Concerns With Dual Agency Relationships in Real Estate

If you are a licensed real estate agent or broker, it’s not at all unusual to find yourself in a dual agency situation – one where you and another professional employed by the company you work for are on both sides of a real estate transaction, or one where you are helping a client sell their home so that they can purchase a home where you represent the seller. Both situations create some risk for you as a licensed professional.

Generally speaking, in states that allow dual agency, disclosure is key. It’s important to know what needs to be disclosed, how it needs to be disclosed, and what you are and are not allowed to do in a dual agency situation if you want to avoid facing disciplinary action from your state’s licensing body. The LLF National Law Firm’s Professional License Defense Team can help you meet your state’s requirements and can defend you if you’ve been accused of misconduct as a result of a dual agency situation. Call us today at 888.535.3686 or fill out our contact form, and we will schedule a confidential consultation to go over your situation and explain how we can help.

Two Main Types of Dual Agency

There are two main types of dual agency relationships, each of which has the potential to cause problems for your real estate license.

Salespeople From the Same Agency on Both Sides of a Deal

With the increase in large, multi-office, multi-agent real estate companies, it’s also increasingly common for agents or brokers who work for the same company to be on both sides of a real estate transaction. Because each professional works for the same company, there is a danger that the best interests of the parties involved – the buyer on the one hand and the seller on the other – may take a backseat to the interests of the company that both of the professionals work for.

One Salesperson Represents the Same Customer in Two Transactions

The other situation is when a buyer needs to sell their property before they are able to purchase another one. The agent selling the property that the buyer wants to purchase agrees to act as the listing agent for the property that the buyer needs to sell before they are able to make the purchase. Here, the sales professional’s interest in doing both transactions increases the risk that the interests of the client will be compromised – either in connection with either or both transactions.

Why Dual Agency is a Potential Disciplinary Issue

The relationship between a licensed real estate professional and their client is meant to be a fiduciary one. That means that the sales professional is supposed to have the best interests of their client in mind at all times. When two professionals from the same company are on either side of a transaction, one representing the buyer and the other representing the seller, it can be easy for the two of them to work together to maximize the benefits for the company instead of for their respective clients.

Similarly, when a single sales professional represents a buyer who needs to sell a property before they are able to purchase a property that the same professional is listing for sale, the potential is there for the professional to push to complete both transactions – even if doing so is not in the client’s best interests.

What to Do to Help Avoid License Discipline for Dual Agency Issues

The key, in states that permit dual agency relationships, is disclosure. Typically, each sales professional involved in a dual agency relationship needs to disclose the relationship to their client, explain what it means when it comes to the effect it has on the fiduciary relationship, and get the consent of the client in writing to the dual agency relationship. It’s important to understand what your state requires when it comes to dual agency relationships, make sure that you do what’s required to protect your license, and make sure your client understands the situation.

The LLF National Law Firm’s Professional License Defense Team Can Help

If you are a licensed real estate professional and have questions about whether your state permits dual agency relationships, how to properly disclose and document those relationships in states that do permit them, or how to defend yourself if you’ve been accused of misconduct as a result of a dual agency situation, the LLF National Law Firm’s Professional License Defense Team can help. Our experienced attorneys understand the laws, rules, and regulations that apply to real estate licenses in states all across the country. We’ll help guide you so you avoid problem situations and we are here to defend you and your license if your state’s real estate board is investigating you as a result of a misconduct complaint.

Call the LLF National Law Firm’s Professional License Defense Team today at 888.535.3686 or use our contact form to schedule a confidential consultation with one of our experienced attorneys.