Dual agency occurs when one agent represents both the buyer and the seller in a real estate transaction. This situation can arise in various scenarios, such as when a buyer expresses interest in a property listed by the same agent who represents the seller. In such cases, the agent has a fiduciary duty to both parties, which can create potential conflicts of interest since the agent must navigate representing the interests of both the buyer and seller simultaneously.
Understanding dual agency is crucial as it comes with specific legal obligations. In many jurisdictions, including Virginia, agents must disclose their dual agency status to both parties and obtain their consent to proceed. This ensures that both the buyer and seller are aware of the potential limitations on the agent's ability to advocate fully for either party, as the agent cannot disclose confidential information from one client to the other without permission.
Recognizing the dynamics of dual agency is vital for real estate professionals to maintain ethical standards and comply with legal obligations, contributing to fair and transparent transactions.