What is "dual agency" in real estate?

Dual agency in real estate occurs when a single broker represents both parties in a transaction, meaning that the same agent is acting on behalf of both the buyer and the seller. This situation can arise in different types of transactions and can create unique challenges, particularly concerning confidentiality and the obligation to act in the best interests of both clients.

In a dual agency scenario, the broker must navigate potential conflicts of interest, as their duty to provide full representation to both parties can be complicated when each party's goals may differ. For example, the seller wants to achieve the highest possible price for their property, while the buyer seeks the best deal. Because of this inherent conflict, dual agency often requires full disclosure to both parties and may necessitate obtaining their informed consent.

In contrast, choices that suggest collaboration between brokers or representation solely for one party do not capture the essence of dual agency, which is explicitly defined by the broker representing both buyer and seller in the same transaction. Understanding dual agency is crucial for real estate professionals, as regulations surrounding it often require specific disclosures and can impact the dynamics of a real estate deal.