2.2 Dual Agency and Transaction Brokerage
Key Takeaways
- Disclosed dual agency is permitted in Missouri with written informed consent from both parties
- In dual agency, the agent must be neutral and cannot advocate for either party over the other
- Transaction brokerage is an alternative to dual agency where the licensee facilitates without representing
- Dual agency disclosures must be made in writing and signed by all parties
- Failure to disclose dual agency may result in disciplinary action by MREC
Missouri permits disclosed dual agency and offers transaction brokerage as an alternative approach for in-house transactions.
Disclosed Dual Agency
A disclosed dual agent is a licensee who:
- Represents both buyer and seller in the same transaction
- Has written informed consent from both parties
- Cannot advocate for one party over the other
- Maintains impartiality between parties
When Dual Agency Occurs
Dual agency typically occurs when:
| Situation | Result |
|---|---|
| Buyer client wants to buy agent's listing | Dual agency (with consent) |
| Two agents in same brokerage represent buyer and seller | Company dual agency |
| Same agent represents both parties | Individual dual agency |
Missouri Dual Agency Requirements
Written Consent Required
MREC requires that real estate agents disclose to all parties if they are acting as a dual agent:
| Requirement | Details |
|---|---|
| Written disclosure | Must be in writing |
| All party signatures | Both buyer and seller must sign |
| Before acting | Consent before dual agency begins |
| Explain limitations | Must explain limits on advocacy |
Warning: Failure to disclose dual agency may result in disciplinary action by the Real Estate Commission.
Dual Agent Duties
The dual agent:
| Must Do | Cannot Do |
|---|---|
| Treat both parties fairly | Disclose confidential information |
| Act in good faith | Advocate for one party |
| Disclose material facts | Reveal negotiating strategy |
| Follow lawful instructions | Favor one party's interests |
Transaction Brokerage Alternative
Missouri offers transaction brokerage as an alternative to dual agency:
Transaction Broker Role
| Feature | Transaction Broker |
|---|---|
| Representation | None (facilitates only) |
| Advocacy | Cannot advocate for either party |
| Fiduciary duties | None (limited duties only) |
| Confidentiality | Must maintain for both parties |
When to Use Transaction Brokerage
Consider transaction brokerage when:
- Parties want assistance without representation
- Avoiding conflicts of dual agency
- Neither party wants an advocate
- Facilitating in-house transactions
Transaction Broker Duties
Transaction brokers must:
| Duty | Description |
|---|---|
| Honesty | Be truthful with all parties |
| Fairness | Treat all parties fairly |
| Disclosure | Reveal material facts |
| Competence | Perform services competently |
| Accounting | Account for all funds |
Comparison: Dual Agency vs. Transaction Brokerage
| Feature | Dual Agency | Transaction Brokerage |
|---|---|---|
| Representation | Both parties | Neither party |
| Fiduciary duties | Limited | None |
| Written consent | Required | Recommended |
| Advocacy | Neutral | Not applicable |
| Confidentiality | For both parties | For both parties |
Confidentiality in Dual Agency
Pre-Dual Agency Information
Information learned before becoming a dual agent:
- Remains confidential
- Cannot be disclosed without permission
- Must be protected even during dual agency
What Must Be Disclosed
Even as a dual agent, the licensee must disclose:
- Known material defects
- Property condition issues
- Environmental hazards
- Information required by law
What is required before a Missouri licensee can act as a disclosed dual agent?
What could result from failure to disclose dual agency in Missouri?