Can one agent work for both the buyer and seller?

Welcome to Part 3 of a three-part miniseries on representation in New York real estate, presented by More For LES.

In Part 1, we met Herb and Reba Suburbsky, who hired an agent to sell their nearly $5 million Lower East Side condo. In Part 2, Lyle and Lori Lowereast walked through the door, fell for the apartment, and learned an important lesson: a friendly and helpful listing agent still represents the seller.

We left off with a relatively straightforward arrangement. The Suburbskys had an agent representing their interests. The Lowereasts could hire an agent to represent theirs.

But then Lyle and Lori asked the listing agent a seemingly simple question:

“Can you represent us, too?”

Welcome to dual agency.

Two Clients, One Agent

Dual agency occurs when the same real estate agent represents both the seller and the buyer in the same transaction.

It’s rare, and it’s legal in New York — provided it is properly disclosed and both parties give their informed consent.

But think about what that means in the context of our transaction. The listing agent already knows the Suburbskys would like to move before the beginning of the school year. They’re incentivized to leave. Perhaps, privately, Herb and Reba (the Suburbskys, our sellers) have acknowledged that while they're asking $4.995 million, there's a number below that they'd happily accept to get the deal done.

Now the same agent learns that the Lowereasts have lost three apartments, love this one, and could stretch to $5 million.

Each piece of information would be extraordinarily useful to the other side.

And the agent is now primed to represent both.

The Problem With Undivided Loyalty

Ordinarily, an agent owes their client undivided loyalty. A seller's agent advocates for the seller. A buyer's agent advocates for the buyer.

But those interests naturally collide.

The Suburbskys want the highest possible price. The Lowereasts want the lowest possible price. Herb and Reba might prefer an earlier closing. Lyle and Lori might need more time. One side may want contingencies that the other would prefer to eliminate.

An agent representing both sides can't provide the same undivided loyalty to each client that two independent agents could provide separately.

Nor can the agent freely disclose everything they know.

The agent can't tell the Lowereasts, “Herb and Reba really want to be gone before school starts, and I think $4.7 million gets this done.”

They also can't tell the Suburbskys, “Don't take $4.7 million. Lyle already told me he'd go to $5 million.”

Those are precisely the kinds of confidential facts an agent is ordinarily expected to protect.

So while dual agency doesn't eliminate an agent's duties to either client, it necessarily limits aspects of the representation — particularly the undivided loyalty and full disclosure each party might otherwise expect from an agent representing only them. Tricky, right?

Disclosure and Consent

Dual agency can't simply happen because it makes a transaction easier. Both the buyer and seller must understand the relationship and consent to it.

In New York residential transactions covered by the agency disclosure requirements, the parties are presented with a disclosure explaining that a dual agent represents both buyer and seller and therefore cannot provide either party with undivided loyalty.

What’s critical here is consent.

The Suburbskys need to know that the person they hired to advocate exclusively for them would now also represent the people trying to buy their apartment. The Lowereasts need to know that the person they're asking for representation already represents the people from whom they're trying to obtain the best possible price and terms.

Both sides can agree to that arrangement, but they should also understand what they're agreeing to.

So What Does the Agent Do?

Let's say the Suburbskys and Lowereasts consent to dual agency.

Lyle and Lori offer $4.6 million. Herb and Reba counter at $4.9 million. Now everybody turns to the same agent.

“What do you think we should do?”

That's where the limitations of dual agency become very real.

The dual agent can facilitate the transaction, communicate offers and counteroffers, provide factual information, explain the process, and continue performing duties that don't require favoring one client over the other.

But the agent has to be careful about advice that would compromise the interests or confidential information of either party. The dual agent knows things. They just can't necessarily use everything they know to help one client defeat the negotiating position of the other.

For some buyers and sellers, that's perfectly acceptable. They understand the limitations and are comfortable proceeding. Others may prefer independent representation precisely because they want an agent who can advocate exclusively for them.

One Brokerage, Two Agents

There's another version of this situation worth understanding.

Suppose the Lowereasts don't ask the listing agent personally to represent them. Instead, they work with another agent at the same brokerage. That doesn't automatically make the underlying agency issue disappear.

New York allows a form of dual agency involving designated sales agents, in which the brokerage's dual agent designates one salesperson or associate broker to represent the seller and another to represent the buyer.

In our case, one designated agent could work with the Suburbskys while another works with the Lowereasts.

This allows each family to have a specific agent advocating for them within the transaction, while the brokerage remains involved with both sides. (What a potential win for the brokerage!) The arrangement still requires appropriate disclosure and informed consent because the designated agents operate within a dual-agency structure.

The distinction matters, particularly in New York City, where large brokerages can have hundreds or thousands of agents and it's entirely possible for a buyer and seller to arrive at the same transaction represented by different people working under the same brokerage.

Read Before You Sign

Real estate transactions generate a lot of paperwork, and agency disclosure forms can easily become one more document placed in front of a buyer or seller for signature.

They shouldn't be treated that way.

The point isn't merely to collect a signature. It's to make sure everyone understands the relationship. Who represents you? Who represents the other party? Does the same agent represent both of you? Are different agents from the same brokerage involved? What confidential information can your agent protect?

And, perhaps most importantly, whose interests can your agent advocate for without limitation?

Back on the Lower East Side, Herb and Reba still want their 4,000 square feet, a backyard, golf, and fewer shared elevators. Lyle and Lori still want enough room for Sida, her growing collection of stuffed animals, and perhaps another child without leaving the neighborhood they love.

They may ultimately agree on a price. The Lowereasts may get the apartment. The Suburbskys may get their suburban home. Everybody may walk away delighted.

But whether you're buying or selling, there's one question worth answering before you start revealing how badly you want the deal: Who does your agent actually work for?