Dual Agency in Real Estate is a Conflict of Interest

Why Dual Agency Does Not Benefit Buyers or Sellers

When buying or selling a home, most people look to have representation by a real estate agent. If you are purchasing a home, you want a buyer’s agent.

Likewise, if you are selling a home, you want a seller’s agent.

Your agent is there to protect your best interests. They will become your trusted advisor throughout the sale. He or she is your guide from start to finish, beholden only to you.

So when you need a question answered and desire some expertise, they are there for you!

Sounds like how things should work right? Well, that is not always the case if you let it happen. Yes, there is another dark side of real estate sales.

The third option that real estate agents can practice is called dual agency. If you are smart, you’ll avoid dual agency at all costs.

Why? With dual agency, the agent that you hired to be your representative becomes a neutral party in the transaction.

They are no longer looking out for your best interests. They can’t even give you any advice. Doing so becomes a conflict of interest.

It is like being punched in the mouth by the person you hired to provide you with real estate expertise.

What exactly does that entail in the real world? It means the agent you hired must be silent when it comes to answering any kind of question that conflicts with the other party.

To explain further,  when you find a home you would like to make an offer on and ask your real estate agent what your offer should be, by law they are not able to help you. To do so would be illegal.

On the flip side, if you are selling a home and a buyer makes an offer, your agent is also not allowed to offer you any counseling.

Imagine for a moment – you hire an agent thousands of dollars, and they are not able to give you any advice. Makes a lot of sense right? Of course not!

Dual agency is a complete scam. Many states have in fact banned it.

Dual agency happens when one agent works with both the buyer and seller in the same transaction.

Guess who benefits from dual agency? If your answer is the real estate agent, you would be correct. The only party who benefits from dual agency is the Realtor. Both the buyer and seller are left to fend for themselves.

The lack of representation doesn’t stop at the offer either.

To take the downside of dual agency one step further wait till you get to the home inspection.

If you are the buyer or the seller don’t expect the real estate agent to counsel you at this phase of the transaction either – they can’t!

When a real estate agent practices dual agency they become a neutral party but get paid double. Is there any wonder so many real estate agents will tell you dual agency is perfectly acceptable?

While Dual agency has been banned in some states, in many, it is still an acceptable practice.  Just because it is legal doesn’t mean you should accept it!

Real Estate agents are required by law to explain dual agency to both a buyer or a seller. One of the significant problems, however, is the real estate agent has a vested interest in you accepting it.

Guess how they explain dual agency? Certainly not like I just did by giving you the truth! They will say there is nothing wrong with it. You’ll be sitting at your kitchen table hearing the agents presentation and dual agency will sound all rosy.

They might even breeze past it altogether.

Dual Agency Usually Starts With The Seller

More often than not dual agency starts with a seller. If you are going to be selling your home, make sure you reject dual agency outright. Tell your real estate agent you only want them to work for you.

Remember you are paying them a ton of money to sell your property. Why on earth would you want them to become a neutral party?

To be clear your real estate agent can still show a buyer your home and remain a seller’s agent. They do not have to become a dual agent.

The smart thing to do is insist that your agent represent you and you only.

If your agent happens to procure a buyer they can refer the buyer to another agent in their office who can assist them.

In the link at the top of the article, you will see exactly how dual agency works at Maximum Real Estate Exposure.

Make sure you understand it completely. Dual agency does nothing to benefit you.

Other Helpful Resources on Dual Agency

Use these additional references to educate yourself of the downsides of dual agency. Never let a real estate agent talk you into this awful practice.


What do you think?

101 Points

Written by Bill Gassett

One of the top RE/MAX Real Estate Agents in New England over the last two decades. I love helping sellers and buyers achieve their real estate goals.

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