Q. I am totally confused by dual agency, can you explain it?
A. Dual agency is the most commonly misunderstood real estate relationship. In dual agency, an agent represents both buyer and seller in the same transaction, such as when an agent sells his buyer his own listing.
The part of this arrangement that confuses people is that an agent representing both buyer and seller becomes a neutral party. They cannot advocate or seek an advantage for either client. They must be extremely careful about what they say to each party.
They legally cannot share the other party’s confidential information so as not to create an advantage on one side or the other. They must represent both equally and fairly. Dual agency must be fully disclosed in writing and consensual by both parties.
There are some benefits, however – the paperwork can move a little faster, the agent may work for a reduced commission, and communication can be more efficient.
In reality there is no distinct advantage to either the buyer or seller to dual agency, but there can be significant problems if all parties do not clearly understand the implications of this arrangement.
The very basics of dual agency make it impossible to serve clients in the best way possible, which is why more and more states are doing away with it.
The only clear advantage is to the agent who makes more money in the transaction by getting a commission on both sides of the deal.
I’d be more than happy to discuss this further with you and answer any questions you may have. Just give me a call.