Homes sell at a greater discount from their listing price when the same agent represents both the buyer and seller as a "dual agent," according to an analysis of 230,000 home sales in 22 markets around the country by technology-based real estate brokerage Redfin.
In the markets analyzed by Redfin, homes sold at an average of 95.6 percent of the list price when both buyer and seller were represented by a dual agent. That compares with a sale-to-list ratio of 97.2 percent for homes in which the buyer and seller had their own agents.
Consumer groups frown on it, calling it, at best, "nonsensical," at worst, "legalized fraud," but to the real estate industry, the practice of "double-ending" real estate deals, in some states referred to as dual agency, is a more nuanced practice — one that is fairly common and often acceptable under certain circumstances, though perhaps at times difficult to navigate.
Inman News recently conducted an online survey of agents and brokers — "Real Estate: Behind the Curtain" — that asked real estate professionals about the frequency and acceptability of more than three dozen customs and practices, including the practice of agents engaging in dual agency and other forms of "double-ending," or representing both buyer and seller in the same transaction.
Despite more than two decades of tinkering with the laws, regulations, customs and practices governing Realtor-client relationships, real estate brokers still view agency issues as their single greatest potential legal liability.
Realtor associations have lobbied for and won numerous changes to state laws and regulations, largely aimed at reducing their legal exposure while preserving their ability to earn commission on both the buyer and seller sides of a real estate transaction.