What Is Dual Agency? How It Works and What to Watch Out For

• What it is: Dual agency means one agent or brokerage represents both buyer and seller in the same deal.
• Why it matters: It can streamline communication but limits how much either side is represented.
• State laws: Vary across the U.S. – banned in eight states, allowed elsewhere with written disclosure.
• Who it’s for: Best for experienced buyers and sellers who understand the tradeoffs.

In most real estate deals, whether you’re buying a condo in New York City or a house in Chicago, the buyer and seller each have their own agent. But sometimes, one real estate agent represents both sides in what’s known as dual agency in real estate. This setup can move things along quickly, but it also raises questions about whose interests come first.

What is dual agency?

Dual agency in real estate is when one real estate agent, or sometimes two agents from the same brokerage, represents both the buyer and seller in the same transaction. This arrangement – often called a dual agent setup – requires full disclosure and written consent from both parties.

The challenge is that a dual agent can’t fully advocate for one side without limiting their ability to represent the other. While dual agency agreements can simplify communication and speed up negotiations, they also raise concerns about fairness and potential conflicts of interest. Because of these concerns, dual agency laws differ across the country. Some states allow it under strict rules, while others ban dual agency entirely.

Dual agency laws by state: Where it’s legal, restricted, or banned

• Banned states: Alaska, Colorado, Florida, Kansas, Maryland, Oklahoma, Texas, Vermont
• Allowed with written disclosure: California, Illinois, New York, and most other states
• Restricted or modified forms: Some states, like North Carolina and Washington, use designated agency instead, where two agents from the same brokerage represent each side separately

How does a dual agency work? 

One agent for both sides

Dual agency can occur when a buyer hires an agent who also represents the seller of the same property. This can happen if a buyer meets the listing agent at an open house and decides not to hire their own representative, or simply when one agent is already working with both parties. This is more common in smaller markets where there are fewer agents available.

Designated agency within one brokerage

A variation of dual agency is known as designated agency. In this setup, two different agents from the same brokerage represent each side separately. While the brokerage is still involved on both ends, this structure is often seen as more balanced because each client has an agent committed to their interests.

Open house connection

Another common scenario is when a buyer meets the listing agent at an open house and decides not to hire their own representative. With proper disclosure and consent, that same agent can represent both the buyer and the seller throughout the transaction.

Dual agency disclosure and consent

In all of these situations, the dual role must be disclosed, and both parties are required to provide written consent. Once agreed upon, the agent, or brokerage, manages communication, offers, and negotiations while remaining neutral rather than advocating for just one side.

Neutrality in representation

The key feature of dual agency is that the agent must remain neutral. Instead of fully advocating for one party, the agent facilitates communication, manages paperwork, and guides the process without giving an advantage to either side. Because this neutrality limits how much guidance the agent can provide, it’s one of the main reasons dual agency is controversial.

Dual agency pros and cons

Pros

1. Faster communication: Because one agent or brokerage is handling both sides, information flows more quickly. There’s less chance of delays caused by back-and-forth between two separate agents.
2. Streamlined process: With a single point of contact, scheduling showings, drafting paperwork, and moving the transaction forward can feel simpler for both buyer and seller. 
3. Potential cost savings and commission negotiation: In some cases, the commission may be negotiated differently when only one agent is involved, which can reduce overall costs for one or both parties. Since the agent keeps the full commission, buyers and sellers can ask for a reduced rate.
4. Access to more buyers or listings: When the same brokerage represents both sides, sellers gain access to a larger pool of potential buyers through the brokerage’s network. Buyers may also get broader access to listings held within that same office.
5.  

Cons

1. Conflicts of interest: A dual agent cannot strongly advocate for one side without compromising their role with the other. This lack of full representation is the main concern with dual agency. 
2. Less individualized advice and limited guidance: Since the agent must remain neutral, they may not be able to provide detailed guidance on negotiations, pricing strategies, or contract terms. Confidentiality rules also mean they cannot share sensitive information that might benefit one party.
3. Risk of confusion or mistrust: If expectations aren’t clearly explained upfront, buyers or sellers may feel uncertain about whether the agent is acting in their best interest.
4. Lack of full advocacy: One of the biggest drawbacks is losing an agent’s undivided loyalty. In a dual agency arrangement, the agent cannot push for the very best deal for one side without disadvantaging the other
5. Room for error: With only one agent overseeing the transaction, there’s a greater chance of missing details, overlooking documents, or making mistakes that a second agent might have caught.

Is working with a dual agent the right decision for you?

Dual agency can make a transaction feel quicker and more convenient, but it’s not a decision to take lightly. Because the agent must remain neutral, buyers and sellers need to weigh the tradeoffs carefully before agreeing to this arrangement.

For buyers

Working with a dual agent may expand the number of homes you can easily view, especially if the brokerage has a wide network of listings. It can also simplify communication since the agent already works closely with the seller. However, buyers should remember that a dual agent earns the full commission and cannot provide tailored advice on how much to offer, what repairs to request, or how to negotiate for the best deal.

For sellers

Sellers may benefit from a more streamlined process and potentially faster sale. A dual agent can bring in buyers directly from their own brokerage, increasing exposure. On the downside, the agent also represents the buyer, which means they cannot push for the highest price or most favorable terms. For some sellers, this can limit profit or weaken their negotiating position.

When to use a dual agent

Dual agency may make sense in limited situations. If both parties already know each other and have agreed on terms, a dual agent can simply handle the paperwork. It can also work for seasoned investors or developers who are comfortable navigating negotiations without heavy guidance from an agent. In these cases, neutrality may not be a drawback, since both sides already know what they want.

When to avoid dual agency

First-time buyers and sellers are often advised to steer clear of dual agency. Because the agent must remain neutral, they cannot answer important questions such as “How much should I offer?” or “What repairs should I request?” For those new to real estate, this lack of guidance can lead to confusion and frustration. If you want strong advocacy, detailed advice, and someone fully in your corner, an exclusive agent is usually the better choice.

The bottom line: Is dual agency good or bad?

Dual agency can make a real estate transaction faster and more convenient, but it comes with tradeoffs. It’s often a good fit for experienced buyers and sellers who understand the process and can make informed decisions without full guidance. However, for first-time buyers or those who want strong advocacy, dual agency can be risky since the agent must stay neutral and cannot fully represent either side. Because state laws vary—with some banning the practice entirely—it’s important to check local regulations, weigh the pros and cons, and decide whether the potential benefits outweigh the risks for your situation.

Dual agency FAQs

1. What’s the difference between dual agency and designated agency?

Dual agency is when one agent represents both the buyer and seller, staying neutral without fully advocating for either side. Designated agency, also called appointed agency, happens when two agents from the same brokerage represent each party separately.

2. Is dual agency legal in every state?

Dual agency is not legal in every state. It’s banned in Alaska, Colorado, Florida, Kansas, Maryland, Oklahoma, Texas, and Vermont. Other states allow it but have strict rules about disclosure and consent. Dual agency laws vary by state and can change over time. Always check your state’s most recent regulations before proceeding..

3. Who pays the commission with dual agency?

In many real estate transactions, the seller pays the commission, which has traditionally been 5–6% of the sale price. However, commission structures can vary by market and are negotiable.  Normally, the commission is split between the buyer’s agent and the seller’s agent. In a dual agency arrangement, however, the same agent represents both sides and keeps the full commission. 

4. Can you negotiate a lower commission by using dual agency?

Yes. Buyers and sellers can often negotiate commission rates in any transaction, but dual agency may provide more leverage. Since the agent would otherwise keep the full commission by representing both sides, it’s reasonable to ask for a reduced rate. Advocating for yourself and discussing fees upfront can help ensure the arrangement benefits you as well as the agent.