As a real estate agent, one of my duties when working with clients is to explain agency law - who represents who in a transaction. Buyers are represented by Buyer Agents and Sellers are represented by Listing Agents. Dual agents, however, ‘try’ and represent both the Buyer and the Seller in a transaction. I say ‘try’ because I don’t believe there is any way you can truly represent the interests of both parties.
Most people recognize the benefits of having a real estate agent on their side in a transaction. The process can be long and complicated with many pitfalls along the way. And most people only buy or sell a home several times in their lifetime. With an agent on your side, you have someone fighting for your interests, negotiating for you and protecting you from situations that can be detrimental to your interests.
An agent owes their client a fiduciary duty - the highest standard of care. In legal terms, the person who has a fiduciary duty is called the fiduciary and the person to whom he or she owes the duty is typically referred to as the principal or the beneficiary.
Except with Dual Agency. In dual agency, the agent can’t push for what is best for either side.
I’ve always avoided dual agency because I see it as a conflict of interest. In addition, it has been reported that more agents get written up for an ethics violation trying to do dual agency than any other reason.
Why would an agent act as a dual agent? Simple, because they want to collect both sides of the commission.
Why would a buyer or seller agree to dual agency? Simple, because they don't know any better or feel pressured in to accepting it.
Dual agency is legal in MD, VA, & DC, but there are important distinctions in how it is defined.
In Maryland, a single agent is prohibited from representing both the buyer and seller in the transaction. However, if both agents have the same Supervising or Managing Broker, the broker is deemed a Dual Agent.
In DC and Virginia, it is legal for one agent to act as a Dual Agent and represent both parties. In DC & Virginia, if two agents have the same Managing Broker, the agents are considered Designated Agents.
In all cases, both parties must consent, in writing, to agree to dual agency. You can consent to dual agency when you start working with an agent, but you need to consent again once a specific property you want to buy is identified or if you are the seller, once you receive an offer on the property.
In Virginia, the written disclosure is pretty clear on what you are not receiving by consenting to dual agency:
Knowing that, why would you ever consent to dual agency?