Whether you are a buyer or a seller, you may be given the option to enter into what is known as a dual agency relationship. Though it may not be a serious issue, having a grasp on what it is can help you to be aware of the types of restrictions that it can give you agent.
What Is A Dual Agency Real Estate Relationship?
When someone mentions “agency” in this context, they are actually referring to the relationship between a buyer or seller and a real estate agent. Just because it is called a dual agency does not mean that it can’t also occur with a single agent. Dual agency with two agents just means that the agents are licensed under the same broker, both on the buyer’s and seller’s side. With a single agent dual agency, a buyer may get in touch with the seller’s agent to submit their offer, meaning the agent is acting on both behalf.
Should You Utilize a Dual Agency Relationship?
We don’t recommend doing so, as a dual agency relationship can impose some serious agent restrictions. This is because that agent will now need to work in favor of both the buyer and seller, providing full disclosure to the buyer while also hiding any confidential information from the seller.
When an offer is made, an agent that is part of a dual agency relationship cannot provide an advised offer amount for the buyer. For the seller, they aren’t allowed to advise them on whether or not to accept an offer. Essentially, the agent has to be loyal to both parties, meaning they won’t be able to advance either interest.
Disclosure For Dual Agencies
Dual agencies are not legal in every state, as they represent a conflict of interest between the two parties. If you are in a state where dual agencies are legal, that agent must confirm it with both the buyer and the seller. That buyer and seller must them sign a consent form to show that they have comprehended the overarching definition of dual agencies and what types of restrictions there will be when it comes time to make an offer.
The transaction between the parties will not be able to move forward unless both parties have signed the agreement, indicating their understanding. Once both parties sign, however, the dual agency can be put into execution, wherein that agent will be known as a disclosed dual agent.
So can a single agent represent two parties when it comes to buying and selling a home?
In short, yes, though it depends on the place and the willingness of the parties. Dual agencies can stifle the process, as it doesn’t allow for full agent flexibility, so understanding those stipulations is incredibly important. Overall, we would recommend avoiding this risky business if you can.
Have you ever entered into a dual agency relationship when buying or selling a home? Let us know about your experience in the comments!