Who Pays Commission in Dual Agency?

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By Dave Schafer Updated January 15, 2025
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Dual agency is when a single real estate agent represents both the buyer and seller in a transaction. Who pays commission in dual agency depends on what the parties agree to. The commission may be split between the buyer and seller, or the seller may offer to pay all of it as a concession.

Dual agency can lead to a simpler, faster transaction and easier communication. However, there’s also a high potential for conflict of interest, and both the buyer and seller may not get the full representation they deserve.

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What is dual agency in real estate?

We spoke to Rebecca Hidalgo Rains, CEO and Designated Broker of Integrity All Stars Realty, to get her take on dual agency.

She defines it this way: “The concept behind dual representation is that you have one person who’s going to help negotiate for both sides.” Typically, the buyer and seller have different agents, but in roughly 10–20% of transactions, a single agent represents both parties.[1]

Dual agency is a bit of a hot topic in real estate. Agents have a fiduciary duty to their clients (a legal obligation to act in the client’s best interest), and many real estate agents feel it’s too difficult for a single agent to adequately fulfill that duty to both parties in a transaction.

Depending on where you’re located, true dual agency may not exist, due to restrictions on what an agent can do as a dual agent. “A lot of people confuse dual agency with what we actually do, which is called limited representation,” says Hidalgo Rains. In limited dual representation, the agent can only act as a neutral facilitator, with no ability to advise.

🏛️ Dual agency is illegal in some states

In some states, dual agency is illegal due to the potential conflict of interest. It's extremely difficult, if not impossible, to adequately and fairly represent both sides of a transaction.

The practice is illegal in the following states: Alaska, Colorado, Florida, Kansas, Maryland, Texas, Vermont, and Wyoming.

Who pays commission in dual agency?

Traditionally, the seller pays the commission for both the listing agent and the buyer’s agent. In dual agency, one agent gets both commissions, covered by the seller, for a total of 5–6% of the home's sale price.

However, the National Association of Realtors (NAR) settlement last year changed things up — it’s no longer a given that the seller pays 100% of the commission. The new rules require buyers to sign their own agreements with their agents and be responsible for paying their real estate agent’s commission fees.[2]

Under these rules, a dual agent’s commission would be split between the buyer and the seller. However, sellers can still offer to pay the buyer’s agent fee as a concession, in which case the seller covers the entire commission.

Who pays commission in dual agency can also be market-dependent. Hidalgo Rains explains, “If it’s a hot market, sellers are not going to want to ... pay somebody else’s agent.” However, in a buyer’s market, sellers may be more willing to offer the buyer’s agent commission as a concession.

Is having a dual agent a good idea?

If you're the seller

In most cases, it makes more sense to find a listing agent who will represent solely your interests in the transaction.

Otherwise, you may not get the advocacy you need to secure the best sale price and terms. For example, this Reddit user shared: “Got burned years ago with ‘dual agency.’ Selling a house, listing agent brought in a buyer. Quickly became apparent that [the agent] was not working for me. Never again.”

Having a dual agent may work for you if:

  • Your top priority is selling fast: Dual agency may help speed up the transaction, since fewer people are communicating.
  • You know the buyer and have agreed on a price: In this case, the agent is only acting as a facilitator.

Having a dual agent is likely not a good option if:

  • You need agent support to negotiate: Agents representing both sides of a transaction are often limited to facilitator roles and may not be able to offer advice.

If you're the buyer

Dual agency rarely benefits the buyer. Even if the dual agent tries their best to be impartial, their commission is usually tied to the home’s sale price. So they will likely be biased, even if unconsciously, to sell the home for a higher price. It’s worth taking time to find a dedicated buyer's agent.

Many listing agents prefer working with a buyer who has their own agent. This eases the workload on the listing agent. Hidalgo Rains confirms, “I'd rather have the other [agent] if I'm representing the seller all day long. I want the buyer having representation.”

Having a dual agent may work for you if:

  • You know and trust the seller: If you and the seller are on the same page about price and terms, then you may not need individual agents to help you come to an agreement.

Having a dual agent is likely not a good option if:

  • You’ve never bought a home before: If you're a first-time home buyer, you likely need a dedicated agent to help you navigate negotiations and ensure you get a fair deal.

Pros and cons of dual agency

✅ Pro: Potential for lower commission

A dual agent gets the commission for both the listing agent and the buyer’s agent. Each agent normally gets a commission of 3% of the home’s sale price, for a total commission of 6%.

But a dual agent may accept 4.5% or 5% total. Even though the buyer and seller pay the agent less, the agent still gets more commission than they’d normally receive when representing only one side.

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✅ Pro: Easier communication

Communication between the buyer and seller can be much simpler with only one agent involved. This can lead to less frustration and a faster transaction overall.

❌ Con: High potential for conflict of interest

Conflict of interest is one of the biggest issues with dual agency. The interests of the seller and buyer in a real estate transaction are often at odds. The seller wants to get more money for their home, while the buyer wants to spend less.

Agents are required to work in the best interests of their clients (this is known as “fiduciary duties”). However, it’s extremely difficult for a single agent to cater to both of these interests. And since the agent’s commission is tied to the sale price of the home, this can create a bias toward the seller, even when the agent means well.

“We have to be able to treat everybody fairly and honestly in all ways," says Hidalgo Rains. "Say you have a client who shares some information with you that might be material to the other side. What do you do? It’s sticky. So that’s why we always want to have two agents.”

❌ Con: Lack of full representation

When one agent represents both the buyer and seller, neither party can get the full attention and representation of their agent.

Additionally, in many states, agents representing both clients are limited in what duties they can perform. They may only be able to act as facilitators for the transaction. This is known as limited representation.

How can I get a good outcome with a dual agent?

Do plenty of research

The more you know about the real estate market in your area and the more experience you have buying and selling houses, the better you’ll do with dual agency. Many dual representation scenarios are actually limited representation, which means the agent can't offer advice. Strong market knowledge and practice with negotiations are vital.

Use an agent you know and trust

Finding an agent you trust is always important, but it’s even more critical with dual agency real estate. Since the same agent is representing both the buyer and seller, you have to trust that they’ll handle any information you provide in an ethical manner. For example, as a seller, you need to be able to trust that the agent won’t share your bottom-line price or lack of offers with potential buyers.

What red flags should I watch out for?

Lack of transparency

One of the biggest red flags to watch for with dual agency (or any real estate transaction) is a lack of transparency about details. If an agent refuses to disclose information or fails to document details, this is a sign that you may need to look for other representation. There should be nothing to hide in a real estate transaction.

This is especially true as agents navigate changes following the NAR settlement. Says Hidalgo Rains, “For me, it's all about transparency and disclosure and documentation because that's the only way we're going to navigate this without getting in trouble somewhere.”

Agents selling their own homes

Agents are technically allowed to list their own homes and represent themselves, provided they disclose their ownership to potential buyers. They can even represent the buyer in these scenarios, as well. However, this can be a major red flag. In fact, some brokerages don’t allow their agents to list their own properties because of the potential for complaints and lawsuits.

For example, Integrity All Stars doesn’t allow its agents to list their own properties. Hidalgo Rains says, “In our brokerage, we don’t allow owner agents. I make my agents list with one of the other colleagues in our office to keep that other layer of protection for us, because otherwise, our insurance policy wouldn’t cover us.”

Does a realtor have to disclose that they're a dual agent?

Yes, a realtor needs to disclose that they're a dual agent. Each state has different laws about what needs to be disclosed and to whom. But at minimum, an agent must disclose to each party (buyer and seller) any other parties they’re representing.

Bottom line

Dual agency real estate is tricky. It can seem attractive to cut out another middleman and potentially pay less in commission. But you'll likely get less than full representation.

Hidalgo Rains explains, “The fact is when we create agency relationships with our clients, that comes with a whole carload of duties, our fiduciary duties, and you can't really provide true fiduciary duties to two parties equally and fairly. It just doesn't work.”

In a high-stakes transaction like a home sale, both the buyer and seller deserve an agent who can dedicate their full effort and attention to them.

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Selling your home with a dual agent is risky. When your realtor also represents the buyer, you don't have a dedicated agent to negotiate the best sale price and terms on your behalf.

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FAQ

Who benefits most from dual agency?

Generally, real estate agents benefit the most from dual agency, because they receive both the listing agent and buyer's agent commission.

What's the difference between dual agency vs designated agency?

The difference between dual agency and designated agency is that dual agency is a single agent representing both the buyer and seller, while designated agency is two agents from the same brokerage representing the two parties. With designated agency, the buyer and seller each get their own agent.

Why is dual agency bad?

Dual agency can be bad because it’s very difficult for a single realtor to effectively and fairly represent both sides of a real estate transaction.

Is dual agency good for the seller?

Dual agency is not good for the seller in most cases, as it can limit the ability to negotiate a better sale price. The main exception is if the seller just wants to sell quickly, as dual agency real estate can streamline the process in some cases.

What is single license dual agency?

“Single license dual agency” is essentially what’s meant by “dual agency.” It’s when a single agent, with a single real estate license, represents both parties in a real estate transaction.

Is dual agency legal in California?

Dual agency is legal in California, but undisclosed dual agency isn't. The practice is highly regulated and must be disclosed to all parties involved.

Is dual agency legal in Florida?

Dual agency in Florida is not legal.

Is dual agency legal in Georgia?

Yes, dual agency is legal in Georgia, as long as all parties involved have provided written consent.

Is dual agency legal in Tennessee?

Yes, dual agency is legal in Tennessee. It must be disclosed to both parties, and both parties must consent to it.

Is dual agency legal in Texas?

No, dual agency is not legal in Texas.

Related reading

Article Sources

[1] Consumer Federation of America – "The Agency Mess". Updated Jan. 14, 2019.
[2] National Association of Realtors – "What the NAR Settlement Means for Home Buyers and Sellers". Updated May 24, 2024.

Authors & Editorial History

Our experts continually research, evaluate, and monitor real estate companies and industry trends. We update our articles when new information becomes available.

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