What is Dual Agency

Homebuyers and home sellers are two different sides of a home transaction. Should they have their own agent representing them? The norm says yes, but it isn’t always the case, so it depends.

The old adage “you can’t have your cake and eat it too” seems like the right thing to say here, but whoever said that never tried eating a little now and saving some for later. We sometimes have multiple options and have a difficult time choosing between two good ones. In real estate, dual agency breaks the cake rule. It may just happen that your agent is also the listing agent of the home you want to buy. If this is the case, you don’t need to find a new agent; you can keep your agent and get the house too!

More often than not in real estate each party has their own agent representing them. If it’s a dual agency case the agent gets both sides of the deal and keeps the entire commission. It also happens when agents from the same brokerage represent each party. There are surely pros and cons of dual agency, just like any scenario that is too good to be true.

Pro: Fast communication

If an agent represents both parties, they don’t have to wait to hear back from the other party every time communication needs to happen. Streamlined communication makes for a faster transaction because the agent is in control of both sides, and should know what each party is looking for. Motivated dual agents won’t be missing deadlines, or fail to perform their duties if they are looking at the entire commission check.

Con: No advice

This situation can often be a problem, conflict-of-interest. IF the seller wants the highest amount they can get, while the buyer wants the lowest amount they can spend, the agent cannot take sides, or give their advice. This situation is often like one lawyer defending both husband and wife during a divorce.

If price is a problem in this case, the agent must become more of a moderator instead of a coach. They have to withhold some confidential information to some parties, while making sure they don’t find themselves leaning towards one party. At this point, they must remain neutral and let the seller and buyer do the negotiating.

Pro: Full disclosure

Do not feat dual agency, because as long as you don’t agree to it, it won’t happen. In order for dual agency to be the practice, both parties must know and consent to it.

Con: No checks and balances

Odds are the more eyes you have one something the less will be missed. What that means is that with one agent handling all the paper work, they could miss something, maybe important. If they do happen to miss something, it is all on the agent. Having the power of checks and balances also prevents one side from becoming too powerful, and that often happens with unethical agents.

Pro: More possible access to properties

Keep in mind that dual agency isn’t only the same agent for both parties, but also both parties being represented by the same brokerage. Having the same brokerage most likely means there are two agents, and they may not even know one another. If they don’t happen to know one another, and the selling agent has hundreds of leads for buyers, and the seller declines dual agency, they just pushed themselves out of hundreds of potential offers. Now the sellers’ pool of buyers just shrank significantly. If the buyer declines dual agency, they could miss out on the dream home.

Con: It can get confusing

Dual agency is a tricky part of the real estate game, and mistakes can be made easily. Sometimes agents can get greedy and show favor towards one party over the other, but that’s why you need to make sure you’ve got a good agent. Some states have even outlawed dual agency to stop conflict-of-interest all together.

Pro: Saves money

Sellers pay a commission to their agent who then in turn gives part of the commission to the buyer’s agent. When there is only one agent, you could end up paying less, or the brokerage could be willing to take lower fees since they are already getting twice the action. If the seller is saving money, they could give some of the buyer their savings.

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