What are the implications of a dual agency in real estate transactions?

In real estate transactions, dual agency occurs when a single agent or brokerage represents both the buyer and the seller in the same transaction. This arrangement has specific implications, particularly concerning the responsibilities and obligations of the agent.

The correct choice emphasizes the requirement that the agent can represent both parties, but this must be fully disclosed to both the buyer and the seller. This disclosure is crucial because both parties need to understand that the agent has a vested interest in the transaction, which may impact their ability to advocate solely for one side or the other.

In a dual agency situation, the agent must navigate the delicate balance of fulfilling their fiduciary duties to both parties while remaining neutral, ensuring that confidential information from one party is not improperly shared with the other. This arrangement can sometimes lead to conflicts of interest, making transparency and clear communication essential throughout the process. By legally disclosing the dual agency relationship, the agent fosters trust and allows both parties to make informed decisions regarding their representation in the transaction.

Aspects such as representation, independence, or refusal to work with either party do not align with how dual agency operates and the legal requirements surrounding it. Therefore, the correct understanding of dual agency is centered around the agent's ability to represent both parties, contingent on