What is dual agency in real estate transactions?

Dual agency in real estate transactions refers to a situation where one agent represents both the buyer and the seller in the same transaction. This arrangement can create a unique dynamic because the agent is tasked with balancing the interests of both parties, which can lead to potential conflicts of interest. The key aspect of dual agency is that a single agent or brokerage handles the representation for both sides of the deal, making it crucial for the agent to maintain transparency and fairness.

In many jurisdictions, dual agency requires informed consent from both the buyer and seller, ensuring that they understand the implications of this unique representation model. The agent must navigate the complexities of fulfilling the fiduciary duties to both clients without favoring one over the other. This is particularly important as it can influence negotiations and the overall outcome of the transaction.

The other scenarios provided do not capture the essence of dual agency. For instance, having two agents represent one party does not constitute dual agency but rather traditional agency relationships. Similarly, involving multiple buyers or representing only a buyer's agent falls outside the definition of dual agency, as these situations do not involve a single agent representing both sides in a transaction. Understanding this concept is crucial for real estate professionals as it shapes the nature of their client relationships and duties.