Beware of the Double Ended Deal in Real Estate

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In real estate, a double-ended deal takes place when an agent represents both the buyer and the property seller within the same transaction. This practice is considered unethical and highly frowned upon, as it creates multiple problems for both buyer and the seller. As a matter of fact, this is illegal in some states in the U.S. and Canada.


Double-ended deal or double agency (where the real estate agent works as a double agent) creates a problematic scenario –  the agent must negotiate the lowest possible price for the buyer and the highest possible price for the seller.

real estate double end deal

But how does this happen?


Double-end deals happen when an interested buyer contacts the agent who represents the seller of a specific property. In an ideal world, the agent should balance both the interest of the buyer and the seller while brokering for the transaction.


Though this scenario is rare, it is important to note they exist and it can happen to you.


The problem with double ended deals

Below are a few of the potential issues that could arise from this type of real estate transaction:

  • Unavoidable conflict of interest. In many cases, the interest of the buyer and the seller diverge from one another.
  • It can cost the buyer more as double agents tend to favor sellers to earn a higher commission
  • The agent can collect commission on both sides after a sale is made.

A good real estate agent would opt for a flat fee rather than the traditional percentage-based commission for the property’s sale price for their service.


This is why it is important for both buyers and sellers to familiarize themselves with the real estate laws in their state to avoid this kind of pitfall.

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So how do you avoid the double ended deal pitfall? Easy, find the right agent.


The best way to go about this is to take the possibility of the scenario out of the equation by finding an honest real estate agent who will work in your best interest. But how do you find the right agent? There are a few factors you need to be on the lookout for.


Do your homework: research and compare


Buying a house is probably the biggest financial transaction you will do in your life. Thus, it is good to take your time and search for the one who will work for your best interest. There are many trusted reviews online. You can also check out their website and LinkedIn profiles. Try to reach out to their previous clients and ask about their experience regarding their agent.


Research multiple agents and compare them from one another. Compare at least three agents and choose the one you think you’re comfortable with. They will be listing leads for you so you must be diligent in choosing the right one.


Don’t be socially obliged to hire someone


You may know someone who’s a real estate agent – perhaps a relative, a college or high school schoolmate, or a colleague. Hiring someone you personally know as a real estate agent might sound ideal but it does not always pan out well.


This is a pretty common dilemma for real estate buyers. The problem with this is that, oftentimes the line between business and friendship is blurred in the engagement. Hiring a realtor in the basis of social obligation is definitely the easiest way to get your hands burnt.

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Location is a huge plus


You already know that the previous experience of your real estate agent is extremely important. This includes the experience in a particular location. A realtor who’s experienced in your preferred location can help you find and close the property that you specifically want. Thus, make sure your realtor knows your desired neighborhood and that he or she has experience in working in properties in your preferred area.


Why you need your own agent


If you’re a buyer, then you need a buyer’s agent. This agent will have you sign a buyer’s broker agreement and spell out his legal obligations and duties. He or she will also make sure your down payment, home appraisal, and the home inspection will go without any hiccups, conditions, or hidden fees.


If you’re a seller, then you need a seller’s agent. He or she will have you sign a listing agreement, and lay out his obligations and duties as your agent.


An agent’s responsibility or fiduciary duties is often summarized using the acronym OLDCAR.

  • Obedience – to always follow your instructions
  • Loyalty – put your interest first
  • Disclosure – disclose all material facts that might influence your decision
  • Confidentiality – must not disclose anything about you without your permission
  • Accounting – account and report all documents and funds related to the transaction
  • Reasonable care – advance and protect your interest

The saying “You cannot serve two masters at the same time” is highly applicable in this matter. A double agent cannot advance your best interest. You need to beware of agents like them because you could get the raw end of that deal.