Disadvantages of dual agency for buyers and/or sellers:

Insufficient information: A dual agent negotiates for each client while keeping confidential information, which prohibits either buyer or seller to benefit. Dual agent cannot disclose to seller buyer’s price range and inform buyer the prices seller will accept.

Unfavorable price for buyer: Because an agent retains confidential information and knows of both party’s motives/desires, a dual agency easily allows an agent to sell a home at a higher price than what a buyer wants. Certainly, a dual agent cannot keep both clients best interest.

Buyer not aware of home defects: Buyers may not be properly informed about home defects or other problems since the realtor is also helping the seller to sell the home.

Buyer not fully informed about better options: Agent may know of better properties that may be of interest to buyer, but fails to inform since agent needs to fulfill seller’s interest to sell their own property.

Informed consent is eliminated: Presumptive written consent replaces informed consent. If a consumer signs a form in spite of its details, informed consent is assumed with the signature. Such forms only reveal the brokerage practice, not the agent’s options, liabilities, or benefits.

Like an attorney that cannot represent both parties in a case, a dual agent will face a conflict of interest which is why many states require written agency disclosures for both parties to know who represents whom. Many states do not permit dual agency but a transaction brokerage which gives the buyer and seller limited representation with not fiduciary duty. In some states such as Maryland, dual agency is allowed as an intra-company in which the same brokerage (and not agent of brokerage) represents both buyer and seller. Under an intra-company, the agent that represents the buyer works under the same brokerage as the agent representing the seller in the same transaction. If a state does allow dual agency, the agent must disclose his/her dual representation of both parties, and all parties must agree with written and informed consent. An agent must remain neutral with buyer and seller and is limited in representing both parties.