyer is interested in purchasing.
There are pros and cons to dual agency. Every client has a different tolerance level and different expectations. Here are some ways in which dual agency could work.
Dual Agency Pros for the Seller
- You already know and trust your listing agent—so you know if he also represents the buyer, your transaction will be handled efficiently.
- Your listing agent has cornered the market in your neighborhood and therefore gets lots of buyer inquiries. Having your agent work both sides of the deal gives added incentive to sell your house quickly.
- Your agent brought the buyer to you knowing you’ve been thinking about selling your house—but it’s not on the market yet.
- Your agent is working with a corporate relocation buyer who needs to find a house quickly—and your house fits the bill.
Dual Agency Cons for the Seller
- Your agent cannot advise you as thoroughly when acting as a dual agent. Impartial facilitation is required.
- The opportunity to earn the full commission might tempt an agent to coerce a deal you would not otherwise accept.
- Your listing agent cannot negotiate the highest and best price for you if also negotiating the lowest and best terms for the buyer.
- Your agent might inhibit access to your listing by other agents with buyers.
Remember, every real estate transaction is different. The best way to ensure you are properly represented is to clarify your relationship with your agent either through a listing agreement or an exclusive buyer agency agreement.
Once everyone’s roles are outlined, there is little room for surprises—even with dual agency.
