What dual agency actually costs a buyer

Question

Dual agency comes up often for first time buyers: an agent who has been showing a buyer around also lists a property that buyer likes, and a consent form arrives saying the agent will represent both sides, required to keep the process moving. The claim that commission gets cut in a dual agency situation, because one agent is doing both jobs and the seller saves money with some of that showing up in the buyer's price, isn't automatic. Some brokerages do reduce total commission on an in-house dual agency deal, but many don't, and nothing requires it. A consent form with no numbers on it, just disclosure language, is normal and doesn't by itself indicate anything is being withheld. Dual agency doesn't cost a buyer a separate fee. The real cost is representational: the agent can no longer advocate exclusively for either side, can't share confidential information like a seller's motivation to move on price, and negotiation on the buyer's behalf is inherently limited. If a lower total commission isn't mentioned anywhere in writing, asking directly whether one applies is worth doing before signing, since it should be either confirmed or explicitly ruled out rather than left ambiguous.

megan_doyle15 · Answer

You don't pay a fee for it. The consent form is just permission, it has no price attached, which is exactly why it confused me too.

omar_haddad · Answer

The discount thing is real but it's not automatic and it's not yours. Commission is a term of the listing agreement between the seller and the brokerage, signed before you existed. If that agreement says 5% total whether or not there's a cooperating broker, the firm keeps 5% and there is no saving to pass anywhere. Some listing agreements do have a reduced rate for the in-house case, maybe 4% instead of 5%. Even then the money belongs to the seller, not to you. You'd have to negotiate for it in the price like anything else, and your agent is the person who'd have to argue both sides of that.

samantha_ruiz · Answer

What you actually lose is advice, and it's worth naming because it doesn't show up as a line item. Once she's dual, she generally can't tell you the seller took a lower offer and it fell through, can't tell you the list price is high for the block, can't help you build a strategy for what to bid. She becomes a person who moves paper between two clients. On a 400k house, a bid you would have shaded 8k lower with real coaching is an 8k cost that never appears anywhere.

What those consent forms are permitted to say and when they have to be signed varies by state, and a few states don't allow the arrangement at all. Worth an hour with a local real estate attorney before you sign anything you don't understand.

jordan_ellis2 · Answer

Ask her one question in writing: what is the total commission on this listing, and does it change if you write the buyer side too. Six months of reading and that's the question I'd lead with, because the answer is a number and the form isn't.

The other thing keystone is circling. You can decline. Declining doesn't mean you lose the house, it means you bring your own buyer's agent and she goes back to being purely the seller's agent. She may tell you the seller won't pay a cooperating broker, and post-settlement that's a live negotiation rather than a fixed rule, so you'd be paying your agent out of pocket or asking the seller to cover it in the offer. That has a real cost, maybe 2.5% of price, and it might genuinely be worth it. Or it might not be on a straightforward deal. I don't think there's a clean answer and I'd rather you go in knowing that than think signing is free.

What dual agency actually costs a buyer

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