What does dual agency refer to in real estate?

Dual agency in real estate refers to a situation where a broker represents both the buyer and the seller in the same transaction. This scenario can arise when a broker is involved in a deal where they facilitate the sale of a property and simultaneously represent both parties involved in the negotiation—essentially acting on behalf of both the seller and the buyer.

This arrangement is significant because it can create potential conflicts of interest, as the broker must navigate the differing priorities and goals of both parties. To ensure transparency and fairness, many states require that all parties involved in a dual agency agreement are fully informed and provide their consent to this arrangement.

In contrast, the other options do not accurately capture the essence of dual agency. For instance, representing two properties for a seller relates more to a standard agency scenario where the focus is solely on the seller, and does not involve both buyer and seller. Purchasing two properties for personal use illustrates individual investment decisions, which is unrelated to the concept of dual agency. The option regarding two brokers working for the listing broker pertains more to collaboration or teamwork within a brokerage and does not define dual agency in the traditional sense.