Dual agency, when one real estate agent represents both the buyer and the seller in one transaction, can be fraught with perils and pitfalls.
Dual agency is a bad idea and I won’t do it – and neither should you.
Before I explain my reasons why you should avoid dual agency, let me first list the types of real estate representation that are available when you buy or sell a home:
When Are You Likely To Encounter Dual Agency?
A common way that a dual agency situation can arise is if you visit an open house as a buyer before you’ve hired a real estate agent, and tell the agent showing the home that you are interested in buying the house. Then the agent, who is working for the seller, offers to help you write an offer on the house. If you accept that offer, you will be working with a dual agent or representative.
3 Reasons To Avoid Dual Agency Entirely
1) There are no benefits to homebuyers
A dual agent can’t be your advocate since the agent is representing both parties. Plus, you could be losing out on the opportunity to have an agent search for properties and represent only your interests.
2) A conflict of interest is inevitable
A dual agent is not required to disclose the lowest price or terms the seller will accept, or the highest price and best terms the buyer is willing to offer. That creates a conflict of interest since the seller wants the highest possible price and the buyer wants the lowest possible price.
3) Your interests as a buyer compete directly with the seller’s interests
While your agent is bound not to share any information you provide, would you feel comfortable telling someone also working for the seller the top price you would be willing to pay for a home?
Homebuyers and sellers can avoid these scenarios entirely by hiring someone who will exclusively represent ONLY their interests.
2 More Reasons To Steer Clear
If you’re wanting more information about this important topic, here are 2 ADDITIONAL REASONS to avoid dual agency:
4) A dual agent has a large incentive to close a sale
This could create issues where the agent may not adequately represent one or both parties for fear of spoiling the deal, and losing out on not one, but two commissions.
5) Dual agency is lawsuit prone
Dual representation is the most common cause of lawsuits in the real estate industry because it poses serious ethical risks.