Understanding Dual Agency in Real Estate Transactions


The real estate industry is complex and involves many parties involved in the transaction process. One such party is the dual agent, who acts on behalf of both the buyer and seller in a real estate transaction. As a result, understanding dual agency is crucial for all parties involved in a real estate transaction. In this article, we will explore what dual agency is, how it works in real estate transactions, its pros and cons, who can act as a dual agent, legal implications, best practices, and conclude with some final thoughts on the topic.

What is dual agency?

Dual agency refers to a situation where a real estate agent represents both the buyer and seller in a transaction. In this arrangement, the agent has two clients who rely on them to represent their interests, which can create conflicts of interest and ethical dilemmas. It’s important for buyers and sellers to understand what dual agency entails before entering into a real estate transaction.

How does dual agency work in real estate transactions?

In real estate transactions, dual agency refers to a situation where both the buyer and seller are represented by the same agent or brokerage firm. This means that the agent has two clients with conflicting interests who they must represent equally. In this way, dual agency can create potential conflicts of interest between the buyer and seller, as well as between the agent and their employer. However, it can also provide benefits for both buyers and sellers by allowing them to have access to a wider range of properties and potentially more favorable terms. It is important for all parties involved to understand the risks and benefits of dual agency before entering into any real estate transaction.

Pros and cons of dual agency

Pros of dual agency:

  1. Increased competition among agents leading to better deals for buyers or sellers.
  2. Agents have access to more properties, increasing their chances of finding the perfect match for their clients.
  3. Clients benefit from having multiple agents working on their behalf, providing them with a wider range of options and expertise.

Cons of dual agency:

  1. Conflicts of interest may arise between the seller’s agent and the buyer’s agent, leading to disagreements and potentially harming the transaction.
  2. The agent may not be fully committed to either party, leading to potential misinformation or neglect of duties.
  3. There may be a lack of transparency in negotiations, making it difficult for both parties to understand the terms of the deal.

Who can act as a dual agent?

In real estate transactions, a dual agent is someone who represents both the buyer and seller in a transaction. This means that the dual agent has a fiduciary duty to both parties, which can present some challenges and risks. However, there are certain situations where it may be appropriate for a dual agent to represent both parties. For example, if the buyer and seller are family members or friends, or if they have a preexisting business relationship. In these cases, it is important for both parties to fully understand the potential conflicts of interest and to carefully consider whether a dual agent arrangement is appropriate. Ultimately, it is up to each party to decide whether they feel comfortable with a dual agent representation and to carefully review any agreements or contracts related to this arrangement before signing.

Legal implications of dual agency

As a dual agent, there are legal obligations that come with the role. It’s important for both parties to understand their responsibilities before entering into a transaction. For example, if one party believes they have been wronged or their interests were not represented properly, they may pursue legal action against the agent. In some states, it may even be illegal for an agent to represent multiple parties in the same transaction without full disclosure and consent from all parties involved. Therefore, it’s crucial for clients to thoroughly research and understand the laws surrounding dual agency in their state before entering any real estate transaction. By doing so, they can protect themselves and ensure their interests are being represented appropriately throughout the process.

Best practices for working with dual agents

When working with a dual agent, it is important to establish clear communication and boundaries from the beginning. Here are some best practices for working with dual agents:

  1. Ask for clarification: If you have any doubts or concerns about the dual agency arrangement, make sure to ask the agent for clarification. This will help ensure that everyone is on the same page and there are no misunderstandings.
  2. Establish expectations: Be clear about what you expect from the dual agent and what their responsibilities are. This will help avoid confusion and ensure that both parties are aware of their obligations.
  3. Use written agreements: It is a good idea to have a written agreement with the dual agent that outlines their responsibilities and duties. This can help protect both parties and provide a clear record of the transaction.
  4. Monitor communication: Keep track of all communication between yourself and the dual agent to ensure that everything is being handled appropriately. This will help prevent any miscommunications or misunderstandings.
  5. Seek legal advice: If you have any doubts or concerns about the dual agency arrangement, it may be worthwhile to seek legal advice. An attorney can help clarify any issues and ensure that you are protected under the law.


In conclusion, understanding dual agency in real estate transactions is crucial for both buyers and sellers. While dual agency can provide benefits to both parties, it also comes with potential risks and legal implications. By following best practices for working with dual agents, such as clearly communicating expectations and obtaining written agreements, buyers and sellers can mitigate these risks and ensure a successful transaction. As a real estate professional, it is important to stay up-to-date on the latest regulations and laws surrounding dual agency to provide the best possible service to clients.

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