What constitutes a dual agency in real estate transactions?

Dual agency in real estate occurs when a single agent or brokerage represents both the buyer and seller in a transaction. This situation leads to a conflict of interest because the agent must navigate the differing goals of both parties – the buyer's desire to secure the best price and terms versus the seller's goal to achieve the highest sale price. In dual agency, the agent must maintain neutrality while providing necessary support and disclosures to both clients.

The representation of both a landlord and tenant, while potentially involving similar considerations, is classified differently, focusing on property management rather than the sale or purchase of a property. Managing multiple properties for various owners does not create the same dual representation dilemma; instead, it emphasizes the agent’s role in property management. Negotiating leases for different tenants pertains to leasing activities, which can be done without representing conflicting interests and does not fall under the dual agency umbrella.

Thus, the essence of dual agency revolves around the ethical and legal complexities involved when one agent or firm advocates for both sides in a sale scenario, underlining the importance of transparency and consent from both parties involved.