Dual Agency – Buyer-Buyer and Seller-Seller

Most REALTORS® are familiar with the classic dual agency scenario of a brokerage firm representing both the buyer and the seller in a transaction. HAR provides the “Dual Agency Consent Addendum” which helps to advise clients on what that entails for a both the buyer and the seller. What is less clear is how to handle dual agency in a Buyer-Buyer or Seller-Seller scenario.

A Buyer-Buyer dual agency is where a brokerage firm represent clients, many of which may be interested in the same properties to purchase. In that case, clients may feel that the brokerage firm is hurting their ability to make good offers by secretly outbidding them for their other clients. This is unlikely to actually occur, but the perception that buyers are being constantly outbid is hard to control without setting expectations appropriately. One way to mitigate any potential claims from a client is to sign a Buyer’s Representation Contract, which discloses that the brokerage firm may be representing multiple buyers and explicitly states Buyer will not be privy to the offers made by other buyers represented by the brokerage firm.

While agents are often apprehensive of getting clients to sign the Buyer’s Representation Contract early in the relationship, for the purposes of disclosing dual agency, it would be helpful to make it clear as early as possible.

Seller-Seller dual agency has many of the same concerns, but the Exclusive Right-to-Sell Listing Contract takes care of these concerns in the same way that having a client sign the Buyer’s Representation Contract does.

The big takeaway from this should be that dual agency of all kinds should be disclosed, it’s a requirement under the Hawaii Administrative Rules for representing both Buyer and Seller, but also for Buyer-Buyer and Seller-Seller dual agency. This prevents clients from feeling misled due to a client of your brokerage firm getting the house or sale that your client wanted.