The below comes from Douglas R. Miller, Esq. Founder and Executive Director of CAARE, Consumer Advocates in American Real Estate. CAARE (www.caare.org) is a non-profit, 501(c)3 charity dedicated to exposing conflicts of interests in residential real estate and providing information, solutions and resources to consumers and others to help combat these problems.
Agents from the same brokerage firm cannot negotiate on behalf of buyers and sellers in the same transaction. Despite heavily lobbied for laws that have “legalized” this impossible relationship, designated agency is a legal fiction that harms consumers. Just because it is legal, does not mean that it is good or appropriate for consumers. Designated agency serves only the interests of the real estate brokerage firm that desires to collect a double commission at the expense of appropriate client representation. If you agree to designated agency, you will be giving up the right to honest representation and you will be putting the brokerage firm in a position to manipulate your transaction in order to collect a double fee.