In real estate, what does "dual agency" mean?

Dual agency refers to a situation in real estate where a single agent represents both the buyer and the seller in a transaction. This arrangement can occur when the agent works for a brokerage that has listings for properties and also has clients looking to purchase those properties. The key aspect of dual agency is that the agent must remain neutral and may have limitations on the extent to which they can advocate for either party, due to the conflict of interest that arises from representing both sides.

Understanding dual agency is important for real estate professionals as it raises questions about consent, disclosure, and the duty to act in the best interest of both clients. In many states, including Kentucky, agents must disclose their dual agency status and may need to obtain written consent from both parties involved. This is critical to ensure transparency and maintain trust in the transaction process.

The other options do not accurately define dual agency. For example, representing only the buyer or seller pertains to single agency, while an agreement between brokers to share commissions does not involve agency representation of both parties in a transaction.