Dual Agency in Real Estate: A $1.49 Billion Problem for Home Sellers
When you hire a real estate agent to sell your home, you trust that they are fully in your corner — negotiating hard, marketing aggressively, and securing the best possible price. But what happens when that same agent is also representing the buyer on the other side of the deal? According to a striking new analysis by Zillow, the answer may be costing American home sellers billions of dollars.
The Zillow study found that home sellers who sold to a buyer represented by the same agent — a practice known as dual agency — lost a combined $1.49 billion over three years. Nearly as troubling, sellers who chose to list their homes off the Multiple Listing Service (MLS) lost an estimated $1.36 billion over the same period. Together, these two practices represent a massive and largely hidden drain on seller wealth — and the data shows it is not a fluke. These patterns have appeared consistently in every single year Zillow has analyzed.
What Is Dual Agency and Why Does It Create a Conflict of Interest?
Dual agency occurs when a single real estate agent — or two agents from the same brokerage — represents both the buyer and the seller in a transaction. On the surface, this might seem convenient or even cost-effective. In reality, it creates a fundamental conflict of interest that can work against the seller's financial best interests.
The economics of the situation tell the story clearly. When an agent represents only the seller, every dollar increase in the sale price translates into a slightly higher commission for them. That incentive, while modest, aligns the agent's interests with the seller's goal of maximizing the final price. But when the same agent also represents the buyer, a very different calculation takes over. Closing the deal quickly — even at a lower price — means the agent collects both sides of the commission without having to split it with a buyer's agent from another firm. The financial reward for keeping both sides of the deal in-house can outweigh the marginal gains from pushing the price higher.
The result, according to Zillow's data, is a measurable and recurring financial penalty for sellers caught in these arrangements.
How Much Are Home Sellers Actually Losing?
The numbers are sobering. On a per-home basis, sellers in dual-agency transactions lost an estimated $2,165 compared to sellers whose buyers were represented by a separate agent. That may not sound catastrophic in isolation, but when multiplied across hundreds of thousands of transactions, the aggregate damage is staggering.
The losses were not evenly distributed across the country. California bore the heaviest burden, with sellers in dual-agency deals losing an estimated $533 million over the study period — a figure that reflects both the high volume of transactions and the elevated home prices in the state. Florida sellers lost approximately $217 million, New York sellers lost $146 million, and New Jersey sellers lost $115 million. In high-cost housing markets, even a small percentage discount on a sale price translates into a large absolute dollar loss.
The Off-MLS Problem: When Private Listings Hurt Sellers
Dual agency is not the only practice identified in the Zillow analysis as harmful to sellers. Listing a home off the MLS — sometimes marketed as an "exclusive" or "pocket" listing — also consistently produced worse outcomes for sellers. Homes listed privately sold for approximately 1.3% less than comparable homes listed publicly on the MLS, adding up to a combined loss of $1.36 billion over three years.
The MLS is the backbone of residential real estate marketing in the United States. When a home is listed publicly, it is exposed to the broadest possible pool of buyers — which creates competition, drives up offers, and ultimately benefits the seller. When a home is kept off the MLS, that competition disappears. Fewer buyers means fewer offers, and fewer offers typically means a lower final sale price.
Proponents of private listings argue they offer privacy, reduce days on market, or cater to sellers who prefer discretion. While these benefits may be genuine in some circumstances, the Zillow data suggests that for the vast majority of sellers, the financial cost of going private is real and significant.
A Consistent Pattern, Not a One-Time Anomaly
Perhaps the most important takeaway from the Zillow analysis is its consistency. The price penalties associated with dual agency and off-MLS listings did not appear in just one year or one market cycle. They have shown up in every year Zillow has examined. This consistency strongly suggests that these are not random fluctuations or statistical noise — they reflect structural features of how these transactions work that systematically disadvantage sellers.
What Can Home Sellers Do to Protect Themselves?
Armed with this data, home sellers have clear, actionable steps they can take to protect their financial interests.
- Insist on separate representation. Before signing a listing agreement, ask your agent directly whether they will also represent potential buyers who come through their brokerage. Make clear that you prefer to work only with buyers who have their own independent agent.
- List publicly on the MLS. Unless you have a compelling personal reason for privacy, insist that your home be listed on the MLS. The broader exposure will typically generate more offers and a higher sale price.
- Understand your state's disclosure laws. Dual agency is legal in most U.S. states, but agents are generally required to disclose it. Ask your agent to explain how they handle dual-agency situations before any offer comes in.
- Interview multiple agents. Before selecting a listing agent, ask about their policy on dual agency. Some agents and brokerages refuse to practice it altogether — which may be a meaningful differentiator when choosing who represents you.
- Know your numbers. In high-cost markets like California, New York, and Florida — where dual-agency losses are highest — the financial stakes of these decisions are especially large. Even a 1% improvement in sale price can mean tens of thousands of dollars.
The Bigger Picture: Transparency in Real Estate Transactions
The Zillow findings arrive at a moment of significant scrutiny for the real estate industry. Recent legal settlements and regulatory debates have put commission structures, agent incentives, and transparency under the microscope. The data on dual agency and off-MLS listings adds an important dimension to this conversation: it is not just about how much agents are paid, but about whether the structure of a transaction aligns agent incentives with seller outcomes.
For most Americans, selling a home is one of the largest financial transactions of their lifetime. A $2,165 average loss per transaction — or a 1.3% discount from listing privately — may seem like a small percentage, but in absolute terms, and especially in expensive housing markets, these numbers matter enormously. The consistent, multi-year nature of the losses identified by Zillow suggests that awareness alone may not be enough. Sellers who actively structure their transactions to avoid dual agency and ensure MLS exposure stand the best chance of walking away with the price their home truly deserves.