The Pros and Cons of Buying a Home Through a Seller’s Agent

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In most real estate transactions, a seller’s goal is to get the highest possible price for a property, and a buyer’s goal is to pay the lowest possible price. At first glance, this might make using a seller’s agent, also known as a dual agent, at cross purposes for completing a transaction that serves both parties equally well.

However, there are pros and cons to using a dual agent, and while it may make sense in some cases, in others, you’ll want an agent who only represents your interests.

Agency roles and laws vary from state to state. As of 2024, dual agency representation is legal in 42 states and the District of Columbia, but others have banned the practice.

Those states where dual agency transactions are illegal are Alaska, Colorado, Florida, Kansas, Maryland, Texas, Wyoming, and Vermont.

States that allow dual agency have differing laws as well. For example, in California, an agent is permitted to act as a dual agent only if the buyer and seller are both aware of and consent to the dual agency and the agent doesn’t disclose confidential information to the other party.

As explained on the broker’s disclosure form, all real estate agents in a transaction owe each client a fiduciary duty to act in that person’s best interest. That includes competency and skill in working for the client, dealing honestly, openly, and in good faith and disclosing all facts that materially affect the value and desirability of the property.

A dual agent who attempts to act on behalf of both parties to a sale risks violating the fiduciary duty to act only in the best interest of one client because the agent might have to balance the interests of both clients. This isn’t to say that using a dual agent isn’t preferable in some cases, but you must know when it’s appropriate and when it makes sense to engage separate agents.

The Pros of Using a Dual Agent

In a hot real estate market where properties are receiving a lot of interest, using a dual agent can help you beat out other competitors if you have a good sense of how much a home is worth. Also, the possibility of having a leg up on other buyers by having the seller’s agent know what the other offers are and helping you make the best offer could work in your favor.

If you’re not well versed in current market conditions, you run the risk of locking yourself into an agreement that may not be optimal. 

Using a dual agent also gives you flexibility to try and negotiate a lower commission structure. If an agent represents both sides, they may be willing to drop a commission from 6% to 5% to get the deal done and wind up with a nice payday.

For example, a $500,000 transaction can shave $5,000 off transaction fees – money that can be better put to other uses.

Better communication with fewer parties involved is another key benefit. While the dual agent must be careful not to disclose the wrong types of information, understanding both sides better through more direct contact means disagreements are less likely due to a breakdown in appropriate information flow.

Using a dual agent can also streamline the transaction because forms and documents can be prepared and signed more quickly, and offers and counteroffers can be communicated more quickly. When you remove one of the agent intermediaries, communication is faster and more efficient.

The Cons of Using a Dual Agent

The biggest concern when using a dual agent is whether or not they can maintain their fiduciary duty to both parties in the transaction. It’s possible, but agents must walk a fine line and finesse certain aspects of the transaction to ensure it is fair to both sides.

Smart agents will protect themselves legally by keeping good notes and records demonstrating that they have followed the obligation to maintain transparency and ethical standards. Concerns over a lack of transparency, whether valid or not, can undermine a good deal in dual agent transactions.

However, don’t assume you’ll receive special or confidential information from the other side just because you share an agent.

People should enter into real estate transactions with the understanding that a dual agent is ultimately working for the seller, and it’s not their job to find the buyer the best property that fits their needs. Their primary job is to close the deal so they can get paid.

Buyers who use a dual agent may believe their offer will be the best because they have an inside track. Don’t assume that’s always the case.

Other parties who make an offer on the property may look askew at the dual relationship, which could lead to legal actions that can derail an otherwise good transaction. 

Under real estate law, a dual agent may not disclose to the buyer that the seller will accept an offer for less than the listing price, unless the seller specifically agrees to this disclosure. Conversely, a dual agent may not disclose to the seller that a buyer is willing to pay more than they have offered for the property unless the buyer consented to that disclosure.