The legal pitfalls of dual agency in real estate

  • Realtors refer to themselves as agents, but when it comes to the agency law, the brokerage is the “agent,” not the individual salesperson.
  • A dual agency situation can occur when the brokerage (not necessarily a single agent) represents both sides of the transaction.
  • Buyer's agents are constantly hearing the refrain: “We’ll just contact the listing agent directly.”
  • Off-market or pocket listings are also fraught with agency issues.

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For the first time in history, homebuyers are deliberately creating dual agency situations as many refuse to work with anyone but the listing salesperson. Couple this with pocket listings, lax agent attitudes toward dual agency issues, and a recent California Supreme Court decision and you have a perfect storm.