Dual agency is a term that is used when a real estate agent is representing the two parties involved in a transaction. In some cases, a real estate agent will represent both the buyer and the seller in a real estate transaction. When this happens, the real estate agent has to try to keep in mind what is best for both parties. Dual agency can be unethical and is illegal in certain states. Fiduciary duties are the core problem with dual agency because although the agent has a responsibility to both parties, that can be impossible under certain situations.

Example

Let's say that John is listing a property with a real estate agent named Sue. Sue lists the property and then gets a call from Ralph. Ralph is interested in a house and he does not have a buyers agent. Sue then asks him if she can be his buyers agent and Ralph agrees. While Sue is showing Ralph some property, they come across John's house. Ralph loves the property and wants to make an offer immediately.

If Sue's seller really wants to sell the property at a markdown price, but wants to negotiate a higher offer, the situation can get tricky. Sue has a responsibility to the seller to keep the information private. At the same time, Sue has a responsibility to tell the buyers the truth.

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