Dual Agency is when a licensed Realtor represents both the Buyer and the Seller in a transaction. This is not legal in all States so it is important to ask check your State laws to see if it is legal, if your Realtor finds themselves in that situation.
In Illinois, Dual Agency is legal as long as both the Buyer and the Seller consents to the dual representation. This is performed through Dual Agency disclosures. An example of such a disclosure can be seen in this Listing Agreement.
Complexities with Dual Agency
Dual agents are restricted in releasing confidential information about either client, and they cannot give preferential treatment to either party to the transaction. Client’s of dual agents sometimes become frustrated that the agent will not communicate with them beyond relaying information to and from the other client
Real estate agents often have a better idea of a property’s true market value than the seller or buyer. In most cases, they also know the lowest price a seller is willing to accept or the highest the buyer is willing to offer. However, a dual agent is restricted in using this knowledge to complete the transaction.
Discussions with either client about the price to offer or accept can lead to violations of the dual agency agreement and possibly result in the revocation of the agent’s license. For this reason, their knowledge of the market and experience in selling property is of limited value to either party.