What does "dual agency" mean in real estate?

The correct definition of "dual agency" in real estate refers to a situation where a real estate agent represents both the buyer and the seller in the same transaction. This arrangement can occur when both parties agree to have the same agent facilitate the transaction, which emphasizes the necessity for transparent communication and an understanding of potential conflicts of interest.

In a dual agency situation, it is critical that the agent maintain fairness to both parties and disclose any relevant information that could affect the transaction. This type of representation is subject to specific legal requirements and ethical guidelines, as it can complicate the dynamics of negotiation due to the need to balance the interests of both the buyer and seller simultaneously.

Understanding dual agency is essential for real estate professionals, as it underscores the importance of consent, disclosure, and the agent’s responsibility to act in the best interests of both clients while adhering to professional standards. In contrast, the other choices involve different scenarios that do not accurately represent dual agency. For instance, collaborating on a single property or working for both parties simultaneously does not encapsulate the precise nature of representing both sides in a transaction. Moreover, changing representation during the process does not relate to dual agency but rather indicates a shift in the agent's commitments or responsibilities.