What is dual agency and should you play a part in it?
The term agency refers to what is owed to you if you are engaging with a licensed real estate agent during the process of buying or selling a house. Per their license, the agent has a duty to represent you as their client. This is beneficial for you the consumer because you can expect a certain level of care, attention, and fiduciary duty from your real estate agent.
With dual agency, one agent works for both the buyer and seller — and keeps the full commission.
Dual agency often happens in the higher end residential real estate market.
Should you engage in a transaction that is providing dual services to both customers?
Ultimately, this choice is up to you. My personal opinion is that dual agency is not the best way to transact real estate in this day and age. Here are a few reasons why…
- When I represent a buyer or seller, there is certain information I know about them that would not be helpful if the other party knew. For example, if I know a seller’s bottom line price for negotiation, this is not good information to leak out to the buyer.
- For the agent, it can be hard to not share information between parties if it will ultimately close a deal faster. So in this situation, it is hard for the buyer and seller to know if they are getting provided with 100% agency duty.
- It is a gray area, and there are a lot of ways that a dual agency deal can go sideways.
If a buyer and a seller bring you— the agent, a deal that is already signed off on and that just needs to be put together, it could actually be helpful to be the one agent to tie the pieces together.
The Bottom Line
In my opinion, the best case scenario is using buyer agency, so that each agent has its own respective clients. Buyer agency is where a buyer can engage a real estate agent and provide everything for solely the buyer, separately from the seller. This is how both parties can have the best representation possible.