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Dual Agency in Real Estate: The Conflict of Interest Explained
Dual agency: 1 agent represents both buyer and seller. Legal in most states with disclosure, but structurally conflicted. Agent cannot advise buyer to offer lower OR advise seller to hold firm. Banned in 8 states including Texas, Colorado, Florida, Maryland. 3% commission incentive to close both sides may affect advocacy. Designated agency (same brokerage, different agents) has similar issues. Own Luxury Homes® 12-Point Agent Integrity Audit™ — we do not practice dual agency.
Dual Agency in Real Estate: The Conflict of Interest Explained
Dual agency — one agent representing both buyer and seller — is legal in most states but creates an unavoidable conflict of interest.
Why Dual Agency Is Structurally Conflicted
A buyer's agent's job: get the buyer the best price and terms, advise offering lower when possible, and surface any seller motivation. A seller's agent's job: get the seller the highest price and most favorable terms. Dual agency makes both impossible simultaneously. The agent becomes a facilitator, not an advocate. Some states (California recent changes, Alaska, Colorado, Florida, Maryland, Texas, Vermont, Wyoming) prohibit it outright.
Designated Agency: Better, But Similar Issues
Designated agency (two agents from the same brokerage represent opposite sides) is better than a single dual agent but still has issues: both agents share a managing broker financially interested in both transaction sides, and agents at the same firm may informally share information. True independence means your agent has no financial relationship with the other side's agent or their brokerage.
How to Protect Yourself
1. Ask your agent before any offer: "Do you represent the seller, or does anyone in your brokerage?" 2. Before signing a buyer's agency agreement: "What is your dual agency policy?" 3. If dual agency arises mid-transaction, you have the right to request independent representation. 4. In dual agency, your agent's fiduciary duty is limited by their simultaneous duty to the other party.
“I do not practice dual agency. If a buyer client wants to purchase one of my listings, I refer them to an independent agent with no compensation from the referral. The conflict is not hypothetical — it is structural. I cannot simultaneously advise the buyer to pay less and the seller to accept nothing less than full price. Those are opposite jobs.”
— Ryan Brown, Principal Broker & CEO, Own Luxury Homes®
Is dual agency legal?
Dual agency is legal in most U.S. states with written disclosure and consent from both parties. It is prohibited in several states including California (recent changes), Alaska, Colorado, Florida (residential), Maryland, Texas, Vermont, and Wyoming. Where allowed, written consent is required. Legal disclosure does not eliminate the structural conflict of interest.
Should I allow dual agency?
Generally no, unless you fully understand the limitations. In dual agency, your agent cannot fully advocate for your interests. You lose the independent guidance that is the primary value of representation. If you choose to proceed, request a clear written explanation of what the agent can and cannot do on your behalf in the dual agency context.
Own Luxury Homes® — 12-Point Agent Integrity Audit™. Audit your agent ›
"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)