Dual agency is created when the same brokerage represents both sides in a transaction. Even if each side has its own agent, it’s technically dual agency if they both work for the same company. Single-agent dual agency, or “double ending” as it’s commonly known, happens when it’s actually the same agent representing both the buyer and seller in the sale of a property. It’s a pretty common practice, but is it a good idea?
There are plenty of agents who are happy to represent both sides in a transaction since they earn twice the commission, but there are a number of us who refuse to “double end”, and for very good reasons. Real estate transactions are complicated, and can involve quite a bit of negotiation. No matter how ethical and competent you are it’s impossible to negotiate effectively with yourself. An agent’s job is to act as an advocate not a mediator, and there’s no way one person can simultaneously be an advocate for two sides with opposing interests.
So why would a buyer want to get involved in such a situation? Some home buyers think they can gain an advantage by working with the listing agent to purchase a property. They assume they’ll get a better deal and have an advantage over competing buyers. What they often don’t realize is that they could be putting themselves at risk, as their agent has a fiduciary duty to the seller as well, and that’s pretty much the very definition of a conflict of interest.
We advise clients it’s in their best interest to have their own representation in a transaction. That means, for example, that if I’m holding an open house at my listing and I meet a potential buyer who’s interested in the home, I’ll refer her to another agent. Yes, I’m passing on an opportunity to make twice the commission on the sale, but I know that both my client (the seller) and the buyer need to have proper representation, and that can’t happen if I’m acting as agent for both sides. I take my fiduciary duty to a client very seriously, as any agent should, and the only way to perform that duty properly is to be looking out for that client’s interests above all else.
To be honest, it’s odd that the practice of single-agent dual agency is still legal, as it presents potential for all sorts of conflicts of interest and opens the agent up to potential liability. Attorneys will tell you that judges don’t look kindly on “double ending” agents when things go bad and they end up in their courtrooms. Perhaps at some point things will change and the practice will finally be banned, but until then we’ll steer clear anyway and we hope you do too.