The Pitfalls Of Dual Agency

by Stanley BronsteinAny real estate agent would jump at the chance to receive a double commission. But at what cost? What are you willing to sacrifice for that paycheck?

Dual Agency – Who benefits?

by Jim Duncan on July 17, 2006

The Realtor.

One of the primary values a Realtor brings to a transaction is representation – representation of his client’s best interests. How can a Realtor advocate for the best interests of both parties and still maintain the perception of fairness and full representation? In my mind, there is a difference between treating all parties fairly and honestly and being able to advocate with 100% vigor for one party.

Realtors practice dual agency all the time – successfully. Never had I had someone remark how much they appreciated their agent representing both sides. I have been told numerous times by clients how they perceived their agent in a shady, less-than-honest manner because that agent had both the buyer and seller.

Dual agency devalues Exclusive Representation.

In a divorce, would you have the same attorney represent both parties?

Having a client perceive that my loyalties were less than 100% is simply not worth whatever amount of money I might make. My reputation and high percentage of repeat business are far too valuable.

* As I was researching another post, I came across this post on Dual Agency. I read just the headline before writing this post, as I didn’t want to be influenced. It’s good to see others talking about this issue. After finishing my post, I revisited his site and was compelled to add this:

So why does Dual Agency even exist?
Because brokers want to double-dip on their own listings. In the bad old days, the buyer was not represented at all. “Your” agent would act like your champion, but he was always the sub-agent of the listing broker, even if he worked for another brokerage. Every agent was working for the seller, and nobody was working for the buyer. It made no difference to the buyer who sold the home. The buyer was without representation anyway.

Representing one party in a transaction is difficult enough.

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The risks of dual agency in real estate
Consider the fact that dual agency is no longer allowed in many states. There's a good reason for that. Dual agency is the arrangement in which the same real estate brokerage (and often the same agent from that brokerage) represents both the sellers and the buyers of a property. It is not only a conflict of interest, but often impossible, for a real estate agent to fairly represent and negotiate for both sides of a real estate transaction.

The only advantage of a dual agency that comes to mind solely benefits the real estate agent. That's because the listing agency doesn't have to split commission with a buyer's agent. Aside from that, nothing good can come from such a business deal. In negotiating a fair price, how can an agent work to get the best value for the buyers while fulfilling their fiduciary duty to the sellers?

by E.L. Miller