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Dual Agency and the 1031 Exchange Buyer

    3 cartoon style figures shaking hands with text on top saying "Dual Agency and The 1031 Exchange Buyer"

    The never-ending conversation about dual agency is always a fun topic to dive into as there are so many facets to consider but more so the stickier part which is can both sides be treated fairly or represented equally?

    Dual agency occurs when a real estate broker or agent represents both the seller and the buyer.

    My take is and always has been that, no, both sides cannot be represented equally because as a listing agent it is unlawful for you to disclose the seller’s position as in what is the real price that they will accept. 

    Depending on your specific state’s real estate department rules, some say that an agent owes a fiduciary duty to both parties. I say that’s impossible as the seller controls the value of a transaction, where a buyer has no skin in the game until they are under contract and even then, the seller still has more fiduciary exposure at risk as the buyer’s earnest deposit is only a fraction of the actual value of the property that is listed for sale.

    Dual agency is a controversial practice because of the potential for conflict that it presents. It puts the agent right smack dab in the middle of having to navigate the best interests of both parties at the very same time and that is simply impossible. I know this because I’ve been that agent. More times than not, I was left knowing that the buyer did not receive the absolute best price.

    This is one of the main reasons why I launched so that I could provide advocacy for the 1031 exchange buyer, the very buyer who is most likely to be a party to a dual agency transaction.

    Because of today’s technology and the way information is disseminated to the world, the public has access to listings and property availability more than ever before and it continues to get better every day. The issue with this is that many exchange buyers will go and do their own research which more than likely has them engaging with a listing agent – next thing you know because their identification clock is ticking, and they are moving forward with the purchase of an up leg with the listing agent that they engaged with and they are doing so with no representation.

    Without going into gory details, I don’t have to tell you that is simply not a good idea for an exchange buyer, especially one that is performing an exchange for the first time.

    Every buyer should be represented in a real estate transaction plain and simple. Look at it this way, if your parents were looking to preserve their wealth that would ultimately be yours, wouldn’t you want them to be properly represented in their exchange transaction? Of course, you would.

    If you are an investment property owner who is interested in a no obligation, private consultation, please visit, or contact James Bean of SVN-Rich Investment Real Estate Partners, CA DRE# 01970580, at 805-779-1031 or email at

    If you are an agent/broker, I am happy to discuss strategies with you on how to best serve your next listing client in preparing them for a successful exchange. Please visit the site and click on the Agent’s button located at the top right-hand corner of the Home Page!

    Don’t know what certain terms mean?

    Click here for a Glossary of Terms: 

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    All information is deemed to be accurate, and not advice. All investors/taxpayers should consult their CPA, tax attorney and investment advisors.