What Is Dual Agency?

Dual agency occurs when a single real estate agent or brokerage represents both the buyer and the seller in the same transaction. In luxury real estate, dual agency is common — particularly in markets where a small number of dominant agents control a significant share of the inventory.

The fundamental conflict: A buyer's agent has a fiduciary duty to maximize value for the buyer — which means securing the lowest possible price and most favorable terms. A seller's agent has a fiduciary duty to maximize value for the seller — which means securing the highest possible price and most favorable terms. These obligations are directly opposed. A dual agent cannot fully serve both simultaneously.

Disclosed dual agency is legal in most U.S. states when both parties give written consent after the conflict is disclosed. The dual agent is then typically required to act as a neutral facilitator rather than an advocate for either party.

Designated agency is an alternative some brokerages use — where two different agents within the same brokerage represent the buyer and seller respectively. The agents are designated to represent their respective clients independently, though the brokerage itself has a relationship with both parties.

For luxury buyers: Dual agency is not automatically harmful — in some markets, it is the only practical way to access certain properties. However, buyers in dual agency situations should understand that they are not receiving full advocacy. In high-value transactions — particularly above $5 million — engaging independent legal counsel to review the purchase agreement is advisable regardless of the agency structure.