Undisclosed Dual Agency: When Your Real Estate Agent Is Working Both Sides

The biggest risk in a real estate deal is not always a bad foundation or a leaky roof. It is an agent whose loyalty is divided and who never tells you. When you hire a real estate agent, you expect them to represent your interests. That means they owe you fiduciary duties: loyalty, confidentiality, disclosure, and accountability. They are supposed to negotiate for you, not against you. But in many transactions, the same brokerage ends up representing both the buyer and the seller. That is called dual agency. It is legal in some states, but only when both sides give informed written consent. Too often, the consent is treated as a formality, and the client never understands what they are giving up.

In a dual agency arrangement, the agent cannot fully advocate for either side. They cannot tell the seller to hold firm on price while also telling the buyer to offer less. They cannot share the seller’s bottom line with the buyer or the buyer’s maximum budget with the seller. They become a referee, not a coach. If that is explained clearly before you sign anything, you can decide whether it is acceptable. If it is hidden until closing, or buried in a stack of papers, that is misconduct. The problem is not dual agency itself. The problem is undisclosed dual agency, where you think you have an advocate and you actually have a middleman.

Watch for an agent who encourages you to work directly with the listing agent to “save money” or “make the deal easier.” That sounds helpful, but it often means you have no one in your corner. The listing agent represents the seller. Their job is to get the best price and terms for the seller. They may be friendly. They may answer your questions. But they are not your agent. If you sign a buyer’s representation agreement, read it carefully. Ask if the brokerage ever represents both sides. Ask if the same agent will handle both sides. Ask how they get paid and whether dual agency changes their commission. If they dodge the question, pay attention.

Broker misconduct also shows up in referrals. Many agents hand you a list of preferred lenders, title companies, inspectors, and contractors. Some of those referrals are honest and helpful. Others come with undisclosed kickbacks. Federal law generally prohibits certain referral fees in real estate settlement services unless they are disclosed and permitted. If your agent insists you use their in-house lender or title company, ask why. You have the right to shop around. You can choose your own inspector. You can hire your own attorney. If an agent says a seller will only pay for certain closing costs if you use a specific provider, question it. That can be a sign of steering, not service.

Another common problem is the phantom bidding war. An agent tells you there are multiple offers and you need to bid far above asking price. Sometimes that is true. Sometimes it is invented to push you higher. If you are the seller, demand written proof that all offers were presented. If you are the buyer, ask your agent to confirm in writing that your offer was submitted. Keep copies of every text, email, and document. Real estate moves fast, and memory fades. A paper trail protects you if you later need to file a complaint.

Pocket listings are another area to watch. A seller’s agent may keep a home off the multiple listing service and sell it to their own buyer. That can mean less exposure, fewer offers, and a lower sale price for the seller. The agent may collect both sides of the commission while the seller gets a quick, quiet deal. If you are selling, ask whether the home will be on the MLS. If the agent says they already have a buyer, ask whether that buyer is their own client. You are allowed to demand full market exposure.

Fees are another place where bad brokers operate. Commissions are negotiable. Administrative fees, transaction fees, and broker processing fees are not automatic. They must be disclosed and agreed to. If new fees appear at closing, do not just pay them. Ask for a written explanation. If the explanation does not match your original agreement, refuse to sign until it is corrected. You can also contact your state real estate commission. Licensing boards take undisclosed dual agency, kickbacks, and failure to present offers seriously.

Before you hire anyone, interview at least three agents. Ask how many dual agency deals they handled last year. Ask for references from clients with similar needs. Read every contract before you sign. Do not rely on verbal promises. If you are not comfortable with the paperwork, hire a real estate attorney to review it. In most states, an attorney is not required, but it is often the cheapest protection you can buy.

Your home is likely your largest financial asset. Loyalty is not a courtesy. It is a duty. If your agent cannot clearly tell you whom they represent, how they get paid, and whose side they are on, walk away. No house is worth giving up your voice at the negotiating table.