What Is Dual Agency In Real Estate?

Kyle Hiscock
Published on September 13, 2016

What Is Dual Agency In Real Estate?

Pros and Cons Of Dual Agency

What Is Dual Agency In Real Estate

What Is Dual Agency In Real Estate

There are many reasons why hiring a real estate agent whether buying or selling a home is a very good idea.  The majority of real estate transactions include a buyer, a seller, a buyers agent, and a sellers agent.

Depending on which state you’re located in, it’s possible you may encounter a potential scenario where the same real estate agent or company represents both the buyer and the seller.  This scenario is known as dual agency.  One great question to ask real estate agents when selling or buying a home is whether or not they work as a dual agent.

If an agent indicates that they do work as a dual agent, you need to be aware of the pros and cons.  Read on to find out what the pros and cons of dual agency in real estate are.  It’s important that if dual agency is allowed in your state and your real estate agent does work as a dual agent that you understand what dual agency is and also what the positives and negatives are to this scenario.

What Is Dual Agency In Real Estate?

A real estate broker may represent both the buyer and seller if both parties give their informed consent in writing.  n such a dual agency situation, the agent will not be able to provide the full range of fiduciary duties to the buyer and seller.

The obligations of an agent are also subject to any specific provisions set forth in an agreement between the agent, and the buyer and seller.  An agent acting as a dual agent must explain carefully to both the buyer and the sellers that the agent is acting for the other party as well.  The agent should also explain the possible effects of dual representation, including that by consenting to the dual agency relationship the buyer and sellers are giving up their right to undivided loyalty.

There is also the potential scenario of a dual agent with designated sales agents, which is when two real estate agents work for the same company but each agent is appointed to represent their respective client, either the buyer or the seller.

It’s important to note that dual agency is not legal in some states.  This is mainly because dual agency is sometimes viewed as a conflict of interest, even though Realtors® are held to a strict Realtor® code of ethics.  It’s important before getting involved in buying or selling a home that you find out if dual agency is a potential scenario you may encounter.  The best way to find out if dual agency is legal or not is to ask an experienced real estate agent.

Pros Of Dual Agency In Real Estate

PROs To Using A Dual Agent When Buying Or Selling A Home

PROs To Using A Dual Agent When Buying Or Selling A Home

If you’re thinking about getting involved in a real estate transaction where dual agency exists, you’ll want to know what the benefits are to this.  Below are some of the great benefits of working with a dual agent when buying or selling a home.

Smooth and Efficient Real Estate Transaction

Generally speaking, when dual agency exists the real estate transaction will be very smooth, which is a huge benefit to both a buyer and seller.  There are many reasons why real estate transactions fall apart and one of the biggest culprits is the lack of communication between real estate agents.

When one agent or the brokerage is working with both the buyer and the seller, the chance of missed deadlines, missing documents, or delays in closing greatly reduces.  For example, if one real estate agent is working for both the buyer and the seller and a document needs to be signed by both parties, the dual agent has total control of how long it takes to get the document signed.

Full Disclosure

Real estate professionals are required to disclose all important information when they’re representing a buyer or a seller.  Not disclosing important information can get a real estate professional in big trouble but some real estate professionals still decide to not provide full disclosure or do not have the ability to do so.

One benefit of dual agency in real estate is that the chances of getting full disclosure greatly improves.  If a real estate agent is representing a seller and they share important information about the home, they’re required to disclose this to the buyer.  In the case of a buyers agent and a sellers agent, it’s possible the buyers agent never finds out about this information and it goes without being shared.

Potential Savings

When a Realtor® is working as a dual agent, there is a possibility that both the buyer and seller can save some money.  It’s extremely important to remember, real estate brokerage fees are negotiable.

Real estate brokerage fees in most cases are shared between a buyers agent and a sellers agent, so when the scenario of dual agency exists, the same agent or company receives the whole amount.  Dual agents are more inclined to reduce the amount of brokerage fees because they don’t have to share with another agent or company.

For a seller, using a dual agent may lead to a reduced percentage or dollar amount of brokerage fees.  For a buyer, this could mean a reduced sale price because the dual agent is able to adjust the amount of brokerage fees which impacts a sellers bottom line.

Cons Of Dual Agency In Real Estate

Is Dual Agency In Real Estate Risky - Find Out The Potential Drawbacks Of Dual Agency Inside

Is Dual Agency In Real Estate Risky – Find Out The Potential Drawbacks Of Dual Agency Inside

Before entering into a real estate transaction where dual agency exists, it’s vital to understand what the potential drawbacks are.  Below are some of the cons of dual agency in real estate when buying or selling a home.

Greedy Real Estate Agents

There are some real estate agents that will say and do anything to make a deal.  One of the potential drawbacks of dual agency in real estate is that some agents will do whatever it takes to make a deal because they are receiving the entire brokerage fee.

It’s important that if you’re entering into a dual agency situation, you know what some of the common lies real estate agents tell.  If you don’t like the idea that you may not be told the truth or it may feel like an agent is saying whatever it takes to make a deal, you need to avoid dual agency.

Restricted Showings

A sellers agent is to utilize the best real estate marketing strategies to provide their clients home maximum exposure to secure top dollar.  Another negative of dual agency for a seller is that the dual agent may restrict showings in order to reduce the competition for the buyers offer.

By restricting showings, the dual agent eliminates the chance another buyer is able to make an offer on the property unless they are willing to do site unseen.  This doesn’t help a seller receive the most amount of money for their home, in fact, it could be costing them thousands of dollars.

Lack Of Advice

Whether buying or selling a home, receiving good advice from a real estate agent is very important.  One of the biggest reasons why FSBOs fail in real estate is because they aren’t receiving quality advice.  One of the biggest drawbacks of dual agency is there is often a lack of advice being provided.

For example, if a dual agent is presenting an offer to a seller, they may not suggest they counter the offer if it’s low.  Lack of advice may also apply for a buyer when determining how much to offer for a home.  The dual agent may not recommend a fair market value when writing a purchase offer.

Final Thoughts

Dual agency is not for everyone.  Before you agree to work with an agent, you need to know whether or not they practice dual agency.  If you’re not comfortable with working with an agent who practices dual agency, don’t hire them.

It’s vital to keep in mind that some agents are great dual agents.  There are some real estate agents who strictly follow the code of ethics and can be trusted as a dual agent.

If your state allows dual agency, you’ll likely be required to sign documentation agreeing to dual agency.  Understanding the pros and cons of dual agency in real estate will help you make the determination as to whether or not you’re comfortable with it.

Other Dual Agency Articles & Resources


Are you looking to buy or sell a home in Rochester NY?  If so, you need to be aware of dual agency because it is legal in New York State.  The above pros and cons to dual agency in real estate will help you determine if it’s the right fit or not for you.  If you’re unsure, contact me, and I’d love to sit down and discuss dual agency in detail.

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About the authors: The above article “What Is Dual Agency In Real Estate?” was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise.

We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.

© 2016, Kyle Hiscock. All rights reserved.

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