Dual Agency Legal States 2025

Dual agency is when one real estate agent acts as both the selling and the listing agent in a real estate transaction. In other words, a dual agent represents both the buyer and seller in a real estate deal. Dual agency is illegal in the following eight states: Wyoming, Alaska, Vermont, Colorado, Flroida, Maryland, Texas, and Kansas. All the other states and the District of Columbia, permit dual agency. Even so, dual agency is not dominant in these states. The conventional method where a listing agent represents the seller and a selling agent acts for the buyer is still common. Dual agency has several pitfalls, which probably explains why it’s illegal in these eight states. Let’s explore the challenges of dual agency.

Disadvantages of Dual Agency

Competing Interests

Buyers trust their selling agent to get them the best deal in a real estate deal. In so doing, they expect their agent to negotiate the cost and get them the lowest prices. On the other hand, sellers trust their listing agent to get the highest bid for their property. This means that the agent will prioritize buyers who can pay higher prices. So, when one agent acts for both the seller and the buyer, a conflict of interest occurs. With the clash of interests, a dual agency may end up favoring one party in some way.

Dual Agency Presents a Higher Margin of Error

Dual agents handle twice the workload since they act for both parties. This means the paperwork and background checking is twofold. Therefore, the chances of the agent missing some details are high. Minor details like not having home insurance can sink a deal if something terrible happens to the property before the transaction is closed.

Dual Agency Gives the Agent the Upper Hand During Negotiations

A dual agent knows the non-negotiables for each party. Therefore, dual agents can leverage the information to favor their bottom line at the expense of the seller or the buyer. Even though dual agency is illegal in eight states, it has the following benefits.

Benefits of Dual Agency

An Honest Dual Agent Will Expedite the Deal: Dual agents can choose to use the information at hand to favor their case or use it to benefit all parties. A good agent will foster a friendly tone during negotiations, allowing the seller and the buyer to come to terms more amicably. Dual Agents Can Charge Lower Commissions: On average, the commission rate on a real estate transaction ranges from 5% to 6%. The listing and the selling agent usually share the commission. Since dual agents play both roles, they can offer clients lower commission rates and still make a profit with no liability to the seller or the buyer. Forms of Dual Agency: In states where dual agency is allowed, different forms of dual agency are possible. It can happen when a listing agent and a selling agent work for the same brokerage company. Dual agency also happens when prospective buyers without an agent ask the listing agent to represent them upon viewing a house under the agent’s portfolio.