The Perils of Dual Agency in Your Real Estate Transaction


Dual Agency- when a real estate broker is representing both the buyer and the seller in a sale. As of now, it is legal as long as disclosed properly.  In my opinion, based on more than 20 years as a practicing attorney and broker, this is a terrible practice and clients should not consider carefully before putting themselves into this situation.


As a broker, when I list your home for sale, my job is to get you the highest price and the best terms. When I represent you as a buyer, my goal is to get the lowest price and the best terms for you.  If I were to represent both of these clients at the same time, at least one and maybe both clients lose. Obviously, I can’t get the seller the highest price, while simultaneously getting a buyer the lowest price. Impossible. The best I can do is shift from your advocate to a mediator, and I think you deserve me to be your advocate.


Because this practice is legal (although, based on a trend in court decisions, it may not always be), many agents will represent both sides, and even try to convince you that it’s good for you. It’s not. (It’s good for the agent who makes double commission!) Some brokerages already do have policies against it.  There are many good agents who sincerely try to do the right thing for both clients despite the unavoidable conflict of interest. This agent will market the property with integrity, seek offers from all potential buyers, ones they represent and ones represented by others. They will present all offers to the Seller and base their advice on the qualifications and offer terms of each buyer rather than how much money they will earn if the Seller picks their own buyer! They will show their buyers properties that would be good for them, regardless of whose listings they are. They will carefully juggle the responsibility of negotiations to not disclose what either side is willing to do to make the deal. They will try to not go to push the deal through when it is not in the best interest of the client. However, even honest agents are human, and may be more influenced by divided duties of loyalty and a larger paycheck than they realize.


Now for the worst case scenarios, sadly prevalent in this cutthroat business of real estate. There are agents who discourage offers from buyers other than their own in order to ensure they won’t have to share the commission. Some fail to submit offers to their clients- even harder to catch are the agents that simply don’t return calls from other agents, waiting for the buyer without an agent that they can represent. It’s not over once the offer is accepted- you may face pressure to make repairs or accept conditions that may not be in your best interest.  Meanwhile, are you truly comfortable having your agent know your bottom line price, or will you be afraid it will be used against you in the negotiation, even subconsciously? All things to consider.


What can you do to protect yourself? Before entering into the broker-client relationship, ask the broker about their position on dual representation. Ask them to agree to forego representation of whoever will be on the other side of your negotiating table so that you can 100% confident that their loyalty is to you alone. It’s really what you deserve, so don’t settle for less!