What is 'dual agency' in real estate, and what fiduciary challenges does it create?

• A. A single agent represents both buyer and seller; creates conflicts of interest; requires disclosure and consent, with careful handling.
• B. A single agent represents the seller only; no duties to the buyer.
• C. Two agents from different firms each represent one party, avoiding conflicts.
• D. Dual agency is never permitted by any professional standards.

Answer: (B)

Dual agency means one broker or licensee represents both the buyer and the seller in the same real estate transaction. This creates fiduciary tensions because the agent owes loyalty and confidentiality to both clients, and those duties can conflict—what benefits one party may harm the other. To manage this, disclosure of the conflict and informed, written consent from both parties are required before proceeding. The agent must handle the situation with care, stay neutral in negotiations, and avoid sharing confidential positions that could disadvantage one client. In practice, many jurisdictions allow dual agency but limit it by requiring disclosure and consent, or suggest alternatives like designated agency, where separate agents within the same firm represent each party to preserve loyalty to each client. The statement that a single agent represents only the seller with no duties to the buyer misses the mark, because even in one-sided representation, the agent has duties to their client and interacts with the buyer as a customer. The notion of two agents from different firms representing each side describes split or designated representation rather than true dual agency. And while some places prohibit dual agency, others permit it with safeguards, so saying it’s never permitted isn’t accurate.