Dual Agency, Conflict Of Interest?
By Jim Palmer Jr.

In Washington State real estate brokers are allowed to be dual agents while some states do not allow that practice (ie. Alaska, Colorado, Florida, Kansas, Maryland, Oklahoma, Texas, Vermont). The very thought of dual agency can give attorneys nightmares because of the inherent conflict of interest!

Dual agency is when a listing broker finds a buyer for the property they already have listed and then writes the purchase agreement while representing both parties. These dual agents have created a contract and probably have a good relationship with the seller first, and then along comes a buyer who wants to purchase that listed property.

When contemplating dual agency, some of these buyers may be nervous about the possible conflicts of interest, but many of them quickly brush that thought aside because they want to have more direct contact with the seller.
When dual agency goes bad, it typically goes very bad, but I have to say from personal experience that it rarely goes bad when the broker is honest because they have the tendency to create harmony instead of friction.

Negative comments from sellers and buyers after experiencing a rough transaction using dual agency usually include the sentiment that they felt like the agency representation was not exactly equal, which is likely always true, but they probably also got most of what they wanted, which may have been the exact same outcome even if they had used an opposing broker to represent only their interests.

 There is a compelling reason why buyers and sellers may prefer dual agency besides the obvious bonus of being able to negotiate a lower commission. Communications in transactions can in fact be more streamlined and less cumbersome when there isn’t another personality in the middle. In addition, because they can access both sides without interference, listing brokers can easily decipher the real status of a buyer’s loan process instead of having to read between the lines.

 When acting as a dual agent, they don’t become just a facilitator, but they become more like a facilitator in finding a solution that works for both parties. The Law of Agency offers clarity when it says that dual agents; 1) May take no action that is adverse or detrimental to either party’s interest in a transaction. 2) Timely disclose any conflicts of interest, 3) Advise both parties to seek expert advice on matters that are beyond the dual agent’s expertise, 4) Do not disclose any confidential information.