Dual agency in NYC real estate occurs when the same broker or salesperson simultaneously represents both the buyer and seller in a transaction. Dual agency is risky for a buyer because it means that the agent cannot offer undivided loyalty to the buyer, as would be the case when working with a dedicated buyer’s agent.
Typically, hiring an agent to represent you signifies the establishment of a principal agent relationship which is fiduciary in nature. For example, a buyer’s agent has the following fiduciary duties to the buyer: “reasonable care, undivided loyalty, confidentiality, full disclosure, obedience and duty to account.”
The key risk to a buyer under dual agency is that the listing agent is not necessarily incentivized to secure the lowest possible purchase price and most attractive deal terms since there’s no duty of loyalty to the purchaser.