Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations. Show Oftentimes, a homebuyer and seller have a different real estate agent, but in 10% to 20% of home sales, both parties have the same agent. However, this practice, called dual agency, can sometimes create more conflicts of interest since they’re not supposed to lean more toward the best interest of either the buyer or the seller. More than half of homebuyers and sellers don’t realize that there are different types of agencies, according to a 2019 report from the Consumer Federation of America, a research, advocacy and educational organization based in Washington, DC. What’s more, some consumers don’t know whether an agent is required to represent their best interests. To clear the air, here are details on what a dual agency is, and how it works. What Is Dual Agency?Dual agency is when a single real estate agent represents both the buyer and the seller in a real estate transaction. It can also occur when an agent represents both the landlord and the tenant, or when the same real estate company represents both parties in a purchase and sale or rental transaction. Single agency is when an agent represents only one party. A different agent who works for a different company represents the other party. Single agency allows an agent to act in their client’s best interest without conflict. How Does Dual Agency Work?Here’s how dual agency works in an ideal world. When someone hires a real estate agent, they have the opportunity to decide whether they want to work with a dual agent, and they fully understand the trade-offs of doing so. The agent asks any client who says they’re fine with dual agency to sign an official disclosure from the state department of real estate. Unfortunately, not all states require such disclosures at the beginning of an agent-client relationship. Even when they do, these forms aren’t always written in plain language, or easily understandable or readable. Clients don’t have to agree to dual agency. In fact, a dual agency is even illegal or heavily restricted in eight states:
In some of these states, agents can’t even allow dual agency to happen by accident. This can happen in a case where someone finds a home online that they want to purchase, but that home is listed for sale by the same agent they’ve hired to represent them as a buyer. When to Consider Dual AgencySome real estate professionals and consumer advocates say you should never consider dual agency. They question whether a dual agent can truly be neutral when facilitating a transaction where they represent both the buyer and the seller. That’s mainly because the seller will want to sell their home for the highest price possible while the buyer will want to pay the lowest price. Other real estate agents say dual agency isn’t a problem and can even benefit both parties by speeding up communications and helping the transaction close faster. There are other points to note, however. Dual agency can sometimes be hard to avoid when:
Dual agency can also sometimes happen without the buyer realizing it like for:
Pros and Cons of Dual AgencyState laws about when agents have to disclose dual agency, and whether they have to disclose it orally or in writing can leave home buyers and sellers uninformed. Plus, some agents may not follow the rules. To limit the possibility of undisclosed dual agency, ask your agent as soon as possible whether they will be working only for you as a single agent or whether they are working, or might work, as a dual agent who also represents the other party. Don’t wait until closing to find out. As a consumer considering dual agency, these are the pros and cons you should be aware of before making a decision. Pros
Cons
Which of the following is a dual agency situation?Dual agency is when a single real estate agent represents both the buyer and the seller in a real estate transaction. It can also occur when an agent represents both the landlord and the tenant, or when the same real estate company represents both parties in a purchase and sale or rental transaction.
What is a dual agent?A dual agent is an individual who acts as both the buyer's and seller's agent in a transaction. It is easy to confuse dual agents with designated agents. But unlike a dual agent, designated agents are two separate individuals representing the buyer or the seller.
Is dual agency allowed in Mass?In Massachusetts Disclosed Dual Agency is legal, provided there exists full disclosure and written informed consent to the dual agency by both the Buyer and the Seller in a specific transaction. A Dual Agent has a duty of confidentiality and accounting to both parties.
Is the broker ever a dual agent in Tennessee?A managing broker providing services under the provisions of the Tennessee Real Estate Broker License Act of 1973 shall not be considered a dual agent if any individual licensee so appointed as designated agent in a transaction, by specific appointment or by written company policy, does not represent interests of any ...
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