What does "dual agency" mean in real estate?

In real estate, "dual agency" refers to a specific situation where one agent represents both the buyer and the seller in a transaction. This arrangement can occur when a real estate agent or broker is involved with both sides of the deal, effectively serving two clients with potentially conflicting interests.

The concept of dual agency is essential to understand, as it raises important considerations about the duties of the agent to both parties. The agent must navigate these competing interests while remaining ethical and legal, ensuring transparency and fairness. It's also important to note that in many states, dual agency requires informed consent from both parties, often requiring agents to disclose their dual role and establish agreements that clarify how they will manage their responsibilities.

In contrast, other options describe different scenarios: representing only one party would be a standard agency relationship, a negotiation process involving multiple agents pertains to collaborations or partnerships between different agents rather than dual agency, and an agency's right to sell property does not directly relate to the concept of an agent representing multiple parties. Understanding dual agency is vital for real estate professionals to maintain ethical standards and protect the interests of their clients.