My best friend is a commercial litigator. Sometimes we talk business, and the one thing he can never wrap his head around is dual agency in the real estate world. As a litigator, he spends his days defending his client and attacking the opponent. He can’t understand how a real estate broker can represent both sides of a deal in a productive way.

The simple answer is this: unlike a litigious scenario, parties involved in a real estate transaction don’t necessarily have opposing interests. Sure, a buyer wants to pay as little as they can and a seller wants to achieve the highest price possible, but these are typically the only interests at odds. Once a price is determined, the rest of the process is working together through due diligence to achieve a set of common goals.

For this reason, unlike in residential real estate, dual agency is the common practice in commercial real estate. In fact, I prefer to work as a dual agent and my clients prefer it as well, because it means there is a single common denominator in the transaction. In my experience, if there are agents representing both sides of a deal, communication can be muddled. Even if there are not opposing opinions from both parties, agents may not effectively communicate that to each other. If one agent is able to move between both parties and know all of the information involved, there is a much better chance of coming to an agreement.

Of course, there is sensitive information that cannot be passed between buyers and sellers by a dual agent; however the information that can be shared will likely be communicated more effectively and clearly. If a client has full confidence in their broker, they should want their broker to have a full field of vision.

At Kiser Group, it is safe to say that 95 percent of our clients favor dual agency because they understand the benefits this can bring and that it results in a more successful, streamlined transaction. A common misperception is that commercial brokers like to be dual agents so they can “double end” a transaction. Dual agency has nothing to do with fees, only with lines of representation within a transaction.

Just like you often need a good diplomat in politics or an arbitrator in business deals, a successful real estate deal benefits from a good broker who can move between all players in a transaction. From my litigator friend’s perspective, I understand why he might find the dual agency concept a bit foreign. But when parties want to work together to achieve something beneficial to everyone involved, it makes all the sense in the world to have one party negotiating a deal in a dual agency capacity.

– Lee Kiser