What is meant by dual agency in real estate?

Dual agency in real estate refers to a scenario where a single agent or brokerage represents both the buyer and the seller in a transaction. This means that one agent acts on behalf of both parties, navigating their interests in the process. In such cases, it is crucial for the agent to maintain transparency and impartiality throughout the transaction, as they have a fiduciary obligation to both clients.

The significance of dual agency lies in the potential for conflicts of interest, as the agent must balance the needs and goals of both the buyer and seller. It often requires specific disclosures and consent from both parties to ensure that they are aware of the arrangement and its implications on the negotiation process. Understanding this concept is essential for real estate professionals, as it impacts how agents manage their relationships with clients and how they facilitate the buying and selling process.

Other options highlight representations that are solely for one party or involve separate agents, but these do not encompass the dual representation aspect that defines dual agency. Recognizing dual agency is pivotal for navigating ethical concerns and fostering trust in real estate transactions.