Dual Agency & Designated Dual Agency - What's the Difference?

Buying or selling a home can be an exciting and stressful experience, especially if you're unfamiliar with the real estate industry. As a home buyer or seller in North Carolina, you'll come across different terms and concepts related to real estate transactions. One such term is "dual agency," which refers to a situation where a real estate brokerage or agent represents both the buyer and the seller in a single transaction. However, in North Carolina, there's also a concept known as "designated dual agency," which differs from traditional dual agency in several ways. In this article, we'll explain the difference between dual agency and designated dual agency in North Carolina real estate.

What is Dual Agency?

In a typical real estate transaction, the seller hires a listing agent to market and sell their property. The listing agent is responsible for finding potential buyers and negotiating a deal that's in the seller's best interest. At the same time, the buyer hires a buyer's agent to help them find a home that meets their needs and budget. The buyer's agent is responsible for representing the buyer's interests during the transaction.

However, in some cases, a real estate brokerage or agent may represent both the buyer and the seller in a single transaction. This is known as "dual agency," and it can occur when the listing agent and the buyer's agent work for the same brokerage and confidential client information has or will be shared between the brokerage agents. In this scenario, both agents (or one agent if both buyer and seller are represented by the same agent) have a legal obligation to be fair and impartial to both parties and must not disclose any confidential information to either party without the other's consent.

The downside of dual agency is that it can create a conflict of interest, as the agent(s) may not be able to represent either party's best interests fully. For example, in negotiations, the agent(s) may have to strike a balance between the buyer's desire for a low purchase price and the seller's desire for a high selling price. This can lead to compromises that neither party is entirely happy with.

What is Designated Dual Agency?

To address the potential conflicts of interest that can arise in dual agency, North Carolina has a concept known as "designated dual agency." This is a situation where the brokerage firm that represents both the buyer and the seller assigns different agents to exclusively represent each party.

In designated dual agency, the brokerage firm has a "dual agency" relationship with both the buyer and the seller, but each party has their own "designated agent." The designated agents are responsible for representing only their client's interests and must not disclose any confidential information to the other party or the other party's agent.

Designated dual agency offers several advantages over traditional dual agency. For one, each party has their own representative who is solely responsible for advocating for their best interests. This can lead to better negotiations and outcomes for both parties. Additionally, designated dual agency ensures that confidential information is not shared between the parties or their agents, reducing the risk of conflicts of interest or breaches of confidentiality.

How Does Designated Dual Agency Work in North Carolina?

In North Carolina, designated dual agency is legal and is an option for real estate brokerages. However, it's important to note that designated dual agency is not the default option for brokers. Brokers can only use designated agency if they obtain written consent from both the buyer and the seller on the Working With Real Estate Agents Disclosure form. The written consent must include the following information:

• A statement indicating that the brokerage firm will be representing both the buyer and the seller in the transaction

• A statement indicating that the brokerage firm will be designating one agent to represent the buyer and another agent to represent the seller

• A statement indicating that the agents will not disclose confidential information to the other party or the other party's agent

• A statement indicating that the agents will advocate for their respective clients' interests

The consent must be obtained no later than the time an offer to purchase has been made or accepted, but preferably before the brokerage firm begins to provide brokerage services to either the buyer or the seller. Whenever you have committed to working with a real estate agent, you should have this conversation with them (if they haven't already introduced the topic to you).

After years in advertising and marketing, living and working for companies in Georgia, North Carolina, and China, I decided to acquire my real estate license so I can use my established marketing and communications skills to help others and work for myself.

For many people, buying and/or selling their home is one of the most important and most stressful times of their lives. Having an advocate and an agent who has experienced years of corporate marketing, managing teams through challenging projects with tight deadlines, and negotiating complex deals - will aid in the home buying or selling process.

If you or anyone you know is interested in real estate investment, a personal real estate search, or property management, please reach out to me directly - I would love to provide my services to help find your goal property as soon as possible.

Bo Hardegree, NC REALTOR®
Espin Realty
[email protected]
704-748-0958