What does the term "dual agency" mean in real estate?

In real estate, the term "dual agency" specifically refers to the situation where a single agent represents both the buyer and the seller in the same transaction. This arrangement can create a unique dynamic, as the agent must navigate the interests of both parties, striving to maintain fairness and impartiality. It can be beneficial in facilitating negotiations, as the agent has a complete understanding of both parties' positions.

Since the agent represents both sides, they must adhere to certain legal and ethical obligations, including full disclosure and transparency. They cannot take a side in negotiations that favors one party over the other, which can lead to a delicate balancing act. Additionally, in many jurisdictions, informed consent from both parties is required for dual agency to occur, ensuring that they understand the implications of such an arrangement.

Other options do not accurately capture the essence of dual agency. Representation of the buyer only pertains to a single agency relationship. In a situation where different agents represent a buyer and seller, that would typically be classified as a brokerage representation rather than dual agency. Lastly, representing a third-party consultant is completely different from dual agency and does not involve the buyer or seller directly. Thus, the correct understanding of dual agency centers on the simultaneous representation by a single agent in one transaction.