What is lost when entering into a dual agency situation?

In a dual agency situation, the agent represents both the buyer and the seller in the same transaction. This creates a inherent conflict of interest, which results in the loss of loyalty to either party. The agent cannot fully advocate for the best interests of both clients because the obligations that would normally bind them to one party conflict with their obligations to the other. This dual responsibility can lead to situations where the agent cannot provide the same level of advocacy and loyalty that would typically be expected in a single agency relationship.

Confidential information, such as the lowest price a seller is willing to accept or the highest price a buyer is willing to pay, must be managed carefully. The agent’s role is to maintain fairness, but this can compromise the confidentiality and loyalty that each party typically enjoys. Therefore, in a dual agency setting, the absence of exclusive dedication places the agent in a position where they cannot prioritize the needs of either party fully.