Dual agency is a concept that sometimes gets foisted upon unwitting home buyers, but it is pretty much never a good situation for buyers or sellers. At its heart, dual agency happens when a real estate agent represents both the home buyer and home seller. Why would an agent do this? In most cases, the dual agent double-dips on fees. Getting paid by both the buyer and seller is a great deal for the real estate professional, but this setup can result in inadequate services offered to either party. Let us go over how it works.
Dual Agency Is Not a Good Deal for the Seller
While the dual agent is motivated to sell the house, he or she is not necessarily incentivized to get the highest price for the seller. It is because the dual agent also represents the buyer, and the buyer wants to get the lowest price possible. Furthermore, because the dual agent represents both parties, he or she naturally wants to complete the sale between the two parties (not the seller and some other buyer). It means that the dual agent will most likely not expose the property to the widest possible pool of potential purchasers.
Dual Agency Is Not a Good Deal for the Buyer, Either
The dual agent is also not likely going to work for the buyer’s best interests. These include getting the buyer the best possible price on the house. Furthermore, because the dual agent is tied to the sale of a specific property, he or she is unlikely to show the buyer other properties that might fit the buyer’s needs better.
Does Dual Agency Have Any Benefits?
So, are there any perks to dual agency? For the most part, no. A would-be dual agent might say that it is more convenient for both parties to communicate with a single agent; but in the days where the communication between real estate parties can take place on a single application, this is not really an issue. Propy’s transaction platform simplifies the real estate closing process by bringing every task into one dedicated place.
If you are a buyer or a seller, avoid dual agency situations like the plague. Of course, an agent would love to be paid by both parties for a single real estate deal, but you, a buyer or a seller, would be better served by having your own personal agent.