Dual agency creates an unresolvable fiduciary conflict that most buyers do not understand they are accepting

What: In most U.S. states, a single real estate agent or brokerage can legally represent both the buyer and seller in the same transaction (dual agency), provided both parties give written consent. In practice, the consent form is buried in a stack of paperwork and rarely explained, and the agent has a financial incentive to close the deal at the highest possible price (maximizing their commission), which directly conflicts with the buyer's interest. Why it matters (5x so what?): 1. A dual agent cannot advocate for either party's negotiating position — they become a neutral facilitator — yet both parties are paying full commission rates (typically 2.5-3% each side) for a diminished level of representation. 2. So what? Empirical research (Kadiyali et al., 2014) found that dual agency transactions close at prices 1.7-4.6% higher than comparable non-dual-agency transactions, costing buyers thousands of dollars. 3. So what? The consent mechanism fails because buyers — especially first-timers — do not understand the legal distinction between a "fiduciary" and a "facilitator," and the disclosure form uses jargon that obscures the practical impact. 4. So what? Eight states (including Florida, Colorado, and Kansas) have banned dual agency entirely, demonstrating a regulatory consensus that informed consent cannot cure the inherent conflict, yet the remaining 42 states still permit it. 5. So what? Post-NAR settlement (2024), buyer agency agreements are now mandatory, but dual agency remains legal in most states, meaning the settlement's transparency gains are undermined when the same brokerage represents both sides. Structural root cause: Dual agency persists because it is enormously profitable for brokerages (capturing both sides of the commission) and because the consent requirement creates a legal safe harbor that insulates agents from liability, even though behavioral economics research consistently shows that consumers cannot meaningfully evaluate and consent to conflicts of interest in high-stakes, low-frequency transactions.