Can an agent represent both the seller and buyer if they have authorized designated dual agency?

QUESTION: I have a question about the new wording in the “Dual Agency” paragraph in the Exclusive Right to Sell Listing Agreement (Form 101) and the Exclusive Buyer Agency Agreement (Form 201). Let’s say I represent a seller and a buyer. When we entered into our agency agreements, they both: (i) initialed the dual agency authorization, (ii) checked the box authorizing the same individual agent to represent both the seller and the buyer in a transaction, and (iii) initialed the designated dual agency authorization. If my buyer client is interested in looking at my seller client’s listing, I would like to be able to continue representing both of them. In the new wording, it says that if the client authorizes designated dual agency, the firm will practice designated dual agency unless the client authorizes the firm in writing to remain in dual agency. Since, in my hypothetical situation, both the buyer and seller checked the box authorizing the same individual agent to represent both the buyer and the seller, is that sufficient authorization for me to be able to remain in dual agency so that I can show the buyer my listing?

ANSWER: We do not think that is sufficient authorization for you to represent both the buyer and the seller in the sale of your listing. The checkboxes where a party indicates whether or not the same individual agent may represent both buyer and seller are intended to address a situation where the firm is practicing dual agency but not designated dual agency. Stated differently, those two checkboxes are not intended to relate in any way to the designated dual agency choice appearing underneath the checkboxes. The checkboxes were added to the form so the client can indicate whether, in a dual agency situation, they authorize the same individual agent to represent them both as a single-agent dual agent or whether they authorize dual agency only if the other party is represented by a different agent in the same firm. Dual agency situations might arise in a number of ways. The firm may offer dual agency but not designated dual agency as an option or, if the firm does offer designated dual agency, it can’t be practiced in the particular situation for some reason. For example, if a seller authorizes designated dual agency but a buyer interested in seeing the listing only authorizes dual agency, the firm can’t practice designated agency. In that situation, the checkboxes would become relevant. If both clients have authorized single-agent dual agency, the same individual agent could represent them both; if not, the buyer could only be shown the seller’s property by  another agent in the firm.

Firms that practice designated dual agency should understand that the new wording in the designated dual agency authorization is much more than a simple authorization by the client for the firm to practice designated dual agency. It is a direction by the client to the firm to practice designated dual agency, and the expression of an expectation by the client that the firm will practice designated dual agency. Thus, if a situation like the one described in your question arises, we strongly recommend that you get something in writing at that time from both the seller and the buyer evidencing the fact that notwithstanding their expression of a desire for designated dual agency, they are okay with you representing them both as a dual agent. There is no need to amend the agency agreements; a simple exchange of emails would suffice.

© Copyright 2022 - 2023. North Carolina Association of REALTORS®, Inc.

This article is intended solely for the benefit of NC REALTORS® members, who may reproduce and distribute it to other NC REALTORS® members and their clients, provided it is reproduced in its entirety without any change to its format or content, including disclaimer and copyright notice, and provided that any such reproduction is not intended for monetary gain. Any unauthorized reproduction, use or distribution is prohibited.

Filed Under: Agency,