Dual Agency Agreement

Dual Agency Agreement

A Dual Agency Agreement is a legal arrangement in real estate transactions where a single agent or brokerage represents both the buyer and the seller in the same transaction. This scenario can arise when the agent has listings for both parties or when a buyer approaches the agent who is representing a property they are interested in.

In a Dual Agency Agreement, the agent has a fiduciary duty to both parties, meaning they must act in the best interests of both the buyer and the seller. However, this can create conflicts of interest, as the agent may struggle to negotiate effectively for both sides. To mitigate these conflicts, the Dual Agency Agreement typically requires full disclosure and consent from both the buyer and the seller, ensuring they understand the implications of such an arrangement.

For example, if a real estate agent represents a homeowner selling their house and is simultaneously working with a buyer interested in that same property, this would constitute dual agency. In many jurisdictions, the law mandates that both parties be informed about the dual representation and must agree to it, often in writing. This agreement stipulates how the agent will handle negotiations and the sharing of information, which can be critical for maintaining transparency and trust between all parties involved.