What is meant by dual agency in real estate?

Dual agency in real estate refers to a situation where a single agent represents both the buyer and the seller in a transaction. This arrangement can occur when the same real estate brokerage firm has both parties within the same transaction, allowing one agent to facilitate the sale. This can streamline communication and can potentially simplify negotiations, as one person is privy to the motivations and needs of both sides.

However, dual agency also introduces complexities, particularly concerning the agent's duty of loyalty. The agent must navigate the interests of both parties without favoring one over the other, which can sometimes lead to conflicts of interest. Therefore, in many jurisdictions, full disclosure and consent from both parties are required to establish a dual agency relationship legally.

The other options represent different scenarios that do not accurately capture the essence of dual agency. A form of partnership between two agencies is a separate business arrangement that does not pertain to representing both parties in a single real estate transaction. Dual representation with multiple agents might imply that more than one agent is involved, which conflicts with the principle of dual agency where one agent is involved. Lastly, representing two buyers does not relate to the dual agency concept, which specifically refers to a scenario that includes both a buyer and a seller.