When a Broker represents both the buyer and seller in the same transaction, there is the potential for Dual Agency to exist. More specifically, dual agency is created based on the involvement of the affiliated licensees of the broker.
When the buyer and seller are represented by the same broker, but different licensees respectively, the relationship is known as a Designated Agency Relationship. In the event there’s only one sales associate involved in the transaction and the brokerage only represents one party, there’s no risk of dual or designated agency.
There’s a common misperception that exists in the industry: If I sell my own listing, it’s always dual agency. This is simply not always the case. You can sell your own listings and not be in a dual agency situation. When selling your own listing, a dual agency scenario is based on there being a BBA with the buyer (with you as the agent) in addition to the Sellers Listing agreement signed (with you as the agent). (more…)