National Real Estate Practice Exam

What defines a dual agent in real estate?

1. A broker representing only the seller in a transaction

2. A broker representing only the buyer in a transaction

3. A broker who has contracts with multiple clients

4. A broker representing both the buyer and the seller in one transaction

The correct answer is: A broker representing both the buyer and the seller in one transaction

A dual agent in real estate is defined as a broker who represents both the buyer and the seller in a single transaction. This situation typically arises when both parties agree to this type of representation. In a dual agency scenario, the broker must navigate the unique dynamics and potential conflicts of interest inherent in representing both sides. The broker has the responsibility to provide equal service to both parties while maintaining confidentiality regarding each party's negotiating position and overall best interests. Understanding dual agency is crucial for buyers and sellers because it can impact how negotiations are handled and what level of information each party can expect. Dual agency is allowed in many jurisdictions, although it often comes with specific legal requirements meant to ensure transparency and fairness, such as the necessity to disclose the dual agency relationship to both the buyer and the seller. Other options describe roles in real estate that do not involve the concept of dual agency. A broker representing only the seller or only the buyer focuses on one side of the transaction, while a broker with contracts with multiple clients refers to the general business practice of managing various clients rather than the specific context of representing parties in one transaction simultaneously.