In a real estate transaction, which scenario would dual agency potentially be prohibited by state regulations?

• A. When a single licensee represents both buyer and seller with full disclosure.
• B. When two different licensees from the same brokerage represent buyer and seller with consent.
• C. When the buyer and seller are represented by different brokerages.
• D. When a property is sold through auction.

Answer: (A)

Dual agency involves one licensee representing both the buyer and the seller, which creates a conflict of interest because the licensee owes fiduciary duties to two clients with potentially competing goals. Even with disclosure, many state regulations restrict or prohibit this arrangement because the licensee may not be able to advocate fully for one party or maintain confidential information for each party. This is why scenarios where a single licensee represents both sides can be prohibited in some jurisdictions. In contrast, two licensees from the same brokerage serving as designated agents with consent or separate brokerages representing each party are typically allowed, and auction scenarios don’t inherently involve dual agency.