⚖️ Dual Agency Pitfalls: Are You Making These Mistakes? 🏡

Dual agency—representing both the buyer and seller in a single transaction—can be legal in some states, including Ohio, if allowed by your brokerage. However, it comes with significant risks and strict limitations. In this week’s Tuesday Training, Mike Ferrante of the 21 Mike Team at Century 21 HomeStar and Broker/Owner Tony Geraci unpacked the top mistakes agents make when navigating dual agency and how to avoid them.

🧐 What Is Dual Agency?

Dual agency occurs when the same agent (or brokerage) represents both parties in a real estate transaction. While it can seem efficient, it is a slippery slope where one misstep could land you in legal trouble.

Key distinction:

Designated Agency: Agent represents only one party.
Dual Agency: Agent attempts to represent both parties equally.

While it may be tempting to keep both sides of the commission, dual agency creates a unique challenge: how to remain truly neutral while protecting both clients’ best interests.

🚫 Common Mistakes to Avoid

1. Giving Specific Price Advice 💰

Wrong: “You should counter at $350,000.” Right: “Here is the market data. You decide what works best for you.”

2. Breaching Confidentiality 🤐

In dual agency, you owe confidentiality to both parties. If one side shares private negotiation details, you cannot disclose them to the other. Even casual comments can cause issues.

3. Skipping Full Explanation of the Limits 📄

Do not assume the disclosure form is enough. Take time to explain exactly what you can and cannot do as a dual agent. Many clients have never experienced dual agency and may not fully grasp the restrictions.

4. Overstepping Into Negotiation 🗣️

Acting as an advocate for one party over the other—even unintentionally—can open you up to liability. In dual agency, your role shifts from negotiator to facilitator.

✅ Best Practices for Safer Transactions

Refer unrepresented buyers to another agent to preserve neutrality whenever possible.
Stick to facts and data—avoid offering strategic advice.
Document all communications and keep them professional.
Seek win-win solutions rather than advocating for one party.
Use clear disclosures and revisit them throughout the transaction.

💡 Safe Phrases to Use

“Here are the facts so you can decide.”
“I cannot recommend a specific number, but I can share the market data.”
“Let’s review your options, and you can choose the best one for you.”

⚠️ High-Risk Phrases to Avoid

“If I were you, I’d take it.”
“Offer them $X, and they’ll accept.”
“Don’t worry, I’ll get you the best deal.”

📊 Example Scenario

Imagine you list a property in Cleveland Heights and an unrepresented buyer calls you directly. They love the home and want to make an offer. You now have a decision to make:

Proceed as a dual agent, disclose your limitations, and guide them only with factual information.
Refer them to another agent to protect both clients’ interests and avoid conflicts.

In many cases, the latter preserves trust and reduces your legal risk, even if it means sharing the commission.

📌 Final Takeaway

Dual agency should be approached with extreme caution—even if it is legal where you practice. In most cases, the safest route is to avoid it altogether. If you must proceed, know the rules, communicate clearly, remain strictly neutral, and document everything.

For expert guidance, connect with Mike Ferrante at 21Mike.com or schedule with Tony Geraci at Talk2Tony.net

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You can listen to our Podcast FREE BEER AND REAL ESTATE, or on YouTube for Mike’s weekly classes!!!

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