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Dual agency

Written by Federal Title on . Posted in Agents, Article.

There is a lot of confusion about Dual Agency, who can represent whom, what arrangements are legal, what paperwork needs to be completed etc. Keep in mind that Maryland requires full agency disclosure while DC and Virginia only encourage full disclosure.

To get started, we have defined some useful industry terms.

Buyer’s Agent (written agreement) – a licensed real estate broker, licensed associate real estate broker, or licensed real estate salesperson who has entered into a written contract and represents a prospective buyer in the acquisition of real estate for sale.

Presumed Buyer’s Agent (no written agreement) – a licensed real estate broker, licensed associate real estate broker, or licensed real estate salesperson who has a relationship with a buyer but no written contract, is presumed to be representing a buyer.

A presumed buyer’s agent may not prepare an offer or negotiate a sale for the buyer without prior written consent. The buyer does not have an obligation to pay to the presumed agent.

Cooperating Agent – a licensed real estate broker, licensed associate real estate broker, or licensed real estate salesperson who:

1. Is not affiliated with or acting as the listing real estate broker for a property; and
2. Assists a prospective buyer, as a subagent of the listing real estate broker, in the acquisition of real estate for sale.

Intra-Company Agent – a licensed real estate broker, licensed associate real estate broker, or licensed real estate salesperson who is designated by the real estate broker who the associate real estate broker or real estate salesperson is affiliated with to act as a dual agent on behalf of a seller or buyer in the purchaser or sale of real estate that is listed with that real estate broker.

Dual Agent* – a licensed real estate broker, licensed associate real estate broker, or licensed real estate salesperson who acts as an agent for both the buyer and the seller in the same real estate transaction.

*See Dual Agency Q&A below for your specific jurisdiction.

Seller’s Agent – a licensed real estate broker, licensed associate real estate broker, or licensed real estate salesperson who:

1. Is affiliated with or acts as the listing broker for real estate; and
2. Assists a prospective buyer in the acquisition of real estate for sale.

Dual Agency – Q&A

How does dual agency occur?

Maryland:
  • Same real estate company (under same broker) has an agency agreement for both the buyer and seller for the same transaction.
District of Columbia
  • Same real estate company (under same broker) has an agency agreement for both the buyer and seller for the same transaction. (Same as MD)
  • Same real estate agent has an agency agreement for both the buyer and the seller of the same transaction.

Who can have dual agency?

Maryland:
  • Only Licensed Brokers.
  • In MD a licensed broker is the only one to have dual agency. A licensed associate broker or a licensed real estate salesperson cannot have dual agency as an individual.
District of Columbia:
  • Licensed broker, licensed associate broker, or licensed real estate salesperson.
  • In DC, a licensed broker, licensed associate broker or a licensed real estate salesperson can have dual agency as an individual.

Who is a dual agent?

Maryland:
  • Licensed broker and intra-company agents as an extension of the broker.
  • In MD, the Broker and the intra-company agents for the same transaction are all dual agents. The intra-company agents are an extension of the broker. As a dual agent, broker and intra-company agents are not exclusively loyal to either the buyer or the seller. Although the intra-company agents have dual agent status through the broker, they cannot exchange confidential information about the buyer or the seller. The intra-company agents are able to perform their duties (i.e. negotiation of contracts, price, etc.) as if an exclusive agent for their client.
District of Columbia:
  • Licensed broker, licensed associate broker, or licensed real estate salesperson.
  • In DC, an individual licensed real estate person can be a dual agent. That individual must maintain the confidentiality of each client. In reality, the individual dual agent acts as a facilitator/mediator for that transaction.
  • Also in DC, the broker can designate individual licensed real estate agents that operate just like the intra-company agents operate in MD. The difference is that in DC, if the broker designates agents from within the company–one to the seller and one to the buyer – then the only dual agent is the broker. The designated agents are not dual agents and can exclusively represent their respective clients. (Remember, designated agents cannot share confidential information regarding their clients.)
If the broker designates agents for each of the parties to the same transaction, all of the parties must sign a disclosure and an acknowledgement as to the identity of their respective agent in addition to signing consent to dual agency.


Who consents to dual agency?

Both MD and DC: everyone-buyer, seller and broker

Is consent to dual agency mandatory?

In both MD and DC, no one is required by law to consent to dual agency.

In order for dual agency to exist and continue in a specific real estate transaction, each of the parties must voluntarily consent (in writing) to dual agency.

What happens if one of the parties doesn’t consent?

The broker can withdraw from the representation of the buyer, the seller or both. Note that the representation can be withdrawn for just the transaction involving dual agency.


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