Dual agency creates an inherent conflict of interest because the agent cannot fully advocate for both parties simultaneously. Most states that allow dual agency require written informed consent from both parties. Some states, like Florida, prohibit dual agency entirely and require transaction brokerage instead.
A listing agent holds an open house and an unrepresented buyer wants to write an offer. If the agent represents both sides, it becomes dual agency. The agent must disclose this and get written consent before proceeding.
Key exam points: (1) dual agency requires WRITTEN consent from BOTH parties, (2) the agent CANNOT share confidential info between parties, (3) some states PROHIBIT it entirely. Know your state's rules.
Related Terms
Related Concepts
A legal relationship in which one person (the agent) is authorized to act on behalf of another person (the principal) in business transactions with third parties.
The highest legal obligation of trust and confidence owed by an agent to their principal, requiring the agent to act solely in the principal's best interest.
An arrangement where a brokerage assigns separate agents within the firm to represent the buyer and seller in the same transaction, allowing each client to have dedicated representation.
A non-agency relationship where the broker facilitates a real estate transaction without representing either party, owing limited duties of honesty, fairness, and competence to both.
An agency relationship created when a principal's actions or words lead a third party to reasonably believe that an agent has authority, and the principal fails to correct this belief.
Frequently Asked Questions
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