What is Dual Agency?

Dual agency is when one agent represents both the seller and the buyer in the same real estate transaction. A licensed agent can legally be the agent of both parties if the seller and buyer are aware of it and consent to this representation. A dual agent must walk a narrow tightrope to be neutral toward both parties and may not disclose confidential information to either party.

Why Does Dual Agency Matter?

When there are multiple offers on a property being sold and there is a bidding environment, buyers find it beneficial to be represented by the listing agent. While there may be a multitude of reasons for this, the two that come to mind are the following:

1. The listing agent has a direct line of communication with the seller so the response time between parties does not take as long which provides a more effective and seamless process.
2. The listing agent has more intimate knowledge regarding the asset which can ultimately affect the price a buyer can pay for a property.

While it sounds simple and straightforward, it can potentially create a harmful conflict of interest as well. Dual agents cannot fulfill their fiduciary obligations to both parties. They cannot advance the best interest of both buyer and seller because those interests always diverge.

I guess it varies on which side of the transaction you end up being and the outcome of that situation. With that in mind, what are your thoughts on dual agency? Is it ethical? Does it make a win-win situation?