What is the ethical concern with dual agency in real estate transactions?

The ethical concern with dual agency revolves around the potential for conflicting interests between the buyer and the seller. In a dual agency scenario, a single agent represents both parties in the transaction. This can create a situation where the agent may struggle to provide full loyalty and advocacy to both clients because their interests can be inherently opposed. For instance, a buyer may want to negotiate a lower price, while the seller is aiming for the highest possible sale price. The agent, attempting to satisfy both sides, may inadvertently compromise their ability to fully represent each party's best interests, leading to ethical dilemmas.

In contrast, the other choices do not accurately address the core ethical issues associated with dual agency. While reducing transaction costs or enhancing transparency may be perceived benefits in some contexts, they do not mitigate the fundamental issue of conflicting interests. Furthermore, claiming that dual agency guarantees equal representation overlooks the reality that it can often lead to divided loyalties, which is a significant concern in fostering trust and fairness in real estate transactions.