There’s an old adage – you can’t have your cake after eating it which means by eating your cake, you have nothing to eat later. In other words, sometimes people are faced with the problem of making a decision between two good options. However, this doesn’t work when you walk into the real estate industry as a dual agency doesn’t comply with that rule.
What is Dual Agency in Real Estate?
A dual agency is when a single agent represents both the buyer and the seller during the same transaction. Dual agency happens to be legal in many states but authority eyes are fixed on it just to protect the buyer and sellers from rapacious practices. For instance, some states request that dual agency is done with the consent of the buyer and the seller.
Here’s an instance of dual agency;
A client named Daniel hired a real estate agent to sell his home. At that moment, the agent also has a client named Tyler who is looking to buy a house in the market. The agent brings Tyler to take a look at Daniel’s home and decide it’s a good home to purchase. Now, the agents have represented both clients and kept the whole commission. Another scenario is when the agent representing Daniel is working for the same brokerage company as the agent representing Tyler.
A more complicated scenario of dual agency. For instance, Daniel is an agent and has a client willing to sell a home. Daniel gets a buyer for the home but the buyer is hoping for his home also in the market to be purchased before having money to purchase Daniel’s client home.
Now, Daniel gets into a listing agreement with the buyer to help the buyer sell the home so the buyer can purchase Daniel’s client’s home. Daniel stands out to benefit from both scenarios as a dual agent.
Dual Agency Benefits
- Dual agency has come with some advantages that can be used to balance the disadvantages that present concerns.
- Dual agency saves time. The agent can answer both clients’ questions and concerns without waiting for feedback from the opposing party’s agent representing the client.
- Dual agency makes transactions more simple and effortless for both parties.
- All events can be managed in a dual agency as a single agent is involved. This will make transactions faster.
- Dual agency also saves money, especially on the seller’s part. Usually, you are expected to pay a certain commission to your agent to split with the other agent, but in a dual agency case, you can further negotiate the commission down a bit.
Dual Agency Disadvantages
- One issue dual agency faces is trying to negotiate a balanced price. Trying to get the highest price for the seller as well as the lowest price for the buyer.
- A greedy agent might decide to work on a higher selling price to pocket more money as a commission.
- There is low loyalty in dual agency compared to single agents as one party will be there to point out the misstep and hidden concerns to another.
- Single agents can make more flawless transactions for both parties compared to dual agents.
PMD Realty Group has been providing professional home buyer and seller real estate representation since 2013. Our company values are service, honesty, integrity and work ethic. We always strive to exceed our client’s expectations. give us a call at 602.399.9233 if we can be of service in Goodyear, Litchfield Park, Buckeye, Avondale, Sun City, Surprise, Peoria and Glendale in the Phoenix West Valley.
We list and sell homes, property and real estate throughout the Phoenix Valley including Phoenix, Scottsdale, Palm Valley, Pebble Creek, Wigwam, Verrado, Estrella Mountain Ranch, Tempe, Mesa, Cave Creek, Carefree, Chandler, Apache Junction, Gold Canyon, Maricopa, Gilbert & Maricopa County.