Can a Real Estate Agent Represent Both the Buyer and Seller?

In many states, a real estate agent can represent both the buyer and the seller in a single transaction, a situation known as dual agency. Still, for most transactions, buyers and sellers choose to work with their own agent — a buyer’s agent for the buyer, and a listing or selling agent for the seller.

Here, we’ll explain how dual agency works, where it’s allowed, who pays commission in dual agency situations and the main advantages and drawbacks to this arrangement.

What is dual agency?

Dual agency is a situation in which one real estate agent represents both the buyer and seller in the same transaction. Because the agent has a fiduciary duty to both parties, they can’t employ strategies that benefit one party over the other. 

How does dual agency work?

In most real estate transactions, the buyer and seller each have their own representation who acts in their best interest. Usually, a buyer’s agent helps with searching for homes, preparing offers and negotiating on the buyer’s behalf. Likewise, a listing agent helps with pricing and marketing a property, managing showings and negotiating on the seller’s behalf. 

In a dual agency situation, the same agent represents both the buyer and the seller. To protect the interests of both parties, the agent often focuses more on sharing information, coordinating paperwork and keeping the transaction on track, rather than working toward a specific outcome for one party versus the other.

Both the buyer and seller must be aware of a dual agency arrangement and acknowledge and sign off on it.

Designated agent vs. dual agent

Dual agency isn’t the same as designated agency. In a designated agency situation, two different agents within the same brokerage represent each side (buyer and seller). Each agent fully represents and advocates for their client while the brokerage oversees the process. Designated agency preserves fiduciary duty, whereas dual agency requires neutrality.

In addition, dual agency isn’t the same as a transaction brokerage. A transaction brokerage relationship, also commonly referred to as a facilitator or intermediary, is a brokerage relationship that strictly handles the administrative aspects of a real estate transaction, rather than representing a buyer or seller’s interests. The agents typically owe a standard set of general duties that they would owe to any person in a transaction, but they do not owe heightened or fiduciary duties to either party. 

Is dual agency illegal in some states?

Some states prohibit real estate agents from serving in a fiduciary capacity for both parties in one transaction because of the potential for conflicts of interest. These states are:

• Alaska
• Colorado
• Florida
• Kansas
• Maryland
• Oklahoma
• Texas
• Vermont
• Wyoming

Note that although true dual agency is prohibited in these states, some of them still allow transaction brokerage relationships and designated agency. If you’re not sure about your state, review your state’s real estate laws. These are typically available through state judicial, legal or library websites.

Who pays commission in a dual agency?

Real estate commission practices vary by state and by agreement. In a dual agency situation, one agent or brokerage may receive the full commission unless the contract specifies otherwise. 

Pros and cons of dual agency

Dual agency can work in certain situations, but it’s not common and there are risks. Here are the conveniences and trade-offs to consider.

Pros and cons for sellers

Pros

• One point of contact for convenience and speed
• Potential to negotiate a lower commission with one agent

Cons

• Potential for conflicts of interest
• No dedicated negotiator to advise on offers, counteroffers, concessions or repairs
  

Pros and cons for buyers

Pros

• Easier or faster to schedule showings

Cons

• No dedicated negotiator to advise on offers or counteroffers
• Less support for first-time or inexperienced buyers

Final takeaways on dual agency

Dual agency can simplify a real estate transaction, but it also limits the advocacy and guidance you receive. Whether you’re buying or selling, it’s important to understand how representation works in your state so you can choose the arrangement that aligns with your goals.

Ultimately, it’s best to select the approach that helps you feel informed and confident throughout the transaction. For personalized support, you can work with a Zillow partner agent for your buying goals, or explore home-selling options to find the path that fits your needs.