The vast majority of real estate transactions involve two agents, one for the buyer and another for the seller. This is simply due to the nature of home-buying and selling. The person looking for a home has an agent helping them find and tour listings, while the person selling has an agent advertising and showing their home.

With dual agency, however, both the buyer and seller are represented by the same agent. It may sound surprising, but dual agency is at play in roughly 10% to 20% of home sales. This can happen out of a desire for convenience or even by accident. For the real estate agent, dual agency means a bigger payout because they don’t have to split the commission with another realtor.

Is using a dual agent a good idea for the buyer and/or seller? This article will cover everything you need to know about dual agency, including its pros and cons.

How Does Dual Agency Work?

You might be wondering how dual agency deals come about. Here are a few examples to illustrate how this sort of situation starts.

For example, imagine a realtor is helping a seller put their home on the market, and also happens to have a client interested in the listing. That's one way a coincidence can lead to dual agency. This is also prevalent when it concerns different realtors who are a part of the same brokerage.

Another example is when a realtor is hosting an open house for their client and has interest from someone who walks in unrepresented. If they don’t want to find their own real estate agent, both parties may agree to move forward being represented by the same realtor.

Dual agency can even take place without people realizing it. This is especially true when it comes to new construction. When you visit the sales office for a new housing development, the agent is representing the seller and the buyer. While a buyer in this situation does have the option of hiring their own realtor, some people don’t even realize it, or they simply decide to go with the agent who is already familiar with the development.

Is Dual Agency Legal?

There are often ethical questions surrounding dual agency, as it may seem impossible for one person to operate in the best interests of two separate parties.

In a perfect scenario, both the home buyer and seller are aware of the pros and cons, and they might even sign a disclosure agreeing to the arrangement. Unfortunately, these disclosures aren’t required in every state.

Due to the conflict-of-interest concerns that come with dual agency, the practice is actually illegal in several states, including:

• Alaska
• Colorado
• Florida
• Kansas
• Maryland
• Oklahoma
• Texas
• Vermont
• Wyoming

Pros and Cons of Working With a Dual Agent

Now that you know what dual agency is and whether it’s legal in your state, it’s time to consider your options. Here are the pros and cons to think about as you make a decision.

Pros

Streamlined communication: Some people notice that dual agency lends itself to quicker communication and a more streamlined transaction. This is largely due to the fact that it’s one real estate agent in charge of every form and document. Plus, when the buyer or seller has a question, there are fewer people to go through to get an answer from the other party.

Access to more details and information: For a buyer, the dual agent likely has much more knowledge about the home because they’ve been hired to sell it. Likewise, they know what’s important to the buyer and where they may or may not be willing to compromise. Assuming that everything goes smoothly with the lender, this may pave the way for a faster closing timeline.

Savings for sellers: When it comes to commission, there is potential for savings in a dual agency situation. Because the realtor won’t have to split the commission with another agent, they’re more likely to lower the fee by a percentage point or two. In turn, if you’re selling your home, you may be willing to accept a slightly lower sale price if you’re saving on commission fees. In these situations, all three parties may benefit from dual agency.

Cons

Conflict of interest issues: Whether you’re buying or selling, your real estate agent is usually concerned with what’s best for you. If you’re buying, a traditional buyer's agent will do everything they can to negotiate the price you want to help you stay within a target budget. Unfortunately, when the realtor is representing both sides, there is typically going to be a lack of transparency, as they’re looking out for both the buyer and the seller.

Added stress for your agent: There is no doubt that real estate transactions come with a lot of paperwork, communication, and negotiating. For an agent working on both sides, this can be a large burden. While it’s certainly possible, you may notice that a dual agent has a lot on their plate while facilitating this type of sale.

Fewer checks and balances: In a traditional set-up where the buyer and seller have their respective realtors, there are more eyes on each document. If there’s an error made by one real estate agent, the other one may notice it while going to their client for a signature. When there is just one dual agent, there are simply fewer checks and balances. This may lead to more room for error.

Is Dual Agency the Right Choice for You?

Deciding whether dual agency is right for you is a personal choice. It can be tempting to move forward with any arrangement when you’re eager to buy or sell, but it’s important to weigh your options.

If you're able to find a real estate agent you believe will be fair and balanced, even in a dual agency situation, it may work for you. Alternatively, many people feel more comfortable with an agent who is dedicated to them and acting with their best interests in mind.