The true price of dual agency

In my attempt to write an article on the contradictions and complexities of dual agency (also known as double ending a deal) in real estate, I found myself with so many thoughts that I decided to turn it into a series after reviewing various court cases and literature.


I will begin by presenting some ideas for consideration, and in the upcoming articles, I will delve deeper into each idea individually.

“If two consenting adults choose to attempt a transaction through one agent…I argue they should bear more responsibility in the outcome.”

During my research, one thing that stood out was the focus on the actions and responsibilities of the real estate agent, with little consideration for the behavior of the parties involved, who are both consenting adults.

I also noticed a flaw in how the law handles dual agency in real estate. The legal system often treats real estate transactions as adversarial from the beginning, even though both parties typically aim to reach a mutually satisfactory agreement. If two consenting adults choose to work with one agent, they should take on more responsibility for the outcome, provided that they consented with full disclosure.

The human tendency that exacerbates dual agency can be likened to a joke about two horse traders. This tendency is evident in real estate transactions, where both parties seek to benefit but also fear being taken advantage of.

“The added risks involved, in my opinion, more than justify the full commission being paid to the one agent, yet both parties often expect a reduction.”

Often, one party, typically the buyer, requests their agent to negotiate with the other party on their behalf without involving a second Realtor. This places the agent in a difficult position, as they are expected to act in the best interests of their client while navigating conflicting expectations.

The expectation of a “deal” from both parties creates a conflict of interest for the agent. The more information the agent provides to one party, the less likely a deal may be reached, leading to uncertainty about payment for the agent’s efforts.

“Finally, under fiduciary duty, we are expected to place our interests beneath those of our clients.”

Seeking a “deal” is not illegal or unethical, as it is a common aspect of human nature. However, this desire for a deal can complicate the fiduciary duty of real estate agents, especially when dealing with active investors.

Under fiduciary duty, agents are expected to prioritize their clients’ interests above their own. While this is understandable, it raises questions about how much agents should diminish their own interests in favor of their clients.

Stay tuned for more detailed discussions on these topics as we explore each one further in upcoming articles…