What type of agency relationship occurs when a broker represents both the buyer and seller?

In real estate, dual agency occurs when a broker represents both the buyer and the seller in a transaction. This arrangement can happen when the same brokerage is involved with both parties, allowing the broker to facilitate the transaction while having a fiduciary duty to both clients.

Dual agency is significant because it requires the broker to manage the interests of both parties fairly and impartially, which can be complex given that the buyer and seller often have opposing goals— the buyer wants to pay less, and the seller wants to get as much as possible. In many jurisdictions, dual agency is subject to strict regulations and typically requires informed consent from both parties, ensuring they are aware of the potential conflicts of interest.

The other agency types do not align with representing both parties. Single agency involves a broker representing only one party in a transaction. Transactional agency refers to the broker facilitating the transaction without representing either party. Designated agency allows a broker to appoint different agents within the same brokerage to represent the buyer and seller separately, thus maintaining a clear distinction in representation.