What constitutes "dual agency" in real estate?

Dual agency occurs when a single real estate agent represents both the buyer and the seller in the same transaction. This situation can create a conflict of interest because the agent must navigate the differing interests and goals of both parties. While dual agency is permissible in many jurisdictions, it often requires full disclosure and informed consent from both the buyer and the seller.

In this scenario, the agent has a fiduciary duty to act in the best interests of both parties, which can complicate decision-making and negotiations. The nuances involved in dual agency make it essential for agents to provide transparent communication and manage expectations effectively.

The other options do not accurately describe dual agency. For example, representing two different buyers or handling a buy-sell relationship separately does not form dual agency, as this involves distinct and separate relationships rather than the shared responsibility of representing opposing parties within a single transaction. Acting merely as a mediator also does not fit the definition of dual agency, as mediation implies a neutral role rather than the dual representation of parties.