What does the term "dual agency" mean?

The term "dual agency" refers specifically to a situation in real estate where a single agent represents both the buyer and the seller in a transaction. This arrangement can lead to potential conflicts of interest, as the agent must balance the interests of both parties while negotiating the sale or purchase of the property.

In a dual agency scenario, the agent must provide a high standard of service and confidentiality to both parties while adhering to their fiduciary duties. It's important for all parties to be fully aware of and consent to this arrangement, as transparency is crucial in maintaining trust and ensuring fair representation.

This definition solidifies the notion that dual agency is not related to managing multiple properties, forming partnerships, or types of property ownership, each of which describes different concepts in real estate practice. Understanding dual agency is vital for real estate professionals as it governs how they operate in certain transactions and highlights the ethical considerations they must navigate.