Single, Dual & Designated Agency
~12 min read · Handle dual-agency consent, designated agents and transaction brokers.
Who represents whom, and can one brokerage stand on both sides? The exam maps single agency, dual agency with its consent machinery, designated agency's compromise, and the transaction broker who represents no one.
Single agency and its purity
Single agency: the brokerage represents ONE side — seller agency (listing) or buyer agency (representation agreement) — with undivided fiduciary duties. Exclusive buyer's or seller's brokerages make conflicts structurally impossible, at the cost of turning away half the business. Subagency (cooperating brokers serving the SELLER through the listing broker) still exists on paper but has been displaced by buyer representation nearly everywhere.
- One client, full OLD CAR duties
- Seller agency via listing; buyer agency via representation agreement
- Subagency: cooperating broker for the seller — now rare
Dual agency and consent
Dual agency arises when one brokerage (or one licensee) represents buyer AND seller in the same transaction. Where permitted, it requires informed written consent from both principals — disclosed BEFORE offers, not at closing. The duties compress: the dual agent cannot fully perform loyalty or complete disclosure to either side, so confidences (price flexibility, motivation) are protected for both while material property facts still flow. Undisclosed dual agency is a per-se license violation making the transaction voidable and the commission forfeit. Several states ban dual agency outright.
- Both sides, one agent/brokerage — informed written consent required
- Loyalty and disclosure necessarily limited
- Undisclosed = voidable deal + lost commission + discipline
Designated agency and transaction brokerage
Designated (appointed) agency: the BROKERAGE takes both sides but the broker designates a separate licensee for each principal — each designated agent owes full fiduciary duties to their client, while the broker manages the wall; the brokerage-level conflict is consented to, the agent-level conflict avoided. Transaction brokerage / facilitation: the licensee assists the deal WITHOUT representing either party — duties reduce to honesty, disclosure of material property facts, accounting, and ministerial competence; no loyalty, no advocacy. States vary on defaults and availability — exam answers follow the generic definitions.
Worked example
A brokerage lists the Meyer home with agent Kim. Agent Raj, same brokerage, has a buyer-client hunting that neighborhood. The buyer wants to offer on the Meyer home. Walk the options under (a) designated agency, (b) traditional dual agency, and (c) the mistake where nobody discloses anything.
(a) Designated agency: the broker appoints Kim for the Meyers and Raj for the buyer; each owes full OLD CAR duties to their own client, the broker polices the information wall, and both principals sign the brokerage-conflict consent — the modern standard resolution. (b) Traditional dual agency (say, one agent had both clients): both principals must give informed WRITTEN consent before offer negotiation; the agent then guards both sides' confidences and advocates for neither on price. (c) The silence scenario: the brokerage is already a common-law dual agent the moment both clients engage on one property — proceeding undisclosed is a license violation; either principal can void the transaction, the commission is forfeit, and discipline follows. The variable across all three is disclosure-plus-consent — the substance of the conflict never changes.
Common exam pitfalls
Consenting to dual agency at the closing table.
Consent must be informed and obtained before negotiation — retroactive signatures don't cure undisclosed dual agency.
Expecting full loyalty from a dual agent.
Dual agency structurally limits loyalty and disclosure — both sides trade advocacy for facilitation.
Calling a transaction broker an 'agent for both.'
A transaction broker represents NEITHER — honesty and fairness, no fiduciary advocacy for anyone.
One client: advocate. Two clients: consent and neutrality. No clients: facilitate honestly.
Recap
- Single agency: undivided fiduciary duties to one side
- Dual agency: both sides, informed written consent, limited loyalty/disclosure
- Undisclosed dual agency: voidable + forfeited commission + discipline
- Designated agency: brokerage holds both; separate agents give full duties
- Transaction broker: represents no one; honesty + material facts + accounting
- Disclose and consent BEFORE negotiation, always
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