Dual agency occurs when the same real estate agent represents both the seller and the buyer in a single transaction. This differs from a traditional home sale, where the buyer and seller each have their own dedicated agents, with the seller’s agent fighting for the highest price and the buyer’s agent for the best deal for their client.
In most cases, dual agency agreements are a bad choice for both buyers and sellers. Sellers and buyers have competing interests, and a single agent can’t negotiate against themselves. As a result, one or both parties will often end up with a worse deal than they would have if they had had an agent working exclusively for them.
In this article, we’ll cover what dual agency is, how it works in practice, and what the benefits and risks are.
What is dual agency in real estate?
Dual agency (also called “limited agency” in some states) is when one real estate agent acts as the representative for both the buyer and the seller in the same transaction. In virtually all states, a dual agent has to act as a neutral facilitator and can't provide advice or strategy recommendations that may harm one of the parties.
There are three main types of agency representation when buying or selling a house:
- Exclusive agency: This is the standard type of real estate agency where one agent represents the buyer and another agent represents the seller. Each agent owes fiduciary duties exclusively to their clients, such as confidentiality and full disclosure.
- Designated agency: This is when the buyer and the seller have their own separate agents, but both agents work at the same brokerage. There are some similarities between dual agency vs. designated agency since both agents share the same broker, but this approach reduces some of the potential conflicts of interest.
- Dual agency: This is when one agent represents both the buyer and seller simultaneously. Instead of acting as an advocate for either side, the agent becomes more of a neutral facilitator for the transaction.
Who does dual agency work best for?
Dual agency is a bad idea for most buyers and sellers due to the potential conflict of interest it places the agent in. However, there are a handful of scenarios where dual agency might make sense:
- When a buyer already knows what property they want, is okay with potentially paying a bit higher than market value, and mostly wants a quick and smooth transaction. Ideally, they’ll have a real estate attorney review any documents.
- When a seller is in a hot market, receives an offer from a buyer who is already working with their listing agent, and the buyer is willing to pay at or above the list price. Dual agency here can help avoid a long marketing process and facilitate a quick transaction.
- When the buyer and seller already know each other and have agreed on most of the terms of the sale. Scott Bialek, co-founder of Hurst Lending, says, “Off-market deals between two familiar parties also represent a fantastic fit for this arrangement. They will usually agree on terms quickly. I have seen many friends sell houses for each other without any kind of drama. I just take care of the paperwork and keep them legally protected.”
Be aware that even in these cases, dual agency is not always the best solution. You’ll still miss out on having a dedicated advocate on your side, which could mean leaving money on the table.
How dual agency actually works
Dual agency works similarly to buying or selling a house the traditional way, except for a few major differences. The process typically works like this:
1. Forming a dual agency: Dual agency is rarely planned. Instead, it usually happens because the buyer contacts the listing agent directly about buying one of their properties. The buyer may decide they want the agent to represent them as well, often because they want a quick purchase or they’re able to negotiate a lower buyer commission rate.
Real-life example
Katy Baker, a home buyer in Chattanooga, TN, describes how she fell into a dual agency arrangement while browsing listings during a tough market: "I didn't even know if we wanted to buy this property. I just wanted to go check it out. Instead of finding a buyer's agent, we just called up the listing agent directly because you can find their information on the listing, and we scheduled a showing."
She adds that going directly to the listing agent was a deliberate choice: "The listing agent is the one who has the information on the house. And I thought, if we go through the platform you're browsing on, like Redfin, you kind of get hooked into just working with that buyer's agent."
When she decided she was serious about the property, Baker broached the dual agency idea: "We said, 'We aren't planning to use a buyer's agent if you're willing to just broker the deal, and we will be reasonable and work with you to make this happen.' She was willing to do that, and kind of present it to the sellers — this is the opportunity, and this is how the math would work." The sellers agreed.
2. Disclosing dual agency: The agent needs to disclose to both parties that they’re representing both of them, and what that means in terms of advocacy. An agreement is typically signed where both the buyer and seller consent to the dual agency.
3. Negotiating commission: Because the agent is representing both sides, buyers and sellers can sometimes get a discounted rate. However, this is not guaranteed and will need to be negotiated upfront.
4. Having a neutral facilitator: One of the biggest differences happens during negotiations. Because the agent cannot advise either party on strategy, they mostly act as a neutral facilitator who relays information between the buyer and seller. For both parties, there’s a significant risk at this stage that they’ll get a worse deal than they would if they had their own agent fighting for them.
5. Navigating inspections and contingencies: Inspections can present challenges for dual agents. If the inspection reveals a significant issue, the agent can only provide limited support to the buyer on how to renegotiate the deal. Since the agent is representing both sides, they’re unlikely to fight as hard to have the issue fixed as would an agent exclusively representing the buyer.
6. Closing: Closing is similar to a traditional sale with the agent handling most of the paperwork for both sides. Even during a dual agency, both sides are free to have any paperwork reviewed by an attorney.
Who pays commission in dual agency?
In a traditional real estate transaction where the buyer’s agent and listing agent are different people, each agent earns a commission of 2.5–3%, for a total combined average commission of 5–6%. In a dual agency, the same agent earns both sides of the commission.
In theory, that means that a dual agent could earn about 5-6% for a single transaction. In practice, dual agents often agree to work for a reduced commission. For example, instead of 6%, they may agree to a 4% commission. On a $400,000 home, that’s an $8,000 overall savings, from $24,000 to $16,000.
It’s also important to understand that agent commission has changed following a major legal settlement involving the National Association of Realtors in 2024. This agreement requires buyers to negotiate compensation directly with their agents instead of having sellers choose the compensation amounts.
In a dual agency, this change means that both buyers and sellers need to talk with the agent about how much compensation will be and who will pay. While the buyer and seller can split compensation costs, the seller may also choose to cover the buyer’s commission in the form of a concession.
Dual agency risks and benefits
Risks of dual agency
You don’t have an advocate: The biggest problem with dual agency is that the agent can no longer act as an advocate for either the buyer or seller. That’s a big problem during negotiations since it means the agent can’t help the client push for a better deal.
As Tom Hume, Realtor with The Hume Group in Tacoma, WA, says, “[Dual agency] may seem doable up front, but, as a broker, when you get into the thick of a transaction and something needs to be worked out between the parties, it is natural for your clients to question WHO you are fighting for.”
Confidentiality risks: Dual agents have access to confidential information from both parties, such as the buyer’s maximum budget and the seller’s lowest acceptable price. Even if they don’t intend to, dual agents are at greater risk of accidentally sharing confidential information, which could negatively affect either the buyer or the seller.
Legal risks are higher: There is a heightened risk of litigation when one agent represents both parties. For example, in one case, a buyer sued their agent for failing to disclose inconsistencies in the square footage of a Malibu home whose seller was being represented by the same agent.[1]
First-time buyers: For people who’ve never bought a home before, the risks are especially great. First-time buyers may be especially unfamiliar with what can be negotiated and how an exclusive agent would be able to advocate for them, leaving them vulnerable to getting a worse deal with a dual agent.
Baker, who had previously purchased a home before entering this dual agency arrangement, acknowledges the extra challenge for those without that experience: "If I were a first-time buyer and didn't have a real estate agent who was willing to sort of guide me through this… I don't think I would feel at all confident proceeding without an agent. There are so many checkboxes with this kind of purchase that I think it requires some familiarity before you can branch out on your own."
Benefits of dual agency
Faster closings: When one agent represents both sides, the entire transaction typically moves along much faster. There are fewer communication delays, and paperwork is typically completed more quickly.
Potential commission savings: Dual agents may be willing to work for a reduced commission, although this will have to be negotiated beforehand.
Streamlined communication: In a traditional transaction, communication delays can happen because negotiations involve two agents representing two parties. When only one agent is involved, communication becomes more streamlined.
Legal considerations
Is dual agency illegal in some states?
Yes, dual agency is illegal in these states:
| State | Regulations |
|---|---|
| Alaska | Designated agency is legal.[2] |
| Colorado | Designated agency is also illegal.[3] |
| Florida | Designated agency is legal.[4] |
| Kansas | Designated agency is legal.[5] |
| Maryland | Designated agency is legal. Agents may offer "ministerial acts" to the unrepresented party, meaning they do not involve the discretion or judgment of the agent.[6] |
| Oklahoma | Designated agency is legal.[7] |
| Texas | While agents can have only one client, brokers can provide limited services to the other client.[8] |
| Vermont | Designated agency is legal.[9] |
| Wyoming | Designated agency is legal. Agents can provide limited services to the other unrepresented client.[10] |
Why is dual agency illegal?
Dual agency puts real estate agents in a potential conflict of interest. In a real estate transaction, buyers and sellers usually have opposing financial interests: the buyer wants the lowest price possible, and the seller wants the highest price. When an agent represents both parties, it’s impossible for them to advocate for the financial interests of one without hurting the other party.
What states allow dual agency in real estate?
Most states allow dual agency, but the relationship has to be disclosed, and written consent is usually required from both parties. Many states also stipulate that dual agents can only offer limited services and cannot do anything for one party that may harm the other party.
| State | Regulations |
|---|---|
| Alabama | Written disclosure must be provided as soon as reasonably possible.[11] |
| Arizona | Written consent required.[12] |
| Arkansas | Written consent required.[13] |
| California | Written consent required.[14] |
| Connecticut | Written consent required.[15] |
| Delaware | Written disclosure required.[16] |
| Georgia | Written disclosure required.[17] |
| Hawaii | Written disclosure required.[18] |
| Idaho | Written disclosure required.[19] |
| Illinois | Informed and written consent required.[20] |
| Indiana | Called "limited agency." Written consent of both parties required.[21] |
| Iowa | Signed consent required before engaging in agent activities.[22] |
| Kentucky | Written disclosure required.[23] |
| Louisiana | Informed written consent required.[24] |
| Maine | Informed written consent of all parties required.[25] |
| Massachusetts | Full disclosure and written consent required.[26] |
| Michigan | Informed written consent of both parties required.[27] |
| Minnesota | Informed consent of both parties required.[28] |
| Mississippi | Informed written consent of both parties required.[29] |
| Missouri | Informed written consent of both parties required.[30] |
| Montana | Written authorization required.[31] |
| Nebraska | Written informed consent required.[32] |
| Nevada | Written consent required.[33] |
| New Hampshire | Knowledge and written consent of all parties required.[34] |
| New Jersey | Informed written consent of both parties required.[35] |
| New Mexico | A separate dual agency agreement must be signed by both parties.[36] |
| New York | Informed and written consent of both parties required.[37] |
| North Carolina | Written consent of both parties required.[38] |
| North Dakota | Informed written consent of both parties required.[39] |
| Ohio | Informed written consent of both parties required.[40] |
| Oregon | Referred to as "disclosed limited agency." Informed written consent of both parties required.[41] |
| Pennsylvania | Informed written consent of both parties required.[42] |
| Rhode Island | Knowledge and consent of both parties required.[43] |
| South Carolina | Prior informed and written consent of both parties required.[44] |
| South Dakota | Referred to as "limited agency." Prior written consent of both parties required.[45] |
| Tennessee | Full disclosure and consent of both parties required.[46] |
| Utah | Referred to as "limited agency." A Limited Agency Agreement and informed consent of both parties required.[47] |
| Virginia | Informed written consent of both parties required.[48] |
| Washington | Written consent of both parties required.[49] |
| Washington DC | Both parties must sign a dual agency agreement.[50] |
| West Virginia | Written consent of both parties required.[51] |
| Wisconsin | Referred to as "multiple representation relationship without designated agency." Clients must check a box on their brokerage disclosure form consenting to dual agency.[52] |
How do parties legally agree to a dual agency?
In most states, both the seller and buyer have to provide written consent to dual agency. Often, this means checking a box in your agency agreement that gives your consent to dual agency. In other states, a separate disclosure agreement must be signed at first contact by both the buyer and the seller.
The exact rules for when dual agency must be disclosed vary by state. Diane McConaghy, an associate broker at RE/MAX Select Realty — Diane McConaghy Team, notes that “in [Pennsylvania] dual agency must be disclosed early in the process, so I explain it when clients first sign their listing agreement and buyer agency agreement. I make it very clear that if I represent both parties in the same transaction, my role changes. I cannot advocate for one side over the other, and I cannot share confidential negotiating strategies between the parties.”
How to avoid dual agency
The simplest way to avoid dual agency is to refuse to check or sign the dual agency consent box or disclosure agreement. Also, make sure to read your agency representation agreement carefully before signing, as it may contain language permitting dual agency or designated agency.
Before signing any agreement, ask your agent about their policies around dual agency. For example, if you’re the seller, you can ask, “What’s your policy if a potential buyer is represented by you or your brokerage? Will I then be reassigned to a different agent?” Reputable real estate agents should have no trouble answering these questions and respecting any boundaries you set up front.
Tips if you decide to use a dual agent
If you’ve decided that dual agency is the right path for you, here are some tips to help protect yourself:
Get a real estate attorney to review all documents. Because your agent can no longer give you strategic advice, a real estate attorney can help partially fill the gap. Having an attorney review a purchase agreement can help you identify potential legal risks.
Do your own market research. Because your agent is representing the other party, they can provide only limited guidance on pricing and negotiations. Research what other comparable properties in your area have sold for in order to negotiate a better deal.
Baker did exactly this when evaluating her fixer-upper: "We were able to pull up what properties in move-in ready condition were going for. And then because we know people who have done renovations, we were able to gauge ballpark what it was going to cost to redo the kitchens and bathrooms."
Negotiate agent commission upfront. A lower commission is one of the few potential benefits of a dual agency, but this will need to be negotiated upfront, along with which party is responsible for paying it.
Baker used this to her advantage when making her offer. Even though she came in below the sellers' asking price of $265,000, she was able to frame the savings in a way that made her offer compelling: "Since you won't be paying a buyer's agency, here's your bottom line, because you're saving 2.5%. If you look at what a full price offer would be versus what this one, without any buyer's agent commission attached, would be, you're really not that far off." By showing the sellers the math on what they would actually net, Baker and her husband ended up being the most compelling offer on the table despite not meeting the asking price.
Ask about your agent’s relationship with the other party. The nature of the relationship between your agent and the other party may be important. For example, if the other party is a close relation of your agent, you may have legitimate concerns about your agent working harder for that party than for you.
Ask about how to terminate the agreement. Before agreeing to a dual agency, ask your agent about the process for terminating the agency agreement. You should trust your instincts. If something feels off during the dual agency, you’ll want to maintain the right to walk away.
The bottom line: Dual agency isn't right for most people
Dual agency comes with significant risks for both buyers and sellers. You’ll lose having a strong advocate in your corner, there’s potential for confidential information to get leaked, and you’re less likely to walk away with the best deal possible.
While you could potentially save on commission and enjoy a faster transaction, you’re almost always better off with an agent who is working exclusively for you.
Besides, if saving on commission is your main reason for considering dual agency, you have other options. For example, Clever Real Estate can connect you with a top local real estate agent who works exclusively for you while charging a lower commission. That way, you’ll save money while still having a strong advocate on your side.
- Answer 5 simple questions about your sale
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FAQ
How do I back out of a dual agency agreement?
Backing out of a dual agency agreement entails canceling your listing or buyer’s agency agreement. However, you’ll need to review the contract for how to terminate, as some may lock you in for a set period of time.
What are my options if I feel misled or defrauded by dual agency?
Consider filing a complaint with your state’s real estate commission, and talk with an attorney about potential legal options. While dual agency is legal in most states, it can create legal risks for realtors. For example, a major New York brokerage was subject to a class action lawsuit in 2022 for allegedly misleading clients in dual agency relationships, such as by minimizing inspection reports and encouraging buyers to pay above the listing price.[53]
