What is dual agency in real estate?

Dual agency occurs when a broker represents both the buyer and the seller in the same real estate transaction. This arrangement can create a unique set of challenges and responsibilities, as the broker must balance the interests of both parties while remaining neutral. In dual agency, the broker cannot fully advocate for one party over the other due to the inherent conflict of interest; instead, the broker acts as a facilitator to ensure that both sides reach a mutually agreeable outcome.

Because of this unique dynamic, dual agency is subject to specific regulations in many states to ensure that both buyers and sellers are informed about the relationship and provide consent. Clear disclosure is essential, as both parties must understand the implications of the broker's dual representation, including how it may affect negotiations and confidentiality.

The other options mentioned do not accurately reflect the definition of dual agency. They either describe other roles a broker might take, such as representing only one party, focusing only on specific aspects of the transaction, or collaborating with multiple agencies without the dual representation aspect involved.