Dual Agency: What You Should Know Before You Buy

Dual agencies are commonly found in the real estate sector. These agencies work for both the seller and the buyer. You must have heard of a buyer’s agent and a seller’s agent, where each works for the benefit of their clients. Dual agents are the seller’s listing agent and the buyer’s agent in a real estate transaction. This article will shed more light on dual agencies in real estate and the pros and cons of dual real estate agents.

 

What Is a Dual Agency in Real Estate?

When a real estate agent represents both the home seller and buyer, they are known as dual agents. As mentioned earlier, sellers and buyers usually appoint different agents to help avoid conflicts of interest. However, there are cases where the buyer and the seller appoint the same agent. One such case is when a buyer shows interest in a home listed by their agents.

It is vital to mention here that there is no obligation for the buyers or sellers to work with the dual agent if it makes you uncomfortable. Also, it is advised that you check if dual real estate agents are allowed to operate in your state, as this is prohibited in certain states.

 

Benefits of Working with A Real Estate Dual Agency

Often, buyers find the option of working with a dual agent attractive because the entire transaction is streamlined with one agent. However, it is important to assess the situation and understand the benefits of such tie-ups. In most cases, the dual real estate agent benefits the most.

On the brighter side, the agent works in the best interest of both parties, buyers and sellers. However, the underlying approach is to close a deal fast and may not encourage too much negotiation. Interestingly, the agent will receive commissions from both sides, and they would want the deal to go through as fast as possible. Thus, in many cases, the dual agents are unable to fulfill their fiduciary responsibilities, or they are unable to work in the best interest of their clients. Inadvertently, when a dual real estate agent is involved, buyers and sellers may pay more as commissions than when the agents are different.

This brings us to the cons of working with a real estate dual agency. 

1. The dual agent may not negotiate a better deal for the buyer because they aim for a higher commission. Remember, the commission a buyer and seller pay the agent directly depends on the sale price.

2. There is also a conflict of interest from the seller’s end. Of course, the endeavor of the agent and the seller is to get the best price, but the dual agent will mostly hurry the transaction because the seller might be pressuring them to close the deal faster.

3. There is also the angle of conflicting interests. The same advice is never beneficial for both sides, so it can be like walking a tightrope for the agent.

4. Another essential point that you cannot miss is the workload. For the agent, it is more work—almost double what individual agents do. This means the buyer and the seller might need to work tediously to get the agent’s attention. 

Point of caution: In certain states, dual agency in real estate is not permitted by law. These states include Wyoming, Vermont, Texas, Maryland, Kansas, Florida, Colorado, and Alaska. In other states, dual agents are allowed to operate, but there are usually restrictions. If using the services of a dual agency, both the seller and the buyer need to consent in writing to the agent if a dual agency comes into effect. 

 

Designated Agent Vs. Dual Agent

A dual agent acts as the real estate agent for the seller and the buyer in the same transaction. Designated agents, on the other hand, are two individuals working on the buyer and the seller. Designated agents have the best interests of their individual clients. Therefore, most buyers and sellers want to work with designated agents because they are sure to benefit more from this.

 

Working With Dual Agents

One advantage of working with dual agents is that the process is faster than the traditional method. However, as a seller or buyer, you need to consider the pros and cons of dual real estate agents before agreeing to work together.

 

As a Seller

Dual agents make the entire process of home sale faster, hassle-free, and smoother. Negotiating a favorable price may be challenging because the dual agent represents the buyer, too. Thus, you may not get the desired price and make less profit going through such designated agents. Opt for dual agents only if you are not too focused on attaining high profits and want to complete the process fast.

 

As a Buyer

Buyers can benefit more with dual agents. First, they have more options for available homes. The process is more straightforward and smoother with open and direct communication with sellers because the agents are directly in touch.

Therefore, if you are a buyer looking to communicate with sellers directly and also wish to view the homes before considering a deal, you can choose to work with a dual agent for the best outcomes.

 

To Summarize

There can be many pros to working with dual agents. They can benefit both buyers & sellers in many ways, but you need to be aware of the disadvantages when choosing to work with dual agents. In certain states, dual agents can work if there is a written agreement between the buyer and the seller. However, in certain states, this approach is unlawful. 

The most challenging part of working with a dual agent is trusting the agent to act in your best interest. Consider the pros and cons of dual real estate agents and designated agents before making the final decision. Once you decide, get ready to start the mortgage process and use a trustworthy platform like Total Mortgage to compare current rates and choose a lender.