What is dual agency, and what ethical concerns does it raise?

• A. A single licensee represents both buyer and seller in a transaction; requires no disclosures.
• B. Two licensees represent different parties; no conflicts.
• C. A single licensee or brokerage represents both buyer and seller in a transaction; potential conflicts of interest; requires full disclosure; may be prohibited in some states.
• D. Two licensees from different brokerages work on separate properties; standard practice.

Answer: (C)

Dual agency happens when one licensee or brokerage represents both the buyer and the seller in the same transaction. This creates a potential conflict of interest because the agent owes fiduciary duties to both sides, which can make it hard to advocate fully for one client without compromising the other. To manage this, ethical practice requires full disclosure to both parties and written informed consent before proceeding in dual agency. The licensee must remain neutral in negotiations, protect each client’s confidential information, and avoid actions that would unduly favor one side. Because of these conflicts, dual agency is allowed in some states with strict rules or may be prohibited in others.

This description fits a situation where a single licensee or brokerage represents both parties, acknowledges the possible conflicts, requires disclosure, and notes that it may be restricted by law. The other scenarios describe standard representation with separate agents or misunderstand the need for disclosures, and thus don’t capture the dual-agency dynamic.