Which of these situations creates a dual agency?

In real estate, dual agency arises when a single agent or broker represents both the buyer and the seller in the same transaction. This situation is particularly significant because it can create potential conflicts of interest, as the agent must navigate the differing interests of both parties.

When a licensee is involved in both sides of the transaction, they are required to disclose this dual relationship to both the buyer and the seller, ensuring that both parties are aware of the potential for conflicts. Furthermore, in many jurisdictions, including Washington, dual agency necessitates informed consent from both parties involved.

The other scenarios presented do not constitute dual agency. For example, simply collecting compensation from both the buyer and the seller does not automatically create dual agency unless the agent actively represents both parties. Similarly, acting as an agent for a client and for a firm pertains to the agent’s relationship with their employer and does not involve representing both sides in a transaction. Lastly, representing a single buyer in a multiple-offer situation means they are acting solely on behalf of that buyer, rather than representing another party, which also does not create dual agency. Thus, the situation that accurately depicts dual agency is when a licensee represents both the seller and the buyer in a transaction.