Dual Agency Explained
In the past, the National Association of Realtors had noted that a growing number of Buyers desire to work directly with the listing agent on properties. In NC, if an agent or broker works with both the Seller and the Buyer, then the state defines such a relationship as “Dual Agency.” It simply means that the roles of the Seller’s Agent and the Buyer’s Agent are combined.
Many persuasion pieces have been written in the past to encourage Buyers to always use a Buyer's Agent because of an alleged difficulty the Dual Agent may supposedly have in advancing the interests of both the Buyer and the Seller. Most of what is written is misinformation. These people allege that a Dual Agent’s loyalty is divided between parties with competing interests. This is simply not true, especially for real estate agents working in North Carolina.
Savvy Buyers and Sellers must cut through the misinformation concerning Dual Agency and find out what it is really about. Working with a real estate agent serving as a Dual Agent is actually one of the best ways to buy and sell property!
Critics of Dual Agency purport that an agent cannot represent both sides equally. If it were an adversarial process, and real estate agents were lawyers, and home sales were court cases … then such thinking might be valid. In this courtroom type delusion the critics portray, there is always a winner and a loser— but this is just not the case in real estate sales!
In real estate deals, the Owner sells a property at a price they are comfortable with, and the Buyer gains a property at a cost that he or she is comfortable with. In such a transaction there is no loser.
The great American economist, Milton Friedman, stated: “The most important single central fact about a free market is that no exchange takes place unless both parties benefit.” It is upon this powerful capitalist principle that real estate brokers answer their call to duty as Dual Agents.
When trading value for value, everyone is a winner! It is not a zero-sum game like one finds in a court battle, where there is no value for either party except to win or lose.
It may come as a surprise, but as real estate agents and brokers, we do not represent a client, either Buyer or Seller, in the traditional legal sense concerning a real estate transaction. In fact, we are barred by law in NC from doing so. We cannot speak for them, we cannot sign for them, and we cannot bargain for them!
As a Dual Agent, we represent facts, and we represent a knowledge set that is or should be, of value to a client. We serve, in essence, as knowledge brokers on behalf of our clients.
Our fiduciary duty is not to give up a client’s information to another party, but to ensure that our clients are making decisions on the best knowledge, both of the property and process of attaining or selling the property, that exists.
The aim of a Dual Agent is to be a sales facilitator who brings a deal together that is acceptable to both parties. Discretion is paramount; thus the agent cannot disclose the financial or personal information of either party without permission. The fiduciary duties required of a real estate agent in North Carolina is a high standard ensuring professionalism.
An example of the benefit of using a dual agent is in disclosing known faults. A real estate agent is required by law to disclose any known defects with a property, and by default the Listing Agent should always have the superior knowledge of the property they list, versus someone serving as just a Buyer’s Agent.
Per North Carolina law, a Dual Agent must balance the interests of both Sellers and Buyers, and by doing this, they are objectively fair to both parties. Unlike working with just a Buyer's Agent or Seller's Agent, the Dual Agent is the one that can level the playing field for both Buyers and Sellers.
“Knowledge Is Power.” And that is the advantage that a Dual Agent brings to the table for their clients. Most all parties come out ahead with the professional real estate practice of Dual Agency, and it is indeed a wise decision to work with a firm or broker in this capacity.
Peter Franklin—Executive Managing Director, Foxfire Real Estate, LLC
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