What Is a Dual Agency in Real Estate and Should You Avoid It?

Buying or selling a home is already a big emotional roller coaster. You are choosing neighborhoods, comparing mortgage rates, juggling timelines, and hoping everything goes smoothly. Then suddenly your agent says something like, “By the way, I can represent you and the other party at the same time.”

That is the moment most people pause and think: Wait… is that allowed?
Welcome to the world of dual agency in real estate, one of the most debated topics in the entire industry.

Simply put, dual agency happens when one agent or one brokerage represents both the buyer and the seller in the same transaction. One professional is guiding two people who have two very different goals. The buyer wants to pay as little as possible. The seller wants to earn as much as possible. You can already imagine the tug of war.

Dual agency is legal in many states as long as both parties give written permission. But it is banned in others because regulators believe the conflict of interest is too significant to ignore.

Let’s break everything down so you can decide confidently whether dual agency is something to avoid or something you can work with.

A Quick Example of Dual Agency in Real Life

Picture this. You walk into an open house. The listing agent is friendly, gives you a tour, and explains everything clearly. You like the house and want to make an offer. You have not hired your own agent yet. The listing agent then says, “I can represent you too.”

In that scenario, that agent becomes a dual agent. The same agent would handle both the seller’s expectations and your offer strategy. That is where the concern comes in. Can one person truly give both sides the best possible advice?

That is the big question this article answers.

Is Dual Agency Legal?

Dual agency is legal in many states but heavily restricted. Some states say “Sure, go ahead, but only with full disclosure.” Others say “Absolutely not, it creates too much conflict.”

To keep this clear, here is a quick table.

Where Dual Agency Stands?

Some states even require extra paperwork to ensure both parties understand that the agent cannot negotiate aggressively for either side.

If you ever want to be a real estate agent or study agency law, you will see how much emphasis is placed on disclosure, honesty, and client protection. Schools like RealEstateU teach this deeply because it affects every future transaction.

Why Do Agents Offer Dual Agency?

You may wonder why any agent would want to take on both sides.

The reason is simple. Some clients prefer the convenience and speed. And from the agent’s perspective, they already know the property, the paperwork, and the communication flow.

Here are the most common reasons dual agency is offered.

Advantages For Buyers or Sellers

• You deal with one point of contact which sometimes makes communication faster.

• Paperwork tends to move quicker because both sides are guided through the same process.

• Some agents reduce or adjust commissions because they are not splitting the fee with another agent.

• The transaction may feel simpler if both sides already trust the agent involved.

There are certainly times when dual agency in real estate feels convenient. But convenience does not always equal protection.

Why Many Professionals Say to Avoid It?

If you talk to experienced brokers, real estate attorneys, or consumer protection experts, many of them will say, “Avoid dual agency unless you really know what you are doing.” There are reasons for that.

Here are the biggest concerns.

Major Drawbacks

• The agent cannot fully advocate for both sides at the same time.

• The buyer and seller cannot receive confidential negotiation strategies.

• One side may feel the agent is siding with the other.

• The agent may be motivated to close the deal quickly rather than negotiate the best price.

• Important details, motivations, or leverage points cannot be shared openly because it would harm the other client.

If you think about it logically, the conflict is built into the structure. You cannot push the price down for a buyer while pushing the price up for a seller. Something has to give.

Stats You Should Know Before Agreeing to Dual Agency

1. ​Studies show mixed effects on sale prices. Pre-disclosure legislation, dual agency correlated with 8% lower prices and faster sales (8.5% fewer days on market), but post-legislation impacts shrank to 1.4% lower prices with similar time reductions. Other research finds no overall price effect, but higher listing prices and quicker sales in dual agency

2. ​Non-NBER analyses like Gardiner (2007) highlight price discounts, while Kadiyali et al. (2008) note offsetting forces with neutral net prices. Consumer reports estimate billions in potential overcharges from double-dipping. Always seek independent representation to avoid divided loyalties.

When Dual Agency Might Be Acceptable?

Dual agency is not always a villain. In certain situations, it might work well.

Here are examples where dual agency in real estate could make sense:

• Both parties are experienced investors who do not need emotional or strategic hand-holding.

• The property is a straightforward transaction without complex repairs or contingencies.

• Both sides already know each other and simply need a facilitator.

• The market is extremely competitive and both sides prefer fast communication rather than strategic negotiation.

Even in these cases, both parties must enter the arrangement with eyes wide open.

Ethical Guidelines You Must Expect From a Dual Agent

If you ever accept dual agency, the agent should follow very strict ethical rules.

Here are the basics you should expect:

• They must be neutral and cannot push one side to win.

• They cannot share confidential info like a bottom price or maximum offer.

• They must treat both parties with fairness and honesty.

• They should clearly disclose how they are being paid.

• They must provide written documents explaining your rights.

Dual agency works only if everyone understands the boundaries. The agent becomes more of a coordinator rather than a negotiator.

How Dual Agency Affects Negotiation?

Negotiation is where dual agency becomes tricky. A traditional agent negotiates aggressively for your interests. A dual agent does not have that power. They cannot say things like:

• “Offer lower, the sellers are desperate.”

• “Raise your price, the buyers will probably pay more.”

• “Ask for repairs, they are willing to fix a lot.”

Those strategic details remain off limits. For many buyers and sellers, that lack of direct advocacy is the biggest downside.

The Role of Brokerages

Sometimes dual agency does not happen at the individual agent level but at the brokerage level. This is called “designated agency.”

In that structure, the broker represents both sides, but the buyer and seller get their own assigned agents within the company. That setup reduces the conflict but does not eliminate it entirely, because both agents still work under the same manager.

As real estate market trends evolve, many brokerages are tightening policies around agency types to protect clients more effectively.

​Not sure which brokerage is the best fit for you? Visit RealEstateU’s guide to choosing the right real estate brokerage and make a confident decision.

If You Want to Work in Real Estate, This Topic Matters a Lot

If you are someone wondering what you need to become a real estate agent, agency law will play a major role in your training. Understanding dual agency protects both your clients and your license. It is one of the first things students learn when exploring a career in real estate agent work, because the consequences of mishandling these situations can be serious.

Schools like RealEstateU cover these topics in detail because they shape how new agents behave ethically.

Should You Avoid Dual Agency?

Here is the honest answer.

Most people should avoid dual agency unless the situation is simple and both parties fully understand the limitations. If you want strong representation, aggressive negotiation, or maximum financial gain, then having your own agent is almost always the better choice.

Dual agency in real estate can work, but only when clients value convenience more than strategy.

​Would you decide to avoid dual agency after understanding the risks, or do you feel confident enough to navigate it with the right questions?

FAQs About Dual Agency in Real Estate

What is the problem with dual agency in real estate?

The core problem is the conflict of interest. A dual agent cannot fully advocate for both sides because their goals are opposite. This reduces negotiation power and can affect pricing, fairness, and confidence in the transaction.

Should I accept or decline dual agency?

Most buyers and sellers are better off declining it. Unless the deal is straightforward or you trust the process fully, having your own agent gives you stronger protection and more personalized guidance.

How do I know if someone is a dual agent?

You will know because the agent must disclose it in writing and ask for signed consent. If one agent or one brokerage represents both sides of the deal, it becomes dual agency.

What are the limitations of dual agencies?

A dual agent cannot negotiate aggressively, cannot share confidential motivations, cannot give strategic advice, and must remain neutral. They function more as a facilitator than a representative.