Dual Agency: Laws and Transactional Implications

Dual agency occurs when a single real estate agent represents both the buyer and the seller in a real estate transaction or two agents from the same brokerage company are involved in the transaction, one representing the buyer, and the other representing the seller. The agents do not have to be located in the same office location, but are employed by the same brokerage firm. Not all states recognize dual agency. Real estate agency laws vary from state to state. You should check the state laws of your state to find out whether dual agency is legal in your state.

Broker and Sales Level Dual Agency

The broker or the real estate salesperson can act as a dual agent if allowed under the laws of the state laws where they are licensed to sell real estate. In states where dual agency is not recognized, the real estate agent who assists both parties must transition to a transactional broker, and the parties must agree to this transition in writing. The real estate agent then has a different set of duties and responsibilities owed to the parties than a single agent agency relationship. Since the laws vary in each state, it is best to check your state laws.

Dual Agency With Two Agents

An example of dual agency with two agents is as follows:
A broker has two agents from the same company; one representing the seller, the other representing the buyer.

Dual Agency Must be Agreed to in Writing

An agency disclosure agreement must be presented to the buyer and the seller and signed by all parties reflecting their consent to the dual agency representation.
Real estate laws are different in every state. Always check with your real estate attorney if you have any questions regarding dual agency. For more information regarding the agencies that regulate real estate laws and real estate agency disclosure laws, please consult with a real estate lawyer.

Dual Agency With Same Agent

A single agent can act as a dual agent as long as the dual agency is allowed under the state law where the broker is licensed and the dual agency is disclosed to both parties by the broker. The parties much each party signs a written agency disclosure consent form acknowledging the dual agency relationship. An example of a single dual agent could be a listing agent who also represents the buyer.