Question:

Is it ethical to act as a dual agent? The fiduciary relationship is discussed, but can an agent do this for both sides of a transaction? Is it ethical to act as a dual agent? why? Could you please explain it?

Source:

DUAL AGENCY

1. Seller
2. Listing Broker
3. Associate Licensee
4. Buyer/Client

A dual agency places the agent in the precarious position of carrying out agency responsibilities to two principals whose interests are in opposition. Any agent who acts solely or through employees of the brokerage on behalf of both parties to a transaction is required by law to inform both parties and obtain their written consent to the dual representation.

The law is particular about the activities of real estate agents. A real estate broker in a dual agency relationship must ensure that both clients know of and consent to the dual representation. Otherwise, the agent faces temporary suspension or even permanent revocation of the real estate license, in addition to having to return any commission received on the transaction. The penalty may seem severe, but the chance or the appearance of taking advantage of an agent's special knowledge makes a dual agency a difficult enterprise. Not only does the broker have a real estate license to consider, but a party acting without knowledge of the dual agency also could ask the court to rescind any contract that results.