Understanding Dual Agency in Real Estate: What Buyers and Sellers Need to Know


In real estate transactions, dual agency refers to a situation where a single agent represents both the buyer and seller in a transaction. This means that the same agent is acting as both a fiduciary for the buyer and a salesperson for the seller. In this type of arrangement, there are several risks and responsibilities that must be understood and managed by all parties involved. As such, it is important for buyers and sellers to be aware of what dual agency entails before entering into any real estate transaction.

Definition of dual agency

Dual agency is a real estate practice where one agent represents both the buyer and seller in a transaction. This means that the same agent has two separate clients who have conflicting interests and needs. The agent must act in the best interest of both parties while maintaining confidentiality and avoiding any potential conflicts of interest. In some states, it is illegal for an agent to represent both the buyer and seller in the same transaction due to concerns over potential biases and conflicts of interest. However, many states have regulations in place that govern dual agency and require agents to disclose their dual representation to all parties involved. It is important for buyers and sellers to understand the risks and benefits of working with a dual agent before entering into a real estate transaction.

Purpose of dual agency

The purpose of dual agency is to provide buyers and sellers with a greater level of service and representation throughout the real estate transaction process. In essence, it allows both parties to have access to the same agent who can work on their behalf without any conflicts of interest or bias towards either party. The goal of this arrangement is to facilitate communication between the buyer and seller while ensuring that both parties receive the best possible representation during the transaction process. Additionally, dual agency helps to streamline the transaction process and reduce the time and costs associated with traditional brokerage models. Overall, dual agency provides a win-win situation for both buyers and sellers by allowing them to work together seamlessly while receiving the best possible representation.

Risks associated with dual agency

Dual agency can pose significant risks for both buyers and sellers. One of the primary risks is the potential for conflict of interest. In a dual agency situation, the agent represents both the buyer and seller, which creates a conflict of interest. The agent may be incentivized to negotiate a deal that benefits both parties, even if it is not in the best interest of either party. This can lead to negotiations that are less favorable for one party or even result in the deal falling apart altogether.

Another risk associated with dual agency is the possibility of confidential information being shared between the two parties. When an agent represents both the buyer and seller, they have access to sensitive information about each party’s finances, preferences, and other personal details. If this information were to be shared between the parties, it could create a breach of confidentiality and potentially damage their trust in the agent.

Finally, there is a risk of inadequate representation due to the agent’s dual responsibilities. Because the agent is representing multiple parties, they may not have the time or resources to provide personalized attention to each party. This can lead to misunderstandings, missed deadlines, and other issues that can delay or derail the transaction.

It is important for both buyers and sellers to understand these risks before entering into a dual agency arrangement. By working with an agent who is committed to providing fair and unbiased representation, they can minimize the potential risks and ensure a successful transaction.

Regulations governing dual agency

Regulations governing dual agency vary from state to state, but most states have laws in place that regulate this practice. In some states, such as California, dual agency is prohibited entirely. Other states require specific disclosures or limitations on the agent’s ability to represent both parties. For example, in Texas, agents must disclose their dual representation to both parties before entering into a transaction. Additionally, many real estate associations and boards have adopted guidelines for best practices for dual agency. These guidelines typically recommend that agents avoid dual representation where possible and clearly communicate any potential conflicts of interest to both parties. Overall, regulations governing dual agency aim to protect both buyers and sellers from potential conflicts of interest and ensure that all parties are fully informed about the representation.

Best practices for buyers and sellers when dealing with dual agents

When dealing with dual agents, both buyers and sellers should take certain precautions to protect themselves from potential conflicts of interest or breaches of confidentiality. Here are some best practices for each party:
For buyers:

  1. Ask for a written disclosure of the agent’s dual agency status before entering into any agreements or negotiations.
  2. Make it clear that you are aware of the dual agency and understand the risks involved.
  3. Keep all communications with the agent confidential until you have officially accepted an offer on a property.
  4. Be cautious if the agent tries to pressure you into making an offer on a particular property or negotiating terms that favor the seller.
  5. If you have concerns about the agent’s representation, seek legal advice immediately.

For sellers:

  1. Understand that your agent may represent multiple buyers and negotiate accordingly.
  2. Be transparent about any known conflicts of interest between buyers or their representatives.
  3. Keep all communication with prospective buyers confidential unless they have been formally pre-approved by you.
  4. Be wary of offers that seem too good to be true or contain unusual clauses.
  5. Seek legal advice if you suspect any breaches of confidentiality or potential conflicts of interest.

By following these best practices, buyers and sellers can navigate dual agency safely and effectively, protecting themselves from potential disputes or misunderstandings.


In conclusion, understanding dual agency in real estate is crucial for both buyers and sellers. While it can provide benefits such as increased market exposure and expertise, it also comes with risks such as conflicts of interest and lack of representation. By following best practices and staying informed of regulations governing dual agency, buyers and sellers can navigate this arrangement safely and effectively. As a realtor myself, I recommend that all parties involved in a transaction consult with their own legal counsel before entering into any agreements involving dual agency.

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