realtor handing keys to couple

What Is Dual Agency in Real Estate and How Does It Work?

In a real estate transaction, two main parties are involved: the buyer and the seller. Each of these parties typically has a real estate agent representing their interests throughout the process. These agents represent their client’s interests during negotiations and help them get the best deal possible. However, in some cases, homebuyers and sellers want to work with dual agencies representing both sides of the transaction. 

As a real estate agent, you want to understand how this arrangement works and what benefits and pitfalls might arise in this situation. 

What is Dual Agency? 

In a dual agency arrangement, the buyer and the seller of the property are represented by the same agent. This type of setup is a bit controversial because people wonder how a single agent can adequately represent both the buyer and the seller. These two opposing parties will naturally have competing interests. The laws governing how dual agencies work can vary from state to state, but most states require that agents in this capacity disclose their arrangement to all the parties involved.  

What Are The Benefits And Drawbacks Of Working With A Dual Agency? 

Those interested in working with a dual agent or working in this capacity as an agent should understand the benefits and drawbacks that might impact clients. 

The Benefits of Dual Agency  

  • Since a single agent works on both sides of the case, negotiations generally go smoother and faster because information and paperwork do not need to get passed back and forth, limiting potential delays. 
  • The dual agent could provide additional information about the property to the buyer since it’s their listing, which can help buyers make better decisions. 
  • Sometimes dual agents may agree to a lower commission. This is not a guarantee since working as a dual agent requires the agent to complete the tasks of both the buying and selling agent, but some will offer a discount which can save money during the client process. 

The Drawbacks of Dual Agency 

  • Agents may have a conflict of interest because buyers and sellers have competing interests. 
  • Agents may also have trouble adequately representing both sides in negotiations and looking out for both sides of the discussion. 
  • Agents may not give their full attention to any side of the arrangement. By trying to manage both, they may end up giving less focus to each side of the particular real estate transaction overall. 

Working as a Dual Agent 

If you are interested in working as a dual agent, you will want to familiarize yourself with the guidelines of this arrangement based on where you live. Some states have made dual agencies illegal because of the competing interests involved. Therefore, you want to make sure that you legally can work as a dual agent based on your location and that you understand how the state expects you to protect your clients on both sides of the sale. 

If you want to work in this type of arrangement, you also want to make sure you keep yourself up-to-date with the latest in the industry and educate yourself as much as possible on your local market so that you can best serve your clients on both sides of the negotiation.  

Colibri Real Estate can help take your career to the next level. With our real estate classes, you can learn more about the markets, trends, and strategies to serve your clients better. If you want to work as a dual agent, you can use these resources to prepare yourself to excel as both a buyer and a seller on a single property, protecting your clients and making their buying process more manageable. Get started today!