In real estate transactions, dual agency means one real estate agency or firm represents more than one party. For example, a real estate agent becomes a dual agent when he or she represents both buyer and seller. Dual agency also arises when the same real estate agency or brokerage firm represents both buyer and seller.
Dual agency may streamline the process of selling or buying a home because the buyer and seller only need to communicate with one agency and one agency handles the paperwork. Real estate agents may also push for dual agency because it can increase their commission amount. Although it may seem convenient to utilize a single agent, there are some downfalls to consenting to dual agency.
Typically, there are separate agents for the buyer and seller. The seller’s agent owes fiduciary duties to the seller and the buyer’s agent owes fiduciary duties to the buyer. Owing fiduciary duties means the agents have an obligation to work in their client’s best interest and disclose all important information. The agent also has a duty to keep communications confidential. In the usual real estate transaction, the buyer is trying to pay as little as possible and the seller is trying to get as much as possible for their home. There is an inherent conflict in one agent or agency trying to accomplish both of these goals.
When an agent is representing both buyer and seller, the agent owes these duties to neither party. This means the agent cannot advocate for either client. A dual agent must keep confidential information confidential and he or she is also unable to advocate for either buyer or seller using that information. As a result, the agent becomes a neutral party to the transaction. Due to this conflict and disadvantageous arrangement, buyers and sellers utilizing the same agent must give their consent to the arrangement. You may want to give serious thought to whether you wish to consent to dual agency in your real estate transaction.
If you need assistance with a real estate transaction involving dual agency, contact O’Keeffe O’Brien Lyson Foss in Fargo, North Dakota or call 701-235-8000 or 877-235-8002.