There are so many different ways in which buyers and sellers can be represented by real estate agents. This can be further complicated when people hear about dual agents. But what is dual agency and are dual agents bad? Whether you are a buyer or seller, it is essential to understand the various roles of real estate agents. In this blog article, we have included everything you need to know about a dual agency.
To start with, let us explore the home buying and selling process. On the one hand, a buyer will need a buyer’s agent to represent their interests. While on the other hand, a seller requires a seller’s or listing agent to guide them through the process. Simply put, a dual agency exists when a single real estate agent represents both the buyer and seller in the same real estate transaction. Moreover, a dual agency can be established when the agent’s for both the buyer and seller work for the same real estate brokerage firm.
How a dual agency works
Although dual agencies occur with very rare frequency, they do happen from time-to-time. A dual agency essentially works by combining the roles of the buyer’s agent as well as those of the seller’s agent into one. One of the most important considerations for a dual agent is remaining neutral. This will ensure that the duel agent represents the best interests of both the buyer and seller. Moreover, a dual agent will earn a commission from both the buyer and the seller. The commission earned by a dual agent will typically be 3% from the buyer and a further 3% from the seller.
Considerations for a dual agency
One of the greatest considerations for buyers and sellers is whether a dual agency is a good or bad thing. To start with, your expectations when it comes to your real estate transaction will determine whether a dual agency is a good or bad thing for your circumstances. A dual agency can be a good thing if you are aiming for a more streamlined home buying process. In addition, a dual agency can aid pursue a lower commission as a seller. However, if your circumstances require more personalised service and dedicated time then a dual agency might not be ideal for you. Moreover, there might also be a conflict of interest as well as other complications when it comes to a dual agency.
The legal aspects of a dual agency
It is also important to know that a dual agency might not be permitted in certain countries, cities, towns and states. As such, it is vital to research the legal aspects of a dual agency. Furthermore, you need to explore the limitations on the power a dual agent has in your area. The greatest legal concern over a dual agency is the conflict of interest. This risk is posed by having a single real estate agent representing both parties involved in a single transaction. After all, how can you agent represent your best interests when they are also retained by the other side.
Needless to say, a dual agency has its fine points but it also has some major setbacks. Keep in mind that a dual agency arrangement is usually shrouded with conflicts of interest. Whatever route you decide to take with your choice of real estate agent ensure that you need someone that will have your best interests at heart.