In North Carolina, our real estate contracts allow an agent to be a dual agent. What is it, and what does that mean for you?

Dual agency is when a real estate agent represents the seller AND the buyer in the sale/purchase of the same home. I am using the word “represents” loosely because the only thing represented in this case is the contract. In a typical sale where each party has their own real estate agent, the listing agent has a fiduciary responsibility to their seller, and the buyer’s agent has a fiduciary responsibility to their buyer. That means we get to hold their hand and guide them through the process to the best of our ability, offering advice on everything from negotiations to repairs and anything that pops up. When an agent is put in the position of a dual agent, they now work for both parties and must treat them fairly and equally. The agent is really working for the contract. They can help the contract move forward by scheduling repairs but can not advise on any money-related matter. For example, if a buyer asks what to offer on a house, I can show them comparable homes, but they must arrive at their own price to make an offer. When the seller receives that offer, I can only say, “You can accept it, reject it, or make a counteroffer. Which would you like to do?” I cannot help them frame a counteroffer. I can only provide them with their options. Regarding inspections and repairs, as a dual agent, I cannot give any advice concerning money, compensation, or credits. I can arrange for them to talk to professionals in that field (i.e., an HVAC contractor), but I cannot then help them in depth to frame compensation for that repair.

I have often been a dual agent on various properties and never had an issue. In fact, a few times I was told that being a dual agent was probably the only thing that kept the contract together because I was able to get my buyer and seller talking, and they agreed on terms that allowed them to close on the sale. Even so, I am starting to sour on dual agency, and I practice it less and less.

When selling land, I have no problems with dual agency. Land is relatively black and white. Survey, septic, water, utilities, maybe even a soil report. A lot can go wrong, sure, but it’s predictable. Commercial is another area where a dual agency can be beneficial. Commercial has a lot of disclosures and twists and turns, and having one person manage the flow of information helps both parties. But residential home sales? I offer dual agency less and less, and never if the seller is a friend of mine. The buyer has to trust that I am working fairly for everyone, and if the seller is a good friend of mine, there will be doubt in the buyer’s mind. Plus, why wouldn’t I want to represent my friend to the best of my ability?

Here is a situation where I am glad I refused dual agency, even though my seller was okay with it. My seller was a past client. I sold a home for her and her husband 5 years earlier. Since we had a previous relationship and since her husband had unfortunately passed away, I knew she needed some hand-holding. I didn’t want dual agency to hamper my ability to assist her. I wanted her to have my full attention. We discovered that the house had some deferred maintenance. If I represented both parties, I could not advise my buyer how to negotiate for repairs, what to ask for, or if they should ultimately walk away. I would also be unable to help my seller negotiate that repair request, advise if a price reduction was needed, or help her in any meaningful way that helped her understand what was happening with the contract and why. I have to be equal to everyone, which is sometimes impossible. So, more and more, I am ensuring that I am not in that position. I want to represent my clients in full.

For some final clarification, NC states that dual agency also applies if someone in my office represents the other party. Then, the same rules apply. I work in a small office with agents spread over several counties, so avoiding dual agency isn’t an issue for me. My clients come first. Always. Every buyer and seller has the right to request their agent work only for them. If you feel strongly that your agent should not practice dual agency, then insist on it or don’t work with that agent. How you are represented is important. Don’t settle for anything less.