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NAR Settlement Made Dual Agency Worse, Not Better: What to Know
NAR settlement dual agency: the pre-showing agreement created a new trap for buyers. $1.49 billion lost in dual-agency deals over two years (Zillow). Designated agency is not a solution. Written prohibition is the only protection. Own Luxury Homes® 12-Point Agent Integrity Audit™ — zero dual agency, confirmed in writing.
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The NAR Settlement Made Dual Agency More Dangerous, Not Less: What Buyers and Sellers Must Know
$1.49B
Lost by sellers in dual-agency transactions 2023–2025 (Zillow May 2026)
$2,000+
Average per-transaction loss for sellers in dual-agency deals
Worse
Dual agency risk increased post-settlement due to new compensation negotiation dynamics
0
Acceptable instances of dual agency in any Own Luxury Homes® assigned transaction
One of the most dangerous misconceptions circulating after the NAR settlement is that it fixed the dual agency problem. It did not. The settlement removed compensation advertising from the MLS. It did not change the legal framework for dual agency in any US state. It did not require agents to choose one side. And it created a new pressure point — the pre-showing compensation negotiation — where the dual-agency trap can be set before the buyer has ever seen the property they want to buy.
How the Settlement Created a New Dual-Agency Pressure Point
Before the settlement, a buyer could walk into a showing without a written agreement and ask questions later. After the settlement, the buyer must negotiate compensation with an agent before the first showing. Here is how the trap works in practice: A buyer contacts a listing agent directly after seeing a property on Zillow. The listing agent says they can “represent both parties” or act as a “neutral facilitator.” A buyer representation agreement is signed, with the listing agent named as the buyer’s agent and the compensation tied to the listing-side fee. The buyer now has an agent whose fiduciary obligation is to the seller — in writing, before the first showing.
The Pre-Showing Trap
The new agreement requirement gives listing agents an opportunity to capture buyer representation at the moment of highest buyer interest — before the showing. A buyer who signs a representation agreement with the listing agent or with an agent from the listing brokerage has locked themselves into a dual-agency structure before understanding what they are giving up. The compensation the listing brokerage receives in this scenario is materially larger than in a two-agent transaction — which is exactly the financial incentive that creates the conflict.
The “Designated Agent” Fiction
Many brokerages defend dual agency by claiming they use “designated agents” — one agent from the brokerage represents the buyer, a different agent from the same brokerage represents the seller. The brokerage still receives both sides of the commission. The broker has both relationships. The designated agents share a supervisor, a commission structure, and a financial interest in closing the deal. This is not independent representation. It is the appearance of it.
What the $1.49 Billion Number Means at Luxury Price Points
Zillow’s May 2026 research found sellers in dual-agency transactions lost $1.49 billion collectively from 2023 to 2025, averaging more than $2,000 per transaction. That $2,000 average covers all price points from $200K condos to $20M estates. At luxury price levels, the actual negotiating leverage surrendered by dual agency is proportionally much larger.
| Sale Price | Avg $2K Avg Loss | 0.5% Agency Loss | 1.0% Agency Loss |
|---|---|---|---|
| $2,000,000 | $2,000+ | $10,000 | $20,000 |
| $5,000,000 | $2,000+ | $25,000 | $50,000 |
| $10,000,000 | $2,000+ | $50,000 | $100,000 |
| $20,000,000 | $2,000+ | $100,000 | $200,000 |
The $2,000 Zillow average covers all price tiers. At luxury levels, the real figure is multiples higher.
Where Dual Agency Concentrates in Luxury Real Estate
Dual agency is not evenly distributed across the luxury market. It concentrates in specific structures:
Compass Private Exclusives
When a Compass listing agent recommends a Private Exclusive strategy and a Compass buyer’s agent introduces the buyer, both sides of a $15M Beverly Hills transaction flow through one brokerage. The settlement removed compensation from the MLS but did not change the Compass Private Exclusive structure. This is the most common dual-agency vehicle in the LA luxury market.
Thin-Market Communities
In Palm Beach, Aspen, and Greenwich, a small number of dominant agents list most of the trophy inventory and represent most of the active buyers. When there are only 10 agents actively trading at the $10M+ tier, the same agent representing both sides is almost inevitable without deliberate, written protection.
Post-Settlement Buyer Capture at the Point of First Contact
As described above: the new pre-showing agreement requirement creates a window for listing agents to capture buyer representation at the moment of first contact, before the buyer understands the conflict.
How to Protect Yourself — Buyer and Seller
The protection is simple and non-negotiable: written no-dual-agency clause in every buyer representation agreement, and written no-dual-agency clause in every listing agreement. This clause must survive any property-specific negotiation and must apply to any agent from the same brokerage as the listing agent. An agent who resists this clause is an agent with a reason to want to be on both sides.
Own Luxury Homes® — 12-Point Agent Integrity Audit™
Own Luxury Homes® verifies every off-market specialist through our 12-Point Agent Integrity Audit™: zero dual-agency history in off-market transactions, a verified private buyer network independent of their brokerage, documented track record of recommending MLS when data supports it, and full disclosure of all compensation arrangements before engagement. No dual agency. Full seller representation. Assign a specialist now.
Ryan Brown, Principal Broker & CEO — Own Luxury Homes®
“The settlement changed the form. It did not change the incentive. An agent who earns both the listing commission and the buyer commission on a $10M transaction is earning a number that does not fit in a “neutral facilitator” frame. There is no neutrality at that commission level. The only protection is separation. We enforce it in writing before every transaction.”
Frequently Asked Questions
Is dual agency legal after the NAR settlement?
Yes, in most US states with required disclosure. Eight states ban or heavily restrict it (Alaska, Colorado, Florida, Kansas, Maryland, Oklahoma, Texas, and Vermont). In all other states, dual agency is legal with written disclosure. Disclosure does not eliminate the conflict of interest — it documents it.
How do I know if my agent has a conflict of interest?
Ask directly: (1) Are you the listing agent or from the listing brokerage? (2) Have you ever represented both buyer and seller in the same transaction? (3) Does your buyer representation agreement contain a no-dual-agency clause? Any hesitation on question 3 is a signal.
What is the difference between dual agency and designated agency?
Dual agency: one agent represents both buyer and seller. Designated agency: two different agents from the same brokerage represent each party. In designated agency, the brokerage still receives both commissions and the broker has both relationships. The conflict is structural, not eliminated.
Own Luxury Homes® — Never dual agency. Never designated agency as a substitute. Zero instances in the record of every assigned specialist. 12-Point Agent Integrity Audit™ confirmed. Find your fully independent specialist ›
"The introduction Own Luxury Homes® makes is to a specialist with documented closing history in your specific market — not the county, not the metro, the submarket you're actually selling or buying in. That's the standard we verify before your name goes anywhere."
— Ryan Brown, Principal Broker & CEO, Own Luxury Homes® (FL License BK3626873)