Dual Agency

Dual Agency occurs when a single real estate agent or brokerage represents both the buyer and the seller in the same real estate transaction. This arrangement can potentially streamline the process, as one entity handles all the communications and negotiations. However, it can also present significant conflicts of interest, as the agent or brokerage must remain neutral and cannot advocate for the best interests of either party exclusively. In many regions, specific disclosures and agreements are required to ensure both parties are fully aware of the dual agency and consent to it. Laws and regulations regarding dual agency vary by state and country, so it is essential for all parties involved to understand their rights and obligations before entering into such an agreement.

Common Applications

Residential Real Estate

Dual agency is frequently encountered in residential real estate transactions, particularly in scenarios where a buyer is interested in a property listed by their own agent’s brokerage.

Commercial Real Estate

Though less common, dual agency can also occur in commercial real estate transactions, where a brokerage represents both parties in the sale or lease of commercial properties.

Safety Considerations

Conflict of Interest

The most significant safety consideration is the potential for a conflict of interest. The agent must balance the interests of both parties without favoring one over the other.

Legal Compliance

Agents and brokerages must adhere to state and local laws regarding dual agency, including any requirements for disclosures and written consent from both parties.

Informed Consent

Both the buyer and seller should fully understand what dual agency entails and how it might impact the transaction. Ensuring informed consent is critical to protecting all parties involved.

Related Terms or Concepts

Single Agency

An arrangement where an agent or brokerage represents only one party in a transaction, either the buyer or the seller, but not both.

Designated Agency

A situation where two agents from the same brokerage represent the buyer and seller separately, thus avoiding dual agency while remaining within the same brokerage.

Transactional Brokerage

A model where the agent or brokerage provides services to both parties in a transaction without representing either party in a fiduciary capacity. This is sometimes considered an alternative to dual agency.