What does dual agency refer to in real estate transactions?

Dual agency in real estate transactions specifically refers to the scenario where a broker represents both the buyer and the seller in the same transaction. This arrangement can create a conflict of interest, as the broker must navigate the differing interests of both parties, typically requiring them to maintain impartiality. In many jurisdictions, including Illinois, dual agency becomes a critical consideration, as it necessitates full disclosure and often requires informed consent from both parties involved in the transaction.

For dual agency to be valid, agents must ensure that all clients understand the implications, including the potential limitations on the broker's ability to advocate fully for either party. This unique arrangement aims to facilitate a smoother transaction process, but it also requires strict adherence to legal and ethical standards to avoid misrepresentation or favoritism.