What does dual agency refer to in real estate?

Dual agency refers to a situation in real estate where a single agent or brokerage represents both the buyer and the seller in the same transaction. This means that the agent must navigate the interests of both parties, which can create complexities, particularly regarding confidentiality and the duty of loyalty. In dual agency, the agent must remain neutral and work to facilitate the transaction without favoring one party over another, which is why it is often subject to specific legal requirements and disclosures to ensure that both parties understand the nature of this relationship.

This concept is crucial as it highlights the potential conflicts of interest that can arise when one agent represents both sides in a sale, requiring careful management of communications and negotiations. Understanding dual agency is essential for real estate professionals, as it impacts how they conduct business and protect their clients' best interests.