What type of agency relationship is established when the same brokerage firm represents both the seller and the buyer in the same real estate transaction?

The type of agency relationship where the same brokerage firm represents both the seller and the buyer in the same real estate transaction is known as dual agency. In this scenario, the brokerage acts on behalf of both parties, which presents unique challenges and considerations.

Dual agency requires careful management of the interests of both the seller and the buyer, as the agent must navigate potential conflicts that arise from representing two parties with opposing goals. Because the agent cannot fully advocate for one party without compromising the other, full disclosure and informed consent from both parties are critical components of this relationship. This often involves providing each party with the same level of information while maintaining confidentiality regarding sensitive issues.

In contrast, single agency refers to a situation where an agent represents only one party, either the buyer or the seller. Transaction brokerage is a non-agency relationship where the broker facilitates the transaction without advocating for either party. Limited agency can refer to a situation where an agent has limited authority to act, which is not specifically what dual agency entails. Thus, recognizing dual agency is essential for understanding the complexities and obligations it brings to a real estate transaction.