Part 2 discusses Dual Agency, which explains how an agent can ‘represent’ the interests of both the buyer and seller in the same transaction on a property listed with that agent’s company.  The conflict of interest inherent in this type of agency relationship was discussed in Part 2. 

Dual Agency with designated sales associates is a more recent twist on dual agency.  The principal broker can assign two sales associates, one representing the buyer as a ‘buyer’s agent’, and the other representing the seller as a ’seller’s agent’.   This assumes that both the buyer and seller have been properly informed of the drawbacks and pitfalls of dual agency, that they each give their consent to this form of  ‘agency’, and allow the dual agent the ability to create a conflict of interest. 

The principal broker and each designated sales associate are still dual agents, meaning that they cannot provide undivided (full) loyalty to their respective ’client’, and cannot provide full disclosure or advocate for their best interests.  The buyer and seller are on their own to decide how to negotiate price and terms, and to decide what is right and wrong about the property being offered, and the transaction itself.  Each designated sales associate merely acts as a facilitator to bring the transaction to a closing.  

The degree of advocacy each designated sales associate can offer is to provide moral support, act friendly, serve milk and cookies, and recommend the best restaurant in town. 

The designated sales associate for the buyer cannot help the buyer negotiate for the lowest possible price and best terms, and can’t disclose any known physical deficiencies, or functional and locational defects or deficiencies.  That’s left up to the buyer- or the buyer’s home inspector, or their uncle (and self-proclaimed real estate expert)- to uncover.  By law the agent must disclose any known physical defects (but not deficiencies) to the buyer.     

The designated sales associate for the seller cannot help the seller negotiate for the highest possible price and best terms, and cannot disclose any information about the buyer that would give the seller an advantage over the buyer.  

Of real concern is maintaining confidentiality of sensitive information between the two agents.  While the agents cannot disclose certain information to their respective ‘clients’, each agent must maintain the confidentiality of sensitive information about their respective client.  Information found in office files, computers, fax machines, office meetings, or just talking by the water cooler can be shared and used to the disadvantage, or advantage, of one client over the other in the transaction. 

Why is this form of dual agency now offered?  Simple.  Follow the money trail.  With many traditional seller’s agents claiming they can also be ‘buyer’s agents’, this is a very profitable business model.   A company which sells it’s own listed property ‘in-house’, while claiming it can represent the interests of both the buyer and seller at the same time in the same transaction, collects both sides of the commission- double the money. 

Dual agency and dual agency with designated sales associates permits a conflict of interest to occur, while contradicting the very meaning and essence of agency:  placing the goals and interests of the client above those of the agent and anyone else in the transaction at all times by law.

Dual agency is good for the real estate company, but not so good for home buyers.   Dual agency places the goals and interests of the real estate company above those of the buyer and seller, by allowing a conflict of interest to occur.  Dual agency contradicts the very meaning and essence of true agency.