How is the relationship of dual agency formed?

The formation of a dual agency relationship occurs when one agent represents both the buyer and the seller in a transaction. This situation is distinct because the same agent is responsible for facilitating the sale for both parties, which requires careful management to navigate the conflicting interests of each client.

In a dual agency scenario, the agent must maintain neutrality and fairness, ensuring that both parties are informed and that their confidential information is protected. This relationship must be disclosed to both the buyer and the seller, as it can create potential ethical dilemmas and conflicts of interest. Therefore, the definition and recognition of dual agency hinge on the understanding that a single agent represents both sides in the transaction, emphasizing the importance of clear communication and consent from all parties involved.