Leasing License Practice Exam

What is dual agency in real estate?

1. When agents from different firms represent the same party

2. When the same firm represents both the buyer and seller

3. When multiple agents collaborate on a property

4. When an agent represents the bank and the seller

The correct answer is: When the same firm represents both the buyer and seller

Dual agency in real estate refers to a situation where a single real estate firm represents both the buyer and the seller in a transaction. This arrangement can create potential conflicts of interest because the agent has to balance the interests of both parties. The benefits of dual agency include streamlined communication and the potential for a smoother transaction, as one agent manages all aspects of the deal. It's essential for buyers and sellers to understand this dynamic, as it may affect how their interests are advocated. In many jurisdictions, dual agency requires full disclosure and consent from both parties involved, ensuring that they are aware of the agent's dual role. The other options do not accurately describe dual agency; they refer to different forms of representation or collaboration that do not encompass the specific scenario of a single firm representing both sides in a transaction.